Case Study

Cross-Sell Opportunity
Formulation for a reputed
bank
Building a Decision Tree Model to
help identify customers
susceptible to cross change
initiatives
Client: A new bank moving to
target its liability customers for
asset products
Summary

• Our client was trying to find out ways to gain wallet-share of it

Business customers (savings & current a/c holder)
Objective • It was looking for a Decision Tree model to give likely list of leads
so as to focus the marketing campaigns towards them.

• Cequity identified the variables which makes the difference

Solution through rigorous statistical modeling and analysis
• Once the variables were identified , the best possible path to reach
high propensity customers through decision tree modeling

• We built a quantifiable model for client to reach the best leads

through decile treatment
• Based on the behavior pattern, we could predict the right offerings
Results for each segments.
• There was a huge lift in conversion rate for our client using the
Cequity model. Marketing & campaigning spends were also
optimized.
Business Objective

Our client was facing low conversion rate in cross-selling the Assets
products to its Liability customers. Although the Liability and Asset
products have been on the market for quite some years, the
overlaps for its customer into these Venns were very low.
But it would have been imprudent to expend marketing resources
on entire liability customer base with for cross-selling them asset
product. It was desperately looking for a model to focus its
resources better.

We built a Cross-Sell model taking into consideration all factors like

Demographics, Transactions, Psychographics and Response from
previous campaigns.
The result was evolution of a non-linear model for predicting the
chances of buying its asset products within its liability customer
base.
Solution – Finding out micro segments

Uni-Variate Analysis Multi-Variate Analysis

Response Response
Criteria Criteria
Rate Quantum leap Rate
in targeting
Marital
Status = Y1 % the right Marital Status =
X1%
XXX
XXX customers

Ledger Marital Status =

Y2 % XXX & Ledger balance X2%
balance < XXX < XXX

Marital Status =
XXX & Ledger
Number of balance < XXX X3%
Fixed Y3 % &Number of Fixed
deposits < X deposits < X

Marital Status =
XXX & Ledger
Amount balance < XXX &
credited in Number of Fixed X4%
Y4 % deposits < X & Amount
last x months
credited in last x
> xxx months > xxx
Solution – Analysis

Uni-Variate Analysis Multi-Variate Analysis

Response Response
Criteria Criteria
Rate Rate
Marital
StatusEmpower
= with YThe
1%
Power of Multi-Variate Marital Status =
XXX X1%
XXX Analysis

Ledger Marital Status =

Y2 % XXX & Ledger balance X2%
balance < XXX < XXX

Marital Status =
XXX & Ledger
Number of balance < XXX X3%
Fixed Y3 % &Number of Fixed
deposits < X deposits < X
X4 is much
much higher Marital Status =

Amount
than Y4 XXX & Ledger
balance < XXX &
credited in Number of Fixed X4%
Y4 % deposits < X & Amount
last x months
credited in last x
> xxx months > xxx
Solution – Building the Decision Tree
Supe rvised
Criterion # 1 C lassification

Increasing Gain – “Good” customer characteristics

Gain
Gain on 6,00,000
18%
X 1
%
Criterion # 2 < INR x x x INR x x x – xxx INR xxx – INR xxx INR xxx – INR xxx > INR x x x
(montly avg
balance)
Gain
Gain
28%X2
%
Criterion # 3 < x m onths x – y m onths y-z m onths z+ m onths
(MOB) Gain
Gain
X3
35%
%

Criterion # 4 0-a de bits a-b de bits b-c de bits c-d de bits d+ de bits
(# of debits) Gain
Gain
X4
39%
%
Se lf e mployed Em ployed with Em ployed with Sm all scale
Criterion # 5 PSU C orporate business
(occupation) Gain
Gain se tup pe rson
X5
45%
%

Criterion # 6 p-q yrs q-r yrs r-s yrs > s yrs

(age group)
Gain
Gain
49%
X6
%

6
Solution – Building the Decision Tree
Supe rvised
Criterion # 1 C lassification

Increasing Gain – “Good” customer characteristics

Gain
Gain on 6,00,000
18%
X 1
%
Criterion # 2 < INR x x x INR x x x – xxx INR xxx – INR xxx INR xxx – INR xxx > INR x x x
(montly avg
balance)
Gain
Gain
28%X2
%
Criterion # 3 < x m onths x – y m onths y-z m onths z+ m onths
(MOB) Gain
Gain
X3
35%
%

Criterion # 4 0-a de bits a-b de bits b-c de bits c-d de bits d+ de bits
(# of debits) Gain
Gain
X4
39%
%
Se lf e mployed Em ployed with Em ployed with Sm all scale
Criterion # 5 PSU C orporate business
(occupation) Gain
Gain se tup pe rson
X5
45%
%

Criterion # 6 p-q yrs q-r yrs r-s yrs > s yrs

(age group)
Gain
Gain
49%
X6
%
Monthly A vg Bal INR XXX The customers belonging to the adjacent
The Ideal Months on books x-y months segment would be the preferred target for our
Profile # of debits b-c debits cross sell exercise (a given asset product)
Occupation XXX
A ge group q - ryrs
7
Results

Optimized
marketing
Increased efforts and
Response rates spend
and
Identify conversions
customers in
Top Deciles
who have
propensity of
Target right buying an
customer Asset product
with right
product
 Thank you
Customer Equity Solutions Pvt. Ltd.

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www.CequitySolutions.com