Passport Canada: Data Mining Initiative - Presentation to 2010 TTRA Canada Conference, October 15, 2010

Passport Canada:
        Data Mining Initiative

Suzanne Lépinay, Manager, Strategic Research and Analysis

             Presentation to 2010 TTRA Canada Conference,
             October 15, 2010

Passport Canada at a glance:
           Our agency

 Our mission:
  To issue secure Canadian travel documents through authentication of identity and
  entitlement, facilitating travel and contributing to international and domestic security.

 Our agency:

     o A Special Operating Agency of the Department of Foreign Affairs and International
       Trade
     o Over 3000 employees
     o Over 230 points of service across Canada, including 34 regional offices and 197
       Service Canada and Canada Post receiving agents
     o 113 points of service through DFAIT missions abroad

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Passport Canada at a glance:
            A few facts

 Passport possession rate

     o Over 19.9 million valid Canadian passports in circulation
      o Possession rates: Overall: 59.30%; adults: 63.7% and; children: 44.4%)

 Other facts
     o 4.84 million passports issued in 2009-2010
     o Approximately 55,000 passports were reported lost or stolen last year
     o The passport is the only document that universally facilitates international travel
     o Alternatives to the passport that facilitate travel into the US:
         o NEXUS card, Enhanced Drivers Licence (Quebec, Ontario, Manitoba and BC),
           FAST Program
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Passport Volume                        WHTI Phase II
                                                                    Implementation
                                                                     01 June 2009

                                               WHTI Phase I
                                              Implementation
                                              23 January 2007

      9/11 ‐
11 September 2001

                    1 1 person = 1 passport
                    December 2001

                                                                4

The Canadian ePassport

     Passport Canada will begin issuing ePassport
      with a choice of 5 or 10-year validity period to
      all its clients in 2012.
     The Government of Canada has taken the
      policy decision to adopt the ePassport and offer
      ten year validity. Additional changes to Passport
      Canada’s service offering may result from ideas
      put forward through the consultative process.
     Canada’s ePassport will contain no more
      information than is already included on page 2
      of the current passport.
                                                                         ePassport

     As of April 2010, Passport Canada had issued
      26,000 diplomatic and special ePassports.

                                                            International
5                                                         ePassport symbol

Data Mining Is:

 Discovering patterns and relationships derived from data
  at the transaction level.

 Developing models to understand and describe
  characteristics and activities based on these patterns.

 Using this understanding to help evaluate future options,
  gain insights and make decisions.

 Deploy the results of the analysis to guide business
  change.

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Successful Data Mining –
     Iterative and Interactive

                                   Explore Data
        Deploy
        Results                    Identify Metrics

      Collaborate                  Formulate Problem
                       Visualize
        Monitor
      Performance      Manage
                       Optimize

                      Experiment

                    Develop Models

                    Validate Models

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Segmentation Model

    RFM Segmentation was completed using business knowledge.
    Recency - When did the applicant last apply for a passport?
    Frequency – How many times have they applied in the past?
    Monetary – For our analysis we substituted renewal behavior. Do
    some clients consistently lapse?

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Segments & Volume of Applications

                  Person   Person    Application   Application
    Name           Level   Level %     Level        Volume %

Early Birds        7,847    13.49%     18,515        18.90%

Renewers          11,630    19.99%     30,814        31.46%

One Timers        26,148    44.94%     26,148        26.69%

    Lapsers       12,148    20.88%     22,064        22.52%

    Churned        413      0.71%       417          0.43%

     Total        58,186   100.00%     97,958       100.00%
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Segment 1 – The Early Birds (14%)

     Segment Assignment:
         Greater than 2 applications

         Average lapse time = 0

         Still hold valid passport

     Segment Characteristics:
         Mature (age = 46 yrs)

         Established (higher mean income, house value)

         Stable (higher employment rates, less likely to move residences in future)

         70% born in Canada, 76% live in non-rural areas, 52% Female

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Segment 2 – Renewers (20%)

 Segment Assignment:
      Greater than 1 application

      Average lapse time within one year

      Still hold valid passport

 Segment Characteristics:
      Mature (age = 48 yrs)

      Established (high mean income & house value) but less than Early Bird

      Stable (Higher employment rates, less likely to move residences in future)

      66% born in Canada, 70% in non-rural areas, 50% female

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Segment 3 – Lapsers (21%)

 Segment Assignment:
      Greater than 1 applications

      Lapse past renewal period

      May hold expired passport

 Segment Characteristics:
      Mature (age =50 yrs.)

      Less affluent than Early Birds and Renewers

      Highest employment penetration, much less likely to relocate

      70% born in Canada, 46% live in non-rural areas, 52% female

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Segment 4 – One Timers (45%)

     Segment Assignment : “Largest Group” in the sample
         Applications equal 1

         Still hold valid passport

     Segment Characteristics:
         Younger (age = 36 yrs.) than previous segment and applied for their first
          passport 4 years earlier than segment groups

         Less Established with less income and lower house values

         Lower rates of employment, much more likely to relocate, and more likely
          to pay bills online

         81% born in Canada, 70% live in non-rural areas, 53% female

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% Segment Type by Province

              NB         10%         14%                              65%                            11%

             NFDL        10%         15%                              65%                            11%

              PEI        11%          14%                             64%                            10%

               SK         12%          14%                             63%                           10%

              MN          13%          16%                             61%                           11%
Early Bird

Renewers      NV         11%           17%                            59%                        13%

One Timers    NS          12%              18%                         57%                       13%

Lapser       NWT          13%               19%                         56%                      12%

               AB          15%               19%                            54%                      12%

              YK          14%                 21%                           52%                  13%

               QC         14%                 22%                           49%                 15%

               ON          15%                    23%                        48%                 13%

              BC           16%                    24%                        46%                 14%

                    0%         10%     20%          30%   40%   50%     60%        70%   80%   90%         100%

POLICY & COMMUNICATIONS
         CONSIDERATIONS

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Segment 4 - One Timers (45%)

 Priority Considerations:
  Focus data mining efforts on this segment as they will have greatest
     impact on business and we know very little about them.

  Use predictive modeling see how they will behave in the future.

 Secondary Consideration:
  Further analysis to divide this group further.

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Conclusions/Implications

  Improved segmentation can lead to significantly improve marketing
     effectiveness.

  Public opinion research to better understand One Timers.

  Propose initiatives such as notification to One Timers for renewals
     to encourage/influence on-time applications.

  Survival Analysis to understand future behaviour of lapsers and
     understand One Timers.

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Conclusions/Implications (cont’d)

      Compare characteristics of One Timers to assess similarity to Early
        Birds, Renewers vs. Lapsers.

      Targeted communications for important initiatives and new service
        offerings.

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QUESTIONS?

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Suzanne Lépinay
           Slepinay@pptc.gc.ca

     http://www.passportcanada.gc.ca/

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