Even if you are selling more than 10,000 products through your online shop, Next Best Offer will allocate those specific products to each customer that he or she is most likely to buy. The predictions are especially worthwhile when applied to a comprehensive product range, as in this case the hit rate with randomly generated recommendations would be low. Increase your sales while reducing costs with the Predictive Analytics tool Next Best Offer.
Predictive Analytics
Next Best Offer
- Article-based sales planning
- Identification of net requirements
- Optimal scheduling
- Lower stock volumes
- Fulfilment of demand
Boost Your Potential
Predictive Analytics at Triaz
Triaz decides who gets an expensive catalogue on the basis of customer value as determined by Dastani Consulting’s prediction model. Introducing the predictions already proved its worth at an early stage, as Triaz was able to drastically reduce the cost per order. Additionally, a Management Cockpit was introduced together with Dastani Consulting, which enables the scatter loss of new customer acquisition to be minimised.
Predictive Analytics at Triaz
Triaz decides who gets an expensive catalogue on the basis of customer value as determined by Dastani Consulting’s prediction model. Introducing the predictions already proved its worth at an early stage, as Triaz was able to drastically reduce the cost per order. Additionally, a Management Cockpit was introduced together with Dastani Consulting, which enables the scatter loss of new customer acquisition to be minimised.
Cutting catalogue costs through Customer Value Prediction
The Triaz Group distributes around 20 million print items per year to its customers. As a mail-order firm based in the German city of Freiburg, Triaz sells a wide range of sustainable clothing and environmentally friendly items. They have already managed the distribution of these goods over a longer period with forecasts based on big data. Proprietor Ernst Schütze says: “Together with the predictive analysis expert Dr. Parsis Dastani, I started using data to manage the business several years ago, before anyone was even talking about big data. Dastani Consulting’s data scientists have an in-depth understanding of marketing matters. We continually develop new projects together to reduce costs and raise turnover.”
What is the value of an individual customer?
Right at the beginning of their 13-year cooperation, the project partners applied themselves to the mail-order sector’s crucial question: How many catalogues does Triaz really need? According to this mail-order firm, this defines where the money is made, so Triaz developed a scoring system based on order data and each individual customer’s turnover. This involves defining an individually expected value per customer, based on the sum of the probability values of all potential product purchases.
Avoiding scatter loss through a Management Cockpit
Triaz uses a Management Cockpit developed by Dastani Consulting to manage their sales and marketing. This provides insight into where new customers are coming from and how new customer acquisition is progressing overall. For example, if it transpires that an insert in a particular print medium only generates one-time purchases, then it will be discontinued. On the other hand, if an enclosure regarding a particular product group has generated cross-selling potential, then it will also be applied to other print media. These measures help Triaz to avoid scatter loss. “Dastani Consulting’s predictions have led to significant reductions in our marketing costs”, says Ernst Schütz. “We gain important insights about our products and can anticipate better what our customers want.”
Catalogue costs and paper usage drastically reduced
A simple example can illustrate this: A customer is rated with a 25% probability of buying five articles for 80 euros. This implies a customer value of 100 euros (five times one quarter of 80 euros). Conclusion: He or she is “valuable” enough to receive a catalogue. Ernst Schütze: “We were able to drastically reduce the circulation of our catalogues in double-quick time. The savings after only the first application fully compensated the cost of the project.” Triaz continuously predicts customer behaviour in order to keep the cost per order as low as possible. But for Ernst Schütz, sustainability is just as important as cost reduction – the less paper he distributes, the better.
Katalogkosten und Papierverbrauch drastisch gesenkt
Dazu ein vereinfachtes Beispiel: Eine Kundin kauft mit jeweils 25-prozentiger Wahrscheinlichkeit fünf Artikel für 80 Euro. Das ergibt einen erwarteten Kundenwert von 100 Euro (fünfmal ein Viertel von 80 Euro). Fazit: Sie ist „wertvoll“ genug, um einen Katalog zu erhalten. Ernst Schütz: „Wir konnten die Auflage unserer Kataloge von jetzt auf gleich drastisch senken. Die Einsparungen bereits nach der ersten Anwendung haben die Kosten des Projekts voll kompensiert.“ Triaz prognostiziert das Kundenverhalten permanent, um die Cost per Order so gering wie möglich zu halten. Ebenso wichtig wie die Reduktion der Kosten ist für Ernst Schütz das Thema Nachhaltigkeit: Je weniger Papier er versendet, umso besser.
The Triaz Group, located in Freiburg/Germany, unifies the brands Waschbär, Vivanda, minibär, PranaHaus and B&W Naturpflege, and is the largest mail-order company for environmental products across Germany, Switzerland, Austria and the Netherlands. Founded in 1987, the Group’s oldest brand is the Waschbär environmental mail-order business. In 2002, the proprietor Ernst Schütz achieved a turnover of 22 million euros. Today, the Group has a turnover of around 80 million euros and employs 350 people.
