Business Case
Using optimisation to reduce call barring volumes by 25%
Business Challenge
The organisation had an existing tree-based strategy for limit management and call barring, and had carried out champion/challenger testing. The tree was uncomplicated and focussed on credit risk. The business wanted to investigate an alternate approach to strategy development, assessing performance improvements that could be achieved for their objective of managing bad debt and yet still reducing the number of customers barred for exceeding their limit.
The Decision Analytics answer
The client chose Decision Strategy Optimisation from Experian to assist in designing a tree which maximises their objective within constraints. This tree identifies the optimal set of limits to be assigned to customers that minimises bad debt, whilst reducing call bars.
In particular, the tree coped with the varying spend behaviour that exists across both the customer base and risk bands. Spend behaviour can be especially difficult to predict, as identical events often have opposite effects on ‘identical’ customers. The system produces a visible decision tree with recognised decision keys.
The Benefits
- Reduction of 25% in call barring with more accurate limits set for customers
- Corresponding reduction in barring operational cost equivalent to 0.2 Euros per customer.
- Marginal reduction in bad debt despite initial focus on operational objectives
- Reduced bar volume expected to lead to increase in customer satisfaction.
- Increased sophisticated of strategy setting
- Proactively planning for changing economic conditions
- Quick and easy implementation of a tree into operational systems