Customer/Brand Equity Modelling
DMP provided the statistical modelling capabilities behind the TNSConversa (formerly Conversa:Global) Customer Equity modelling software. This software is an interactive tool that allows managers to determine the impacts of different business strategies on overall Customer Equity.
We provided annually updated statistical models for this software package, based on annually revised survey information. The principal end-client was Chevron Corporation (Chevron-Texaco-Caltex), who require models for multiple market segments over 18 countries: South Africa, Pakistan, United Kingdom, Ireland, Hong Kong, Malaysia, New Zealand, Philippines, Singapore, Thailand, Brazil, Colombia, Dominican Republic, Puerto Rico, El Salvador, Panama, Canada and the US.
For Chevron Corp. alone, DMP produce ~180 multi-layer models, each of which comprises of multiple sub-models, giving an annual update schedule of ~1500 models.
The clients can seek answers the following through the software-produced summaries and interaction:
- What are the relative importance of drivers/subdrivers to Customer Equity?
- What are the likely impacts of my strategies on Customer Equity?
- What would be my greatest Return-On-Investment (ROI) in terms of customer Equity?
DMP are provisioned with the survey results of 1000’s of customers across multiple countries, giving a mild file management and quality assurance problem. The data comprise of customer demographic information and the quantification of various customer perceptions about aspects of company operations.
To meet our customer’s requirements, DMP has developed a novel method of quantifying the relative impact of Customer Equity drivers and the effects of altering driver inputs. All the analysis methods were necessarily custom-built from the ground up, using our favoured statistical programming language R. The DMP method of calculation is proprietary, consisting of a combination of Generalized Additive Models (GAMs) and parametric non-linear regressions and subsequent impact calculations.
The basic output to our immediate client is approximately 1500 non-linear equations with roughly 6000 estimated parameters in total. Model diagnostics are generated and examined as a matter of course, as well as remedial measures such as data imputation as required. The turn-around time for this block of work is approximately one month.
Coupled with the TNSConversa Graphical User Interface, the DMP models allow an interactive investigation to help managers balance Relationship, Value, and Brand Equities (as well as their finer scale drivers) in their total contribution to Customer Equity.
For example, experimentation with the software may indicate in a particular market that the discounting of a product will have relatively little impact to a customer’s perception of a company, compared to their experiences in face-to-face meetings. The ROI might therefore be maximised by better staff training, rather than altering pricing.
For this project DMP provide custom methods, software, regular high-volume analysis with quick turn-arounds, and analysis of the quality required for commercial software production.