WOOLWORTHS PARTNERS WITH SAS TO NURTURE LIFETIME CUSTOMER RELATIONSHIPS

Computing

One of SA’s leading quality retailers has upped its investment in business intelligence to further build and nurture lifetime relationships with its customers.

Woolworths is partnering with SAS, leaders in business intelligence, to better understand customer needs, aspirations and behaviours, and gain larger wallet share.

Woolworths Financial Services recently purchased SAS’s data mining solution, Enterprise Miner. Raoul Miller, head of knowledge management, is quick to explain, however, that its major investment is in SAS’s intellectual capital, rather than in the solution as such.

"Four years ago, SAS was predominantly a software and solutions provider to us," he says. "For the past two years, however, we have managed that relationship into a real partnership. SAS brings its intellectual capital and best of breed experience to the table, giving us the competitive advantage needed to achieve our business goals.

"We did not simply buy a software solution," he continues. "We chose a data mining solution from the vendor with the most value-add. SAS offers us access to its intellectual property, best practices, insights, experience and case studies, both local and international. All that is an integral part of the package that came with Enterprise Miner."

Woolworths Financial Services’ major product is the Woolworths in-store card. It also offers personal loans, a Visa card and unit trusts.

It expects a positive return on investment from its new data mining capabilities over the next three years.

"Achieving differentiation in financial services is difficult, as most businesses in the financial services space sell very similar products," say Miller. "In Woolworths, we see the management of customer relationships as one of the primary means of differentiating ourselves and our brand in the marketplace.

"To achieve our overall growth goal, we focus on the customer’s interaction with us, ensuring that this experience is enjoyable, whatever the touchpoint. We use the intelligence garnered from our data to ensure that we talk directly to our customers’ expectations, thus ensuring their buy-in to our brand."

Enterprise Miner was implemented in September, and the intelligence garnered is applied back into more effective management of customer relationships. Because the Woolworths in-store card exists primarily to fund purchases of its retail products, the intelligence produced by Financial Services is of value to the Woolworths retail business as well.

"There is an obvious tight link between the two," says Miller. "The behaviours we see from the use of our cards can also be used to further understand the kinds of merchandise that should be in our stores, what customers are likely to buy, our staff-customer relationships and the entire supply chain," says Miller.

Business intelligence is also used to support direct marketing campaigns.

"Woolworths’ Financial Services business is very mature, and had started to mine its in-store card information some time ago," says Almarie Rabie, business development specialist, SAS Institute SA. "It had a big investment in business intelligence, and was doing daily reporting.

"However, this was not integrated enterprise-wide, the intelligence took a long time to generate and it took as much as three months to build intelligence models. In addition, the intelligence which surfaced was limited. Woolworths Financial Services needed to start generating intelligence to accurately predict things like what new products customers were likely to buy, and to determine how to maximise customers’ lifetime contribution, for example.

"Enterprise Miner has vastly improved productivity, enabling analysts to build models in a much shorter timeframe and generate information speedily. The solution also supplies much richer intelligence for use in marketing campaigns."

The focus can now be on acquiring new customers and the re-activation of, as well as up-selling and cross-selling to, existing customers.

"Most importantly, we have worked together with Woolworths to generate an enterprise-wide intelligence strategy," says Rabie. "At the end of the day, business intelligence is helping Woolworths Financial Services to increase customer numbers and share of wallet, which supports its goal of profitable growth."

Rabie attributes the success of the project to strong executive sponsorship for the business intelligence initiative within Woolworths.