USAA is a diversified financial services group of companies and a leading provider of insurance, investing, and banking solutions to members of the U.S. military and veterans.
During a recent webinar USAA’s Lead Research Consultant, Roger (Jay) Bigler, joined Michael Patterson, Director of Research at Radius in a facilitated discussion about advanced analytics. Jay shared techniques that help the USAA team uncover critical insights to grow their credit card business, enhance product offerings, and create more compelling messaging. They also shared what types of projects benefit most from this approach, and best practices in using advanced analytics.
Critical projects using advanced analytics
Jay estimates that about 50 percent of the research projects he conducts benefit from advanced analytics. These sophisticated techniques provide a deeper look into the relationship between variables, particularly when working with surveys. Jay leverages advanced analytics for projects like the following:
- Driver analysis
USAA is often trying to understand the factors individuals find most important when selecting a credit card. They’re looking for customers to rate the importance of factors such as credit card brand, annual percentage rate, or rewards programs. Since all those factors are important to customers, Jay’s team uses driver analysis, to measure how much impact the various factors have on individuals’ willingness to adopt a particular credit card. This kind of approach allows for better differentiation and more specific results.
- Segmentation studies
Segmentation studies allow the team to use clustering techniques to group together individuals with similar needs, attributes, or attitudes.
- Choice models
Choice models highlight the importance of features like brand and price when individuals are evaluating products or services. These models reveal more about the decision process to inform product design or service offerings to maximize adoption or revenue.
- Maximum difference scaling (MaxDiff)
When trying to understand the relative or the absolute importance of various features, MaxDiff differentiation helps to determine the impact features have on individual consumers who are, for example, in the consideration stage.
Overall, these advanced analytics techniques enable researchers to explore data to a much greater extent to drive insights that can’t be discovered using simpler descriptive statistics.
Benefits of advanced analytics
With advanced analytics, Jay’s team can look through a dataset for relationships or patterns in a range of variables. This is an ideal tool to use when you need to solve for something that is not readily available from the survey data.
Another primary advantage of the approach is enhanced hypothesis testing. For example, when looking at segmentation, one hypothesis might be that there are specific groups of consumers in a market that might be interesting to USAA. Advanced analytics combined with clustering techniques can determine which groups exist in that market and how they differ from one another, helping to confirm a hypothesis that the groups exist, and if they do, understand more about what the groups look like.
Creating these groups, or segments, helps USAA develop a deeper understanding of what will resonate and appeal to specific segments so the business can develop specific messaging about products and services. Jay notes that segments should be appropriately sized for the overall market and differentiated enough, from a marketing standpoint, so that the custom messages targeted to those segments will be received well.
While these studies require more commitment from the research team, the value to the stakeholders is a deeper and more holistic picture of consumers and customer segments, as well as rich information on product and service offerings.”
Considerations for using advanced analytics
Advanced analytics can deliver great payoff but requires a commitment of time and resources. To ensure the most benefit for your project using advanced analytics, Jay stresses the need to be knowledgeable, be careful, and ask a lot of questions.
- Be realistic about time and budget. Advanced analytic techniques require larger sample sizes, which can require a higher budget level. Because of the complexity of the analysis, the project’s more extensive timeline needs to be communicated to stakeholders.
- Understand the software. Jay notes that software allows anyone to run different types of advanced analytics, but without the right expertise, an estimated model might deliver inaccurate results that point in the wrong direction.
The complexity of advanced analytics projects requires the right insights partner is chosen. Jay advises:
- Vet potential research partners carefully. Jay cautions against partnering with a research firm or a supplier that isn’t transparent about its techniques.
- Get specific before launching a project. Ask your partner organization to explain how the algorithm works as well as the pros and cons of its strengths and weaknesses.
- Pick the research team. Your research partner should also pair you with the most capable team for your project. Ask about the statisticians and data scientists who are conducting the analysis for your project.
- Know the techniques behind the story. When the project is finished, be sure you can take the insights delivered from a technique and transform them into a story for your stakeholders. Be prepared for compelling questions stakeholders might have about research methodologies so you can provide informed answers.
Rich insights for a clear path forward
With advanced analytics, the USAA team can develop a deeper understanding of survey data and deliver those insights to stakeholders throughout the organization. While these studies require more commitment from the research team, the value to the stakeholders is a deeper and more holistic picture of consumers and customer segments, as well as rich information on product and service offerings. With these rich insights, stakeholders can focus on growth activation and build a stronger path forward for USAA.
To learn more about the specific techniques Jay uses in his research, watch the webinar now:
To learn more about pulling insights from survey data, watch our recent webinar with Expedia:
If we can assist with developing your advanced analytics approach, reach out.
