By: Eric Siegel, Founder, Predictive Analytics World
In anticipation of his upcoming conference presentation, Pricing and Segmentation Utilizing Menu-based Conjoint at Predictive Analytics World Boston, Sept 27-Oct 1, 2015, we asked Lawrence Cowan, Partner at 
Cicero Group, a few questions about his work in predictive analytics.
Q: In your work with predictive analytics, what behavior do your models predict?
A: The majority of my analytics experience has dealt with predictive consumer behavior across all stages of the customer lifecycle. So this would span from acquisition through the development of “typing” tools for targeting and segmentation, to response and uplift modeling for existing customers, to attrition modeling and customized intervention strategies.
Q: How does predictive analytics deliver value at your organization? What is one specific way in which it actively drives decisions?
A: Predictive analytics defines our organization. With it, we would not have an offering. As a full service data-driven strategy consulting firm, it is our job to provide the technical and analytical expertise to help our clients leverage data to make smarter decisions. And in all engagements involving predictive analytics, our ultimate objectives are results and implementation – if our clients cannot actively use the models and insights to make decisions, we have failed.
Q: Can you describe a successful result, such as the predictive lift of your model or the ROI of an analytics initiative?
A: Engagements involving attrition are some of my favorite. With the right model, it’s amazing how you can identify the characteristics, behaviors, or events that preclude attrition. During a recent engagement we were able to leverage a sophisticated attrition model (proportional hazards model) to identify critical events, and then designed customized interventions based on the defining characteristics. After a 6 month period of implementing the interventions, attrition had been reduced by 300 bps, which effectively improved valuation of the company by $300MM.
Q: What surprising discovery have you unearthed in your data?
A: I’m always surprised at the opportunities unearthed with predictive analytics – things that you would never expect if it were not for efforts in data mining. For example, for a large grocery retailer, we were able to identify two critical customer behavior trends (made possible through loyalty data) that were significant predictors of customer profitability. These two trends were counter to heuristic judgment at the executive level (executives have since changed their perception of the event after seeing the compelling evidence).
Q: Sneak preview: Please tell us a take-away that you will provide during your talk at Predictive Analytics World.
A: One pricing and product bundling strategy doesn’t work for all audiences. As you think about pricing and bundling changes, be sure to consider the implications of various consumer segments – their preferences and sensitivity to pricing are unique!
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Don't miss Lawrence’s conference presentation, Pricing and Segmentation Utilizing Menu-based Conjoint on Monday, September 28, 2015 from 11:20am to 12:05pm at Predictive Analytics World Boston. Click here to register to attend.
By: Eric Siegel, Founder, Predictive Analytics World