ANLY FPX 5510 Assessment 4

Introduction

The marketing department of a large finance company recently experienced a decrease in budget. Due to this, the department approached the analytics department to maximize the budget and reduce wastage of resources in calling customers multiple times, particularly those who might not be interested in the company’s service.

ANLY FPX 5510 Assessment 4:Cluster Analysis

The initial solution was established through cluster analysis, which employed information on whether customers were addressed through various communication channels, such as telephone, email, Facebook, Twitter, Instagram, Pinterest, Yahoo, Google search, and U.S. Postal Service mail. The purpose of this analysis was to devise clusters of customers exhibiting comparable behavior and inclinations, thus enabling the organization to streamline its marketing efforts. The decision was made that the company should keep marketing via telephone, mail, and Google but stop using any other method.

Decision Tree Analysis

The second solution was to conduct a decision tree analysis. Like cluster analysis, the technique compares data regarding customer interaction via telephone, email, Facebook, Twitter, Instagram, Pinterest, Yahoo, Google search, and U.S. Postal Service mail. Apart from that, it also merged demographic data alongside overall deposits during the past one-year time period per customer. Its primary goal was finding the behavior of high-deposit clients so that it could tailor direct marketing to fit those characteristics. The analysis revealed that the company should continue selling via Instagram to customers under the age of 43, while avoiding outreach to customers aged 56-80 due to their low deposit levels in the past year.

Recommended Solution

The recommended solution to solve the business problem is the first option, cluster analysis. This technique focuses on the effectiveness of communication channels rather than customer demographics. It evaluates multiple advertising mediums such as telephone, email, Facebook, Twitter, Instagram, Pinterest, Yahoo, Google search, and U.S. Postal Service mail to determine the most effective channels and exclude the inefficient ones in order to save the company’s financial resources. In contrast to the decision tree analysis, which determines the elimination of specific age groups from marketing strategies based on customer attributes, cluster sampling employs numerous advantages, including that it is cheaper than other methods and enables the population of massive sample sizes in the desired locations, then allowing the organization to acquire pertinent information (Money, 2019).

Implementation

Use of analytics within an organization is a continuous process and not a one-time event. As the firm develops to suit customer, product, and operational needs, insights acquired through analytics will be increasingly essential. Use of cluster analysis will adopt a centralized model, with all applicable assets—software, hardware, subject matter experts, metadata, and project management resources—handled by a single department. This centralized methodology provides a number of advantages, including enhanced knowledge sharing, consistency of implementation, and cost savings resulting from common hardware and software (Sheikh, 2013). Initially, the data and processes associated with cluster analysis will be discussed, and then the training of the team will be executed. Subsequently, participation, project management, and development architectures will be instituted prior to commencing actual projects to generate value. Regular checkup of the cluster analysis will ensure its effective implementation.

Benefits

The proposed solution is trying to minimize communication by identifying the most favorite delivery modes of the customers. The key elements of the target group, product or service, and costs relevant thereto are primary in determining the most effective advertisement media channels. One of the fundamental principles of advertising is not to waste; hence, selecting media that covers the largest number of potential customers is essential. Advertising expenditure that attracts a large audience might not be effective if most of the targeted people are unlikely to purchase the product (The Inc., 2018). Cutting down on unnecessary advertisement saves the company money by focusing on communication channels that reach interested customers. Bad advertising choices will exhaust the budget and waste precious resources, highlighting the importance of making informed decisions in an effort to remain within the limits of a limited budget.