managing risk how analytics and risk information can infor

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Experian Scottish Public Sector ConferenceDr. Ged Mirfin, Chief Data Officer – Business Link Northwest

© Experian Limited 2009. All rights reserved. 2

Introduction: Key objectives of presentation

Understanding Performance Gaps & Political Market Failure in Public Sector Data (Non) Use & Abuse

Understanding Performance Gaps & Political Market Failure in Public Sector Data (Non) Use & Abuse

The use and application of data to inform and drive effective evidence based policy

The use and application of data to inform and drive effective evidence based policy

How to improve the delivery of Business Support & mitigate Commercial Risk through contextually

relevant data-driven marketing

How to improve the delivery of Business Support & mitigate Commercial Risk through contextually

relevant data-driven marketing


Aim: Move away from Anecdotal &

Judgmental to Evidence-based

Policy formulation

Aim: Move away from Anecdotal &

Judgmental to Evidence-based

Policy formulation

Pol

icy

Mak

ing

Exp

erie

nce

Policy Making Evidence

Experience + Evidence = Intelligence

Opinion-based

Evidence-influenced

Experience-influenced

Intelligencebased


Context: Delivering support to businesses in the recessionary and post recessionary economic climate

Problem 1: Identifying Struggling Businesses

Problem 2: Finding them early enough. There are No Second Chances in a Recession!

Problem 3: Economic Impact on Key Business Segments. How badly have they been and what is the likelihood of Commercial Failure? Can Business Support can make a difference?

Problem 4: Policy Makers don’t have context to Make or Measure the Impact of Policy


The Public Sector’s Historical Problem: Push marketing

The Business Link brand has historically had poor customer intelligence

The absence of sufficient quality data meant:

No holistic overview

Marketing efforts were supply-push

Generic marketing campaigns

Nationally driven campaigns lacked Impact and affected brand awareness

Operational efficiency suffered


Truism number 1Good decisions are impossible to make without intelligent data


Business Link North West Strategy statement 2008/09 (Data Related)

“To be recognised as the leader on regional business intelligence”

“To play a vital role in informing business support policy making”

Business Link’s Data Strategy“BLNW’s Key Strategic Objectives”


Business Link had 100k company records in its database.

The companies had been assisted by Business Link over the last 20 months

The data captured was used to satisfy contract outputs and as such was very specific

We needed to increase the data set both in terms of size and data richness

Experian profiled Business Link data and found 536k businesses (both Ltd. And unincorporated) at location level in its National Business Database for the North West.

Business Link acquired the data from Experian. Each Experian record had in excess of 150 data characteristics (appends)

The extra data records allowed a significant level of analytics to be done. The data had access to classification systems (Yell and Thompson Directories) and allowed detailed segmentation

One of the Primary data attributes was “Risk Scores and Financial Performance data”

History of the BPI

Business Link Universe of

Company Data

100k

Experian National Business Database Entries for

North West

536k


Business Link Universe of

Company Data

100k

Experian National Business Database Entries for

North West

536k

We incorporated Business Link universe and Experian’s National Business Database into the BPI


15k

Consolidates North West Business

Universe

436k

85k

Section of database unique to Business Link – Lifestyle and

Grey economy businesses

Section of database unique to Business Link – Lifestyle and

Grey economy businesses

We incorporated Business Link universe and Experian’s National Business Database into the BPI


Is “real time” data and is updated monthly

Key Data Attributes of BLNW’s Business Performance Index

Is the first (B2B) business profiling system in the public sector

Offers real time intelligence to support our efforts to address the current market conditions

Data is very granular and can be segmented to very specific levels

Key data segmentation is geographic (down to postcode) and sectoral (RES, SIC group, Yell classification code, Thompson directory classification code)


Relevant Sector &

Geography

Business Financials

Size of Business

Age of Business

Company Status

Risk

Commercial Classification

Shared Partner Data

Business Support Criteria

Business Support Criteria powered by Experian’s National Business Database


Risk Category Description

Failed/serious adverse info Administrator or receiver appointed, bankrupt proprietor, dissolved business

Maximum risk High value of unsatisfied CCJs, accounts overdue, start-up business with adverse data, proprietor with adverse data or maiden accounts show loss

High risk Large company with weak balance sheet, medium sized firm with very weak balance sheet, combination of above average risk features, start-up with adverse trading

Above average Large company with very weak balance sheet, medium to small firms with (high levels of credit search, payment difficulty, weak balance sheets), start-up firm without adverse information

Below average Large business with weaker balance sheet/modest loss, SMEs with steady trading, small firms with directors with good record, no adverse data

Low risk Well established, accounts filed, mid to large firms with £1m of assets and £5m of turnover, good record, directors with strong records

Minimum risk Large well established firms, strong balance sheets, low value of public information

Commercial Delphi risk


Business Performance Index

(BPI)

Business Link Northwest’s BPI (Business Performance Index) Data Warehouse

CHAMBERS OF COMMERCE

SUB-REGIONAL PARTNERS

LOCAL AUTHORITIES

CLUSTERS & TRADE

ASSOCIATIONS NWDA

BUSINESS LINK NW

TUC / UNIONS

GOVERNMENT OFFICE NW

JOB CENTRE PLUS

HR1 to BERR

BUSINESS LINK DATA WAREHOUSE

RECORD BY COMPANYCompany Name

Registered NumberCompany Address

Local Authority & WardSector

Turnover & GVA EstimateNo. of Perm employees

No. of Jobs at Risk

>20 Redundancies within 90 days

Figure 1 Data Capture

ESTABLISH RAPID RESPONSE TEAM

DEVELOP STRATEGY/POLICY FOR SUPPORTING COMPANIES IN CRISIS

COMMUNICATE STRATEGY/POLICY TO PARTNERS (JCP, LSC, BLNW, TRADE

ASSOCIATIONS) & INTERNAL PARTNERS


Very Low Risk Low Risk Below Average Risk

Above Average Risk High Risk Maximum

RiskDissolved/

Serious Adverse Info

North West 7.76% 11.62% 23.37% 22.88% 11.31% 20.16% 2.91%

Merseyside7.50% 9.50% 20.03% 24.32% 12.11% 24.01% 2.53%

Warrington & Cheshire 7.17% 10.62% 23.82% 20.80% 15.32% 20.79% 1.48%

Cumbria 11.67% 16.65% 29.24% 24.19% 6.80% 10.28% 1.18%

Lancashire 8.45% 14.20% 27.70% 24.77% 8.31% 14.24% 2.34%

Manchester 7.07% 10.74% 21.31% 21.94% 11.57% 23.06% 4.31%

What does the North West region look like?

This information is based on data provided by Experian. The data has been subject to further analysis by Business Link North West.


How do you Identify a…

Liverpool (13,704)

Employs 50 or more (207)

Central Ward (66)

In Retail Sector (4)

Deteriorating Payment Profile (1)

…company that is at least of Above Average Risk

which is based in Liverpool

which Employs 50 or more Employees at Site

specifically in the Central Ward

which is in the Retail Sector

whose payment profile is deteriorating.

The Power of the BPI: Project Rapier – Liverpool Vision’s objective of spending £10M to save 40 businesses in the retail sector by end Q1 2009

£729.71£729.71

£48,309£48,309

£151,515£151,515

£2.5M£2.5M

£10M£10M



Zavvi payment profile was 20 days better than industry sector average from Jan 2008 – June 2008

In July Zavvi payment profile was in line with sector average (20 days beyond terms)

By September the profile was 60 days beyond terms, October was 80 days. Zavvi went into receivership in December

What is the true cost of poor data - £10m?

And that business was?


Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk

Dissolved / Serious Adverse

Information

7.76% 11.62% 23.37% 22.88% 11.31% 20.16% 2.91%

Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum RiskDissolved / Serious

Adverse Information

7.50% 9.50% 20.03% 24.32% 12.11% 24.01% 2.53%

North West

Merseyside

Sefton


Adverse Information

11.4% 11.0% 18.6% 8.9% 13.7% 27.0% 1.0%

What does a Local Authority Look like when compared to the North West Region?

This information is based on data provided by Experian and has been subject to further analysis by Business Link North West.


Sefton

Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk Dissolved / Serious Adverse Information

7.16% 9.99% 21.03% 23.12% 9.43% 27.52% 1.75%

What does the risk profile look like for Sefton?



Sefton


7.16% 9.99% 21.03% 23.12% 9.43% 27.52% 1.75%


Risk Micro Band Number of Companies Percentage

1 1,147 40.6%

2 329 11.6%

3 399 14.1%

4 576 20.4%

5 375 13.3%

Sefton – Maximum Risk Businesses



Sefton


7.16% 9.99% 21.03% 23.12% 9.43% 27.52% 1.75%



1 1,147 40.6%

2 329 11.6%

3 399 14.1%

4 576 20.4%

5 375 13.3%


Drill into the highest of the high riskBusinesses in Sefton



Sefton


Adverse Information

7.16% 9.99% 21.03% 23.12% 9.43% 27.52% 1.75%



1 1,147 40.6%

2 329 11.6%

3 399 14.1%

4 576 20.4%

5 375 13.3%




Where are these Entities located?

The top 25 businesses by headcount from the highest Micro-Band of Sefton’s maximum risk band

by geographical location



Business Link approach - The Rapid Response Framework 1

How Can We Help?

Co

mp

lex

ity

of Q

ue

ry

Business Link Involvement

The Rapid Response FrameworkComplex Data Analytics

to provide Partners with

very detailed information

Simple phone Hotline to

service requests for Data

from Business Support

Agencies

Web Enabled multi partner

access to BLNW Database

through Extranet facility


Stratified response to the current economic climate – 2 Activity Levels


For light touch intervention activity targeted marketing campaigns sensitive to the issues a company with a worsening risk profiles score. – specialist telephone advice, email contact or web-based toolkits

For companies / groups facing significant problems more direct intervention activity through Target Adviser Teams or through Partner Organisation

Each activity making best use of Business Support products



-Business Performance Index - Partner Engagement Who have we worked with?

-Wave 1

-Wave 2-Wave 3


“Understanding your customers improves customer engagement”

Your customers understand

you

You

understand

your customers

Don’t think about ‘what can you do for your customers’,

but ‘what can your customers do for you’

EmailFace 2

face

Call centre

Internet

Overall service quality

Image

Value for

money

Overall company

ratingLoyalty


Contextual relevance

Relevance and engagement are

delivered via intelligent marketing

content to suit what we know

about end users


Contextual relevance

Contextually Relevant Marketing is highly Localised and Personal

This style of marketing is not possible without Exceptional Levels of Customer Insight.

Ultimately this is about understanding your audience & then delivering Messages that are Current and Relevant


Direct Marketing

Need: To Achieve High Levels of Awareness and Developed

Understanding

Solution: Maximising the Take-Up of Product & Increasing Service

Consumption through Optimising Lead Generation and Improved

Customer Targeting


Crunch time for Bolton Businesses

Jointly branded campaign with Business Bolton

Key Messaging delivered to businesses within the Bolton area, about the kind of help and support available to them during the economic downturn.

Campaign delivered via a combination of Direct Mail and eComms Channels


Crunch time for Bolton Businesses


Brand Building & Enhancement

Need: To Associate BLNW Brand Locally Accessible Service Offering which is Focussed on Local Need

Solution: Evolving a Strong Local Brand Identity focussed on

Issues and Themes specific to North West Businesses

Brand Aware

Supplier

Brand Aware

Supplier


The BLNW Brand: Guiding you on your journey

Email Marketing Campaign designed to drive Traffic to New BLNW Web-Site and Knowledge Portals

Tailored Advice on Cash-flow Management and Late Payment.

Campaign delivered via Highly Targeted Email Broadcast and Inserts in Subscription-Based Electronic News Letter.


Beat the credit crunch – manage cash-flow


Manage cash-flow – understand the essentials


Prevent late payments


Events Marketing

Need: To Differentiate Product Offering from Other Players in

the Marketplace

Solution: Expert Coaching through Educational Seminars at Co-Branded Events. Delivered by Acknowledged Specialists from

Market Leading Blue Chips Associating Service Offering with

Other High Visibility Premium Brands


Survive and thrive

Objective to engage with SME community demonstrating that BLNW is in a good position to support business through the ‘credit crunch ”.

Series of 11 events in Sub Regions to inspire and motivate Businesses to take action and encourage them to position themselves to survive & improve!

Held in partnership with Key Regional Business Support Stakeholder Organisations.

Aim to strongly affirm Key Differentiator of BLNW Quality Service Offering by associating BLNW Brand with recognised and respected Business Support Agencies.


PR & Communications

Need: to Enhance BLNW Market Reputation

Solution: Thought Leadership Campaigns Delivered through PR

& Communication


United we stand

Objective to Underpin BLNW’s positioning as leader in Business Intelligence across the region

Demonstrate the expertise of BLNW

Provide unique insights into the economic health of the region

BLNW and Lancashire Telegraph campaign offers editorial, events, workshops and podcasts/webchats


Graphic provided Courtesy of Lancashire Telegraph – part of the Newsquest Media Group


Lancashire Telegraph launches campaign to support businesses

“TODAY the Lancashire Telegraph launches a major campaign to help businesses fight back against the recession” – BRAND ASSOCIATION

“New figures reveal that almost 4,000 East Lancashire businesses are staring into the financial abyss at a time of unprecedented economic hardship”. – TRUSTING OUR MESSAGE

“The campaign comes as figures from Business Link Northwest show that 14per cent of East Lancashire companies – 3,977 – are at maximum risk of failure”. – POSITIONING OURSELVES AS THE AUTHORITY ON THE SUBJECT

With more than 28,000 firms across East Lancashire, The Lancashire Telegraph and Business Link Northwest are looking to give them the help they need to ride out the recession. – THE HOOK

“Business Link research shows that…….” BRAND ASSOCIATION AND AWARENESS Blackburn with Darwen has the highest number of businesses at maximum risk – 15 per cent (1,198) of its 7,950 businesses. - GRANULAR DATA CONTEXT AND ENGAGEMENT

“The figures have been compiled by global credit management company Experian and have been built into an innovative Business Performance Index developed by the Business Link data analysis team” – BRAND ASSOCIATION.


Feedback – brand awareness?

“It’s a great idea. We all have a responsibility to the community at a time of recession and

newspapers have a great responsibility, which you are showing, to try and help businesses get all the help they need.”

David Cameron, Tory Leader



“Small and medium size businesses are important because of the number of people they

employ. The Lancashire Telegraph’s campaign is immensely important too because unless people work together at a local and national level to do the best for East Lancashire businesses, we will

not get through this recession.”

Nick Clegg, Liberal Democrat Leader



“The Lancashire Telegraph campaign is vitally important. It remains a truth that too many business people freeze when faced with difficulties and getting them to ask for

help early is a must.”

Jack Straw, Blackburn MP


Viral Marketing, Advocacy & Reference Management

Need: Build Customer Advocacy

Solution: Building Stakeholder Advocacy Networks through Viral

Marketing


Selling the vision

Searching for Evangelists Delighting Stakeholders and

Customers with Insight Become the Primary Source of

Business Intelligence in the Region One Version of the Truth and One

Author of Widely Circulated Data Assets

Use of Self Replicating Viral Marketing via Effective Working Groups and Representation at Critical Policy Forums

Nudge the Change Architects (Thaler & Sunnstein) and Be Confident in the expansive capabilities of B2B Mood Contagion


Conclusion: Benefits of using the BPI

This monitoring allowed us to review the effectiveness of our activities and can be analysed regionally as well as by RES

This monitoring allowed us to review the effectiveness of our activities and can be analysed regionally as well as by RES

Each product had a different flag which will allow us to record the respective effectiveness of the different products available Each product had a different flag which will allow us to record

the respective effectiveness of the different products available

System allowed us to compare the performance of companies, that have had our support, with the rest of the economy on a like-for-like basis

System allowed us to compare the performance of companies, that have had our support, with the rest of the economy on a like-for-like basis

It enabled us to develop our products using and evidence based development framework

It enabled us to develop our products using and evidence based development framework

The BPI system allowed us to “Flag” the companies we assist and monitor their “improvement” over time

The BPI system allowed us to “Flag” the companies we assist and monitor their “improvement” over time


Questions?

managing risk how analytics and risk information can infor

Documents

evidence experian limited

application of data

data relatedto

public sector data

policy effective evidence

delivery of business

experience evidence

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