Operations research drives innovation, value at ZS Associates

Business leaders are constantly faced with the challenge of effectively growing their top line. In today’s world, with large and growing data on customers and their choices, companies require a combination of strategic thinking, sophisticated analytics and practical know-how. As online commerce continues to increase, companies need to present information on their product offers in split seconds. The decisions to customize these offers need to be embedded in technology to enable real-time implementation. This makes it essential for companies to develop the right marketing strategy and quickly adapt it over time. That’s what ZS does.

ZS is a global professional services firm that leverages its deep industry experience, sales and marketing expertise, and leading-edge analytics and technology capabilities to create effective solutions that address our clients’ problems. ZS’ commitment to learning and staying abreast of new and emerging trends, investment in innovation and collaborative business approach is what drives the firm’s success from its founding in 1983 to today. 

Where ZS Got Its Start

The founders of ZS, Andris (Andy) Zoltners and Prabhakant (Prabha) Sinha, first met at the University of Massachusetts as Ph.D. students. While there, they worked together on the notorious “multiple knapsack” problem, which attempts to find the most valuable set of items that can be placed in a set of knapsacks. In their attempts to find real-world applications to test, Andy and Prabha realized that their algorithms could be applied to a company’s territory alignment challenges. How should they assign customers to sales representatives so that the underlying sales territories are contiguous and each representative has the maximum workload?

The founders of ZS Associates, Andris Zoltners (left) and Prabhakant Sinha, first met as Ph.D. students.

The duo developed a territory alignment algorithm, which led to better alignments overall, but the proposed alignments didn’t always account for issues like local markets or travel time. Andy and Prabha quickly realized that they needed to partner with sales leaders to adjust the computer-generated alignments. In order to do this, they developed a mapping system (on an early generation Mac) along with a consulting process to solicit feedback from sales executives. In 1983, ZS was born, and the idea of combining analytics, technology and client input to arrive at the right answer was embedded into the firm’s DNA.

Today, ZS has more than 7,000 employees across more than 25 offices worldwide. Although ZS still offers sales and marketing solutions, the company now provides analytics, operations and technology solutions for a full range of problems, including strategy and advisory, AI and analytics, technology and operations, portfolio and pipeline, value and access, and life sciences R&D.

No matter how big ZS grows – and the company continues to grow – its ethos remains the same: Do the right thing, treat people right and get it right. 

Unconventional Structure

For ZS, getting it right involves weaving the principles of operations research and management sciences (OR/MS) into the firm’s problem-solving processes from the outset. While many firms have designated OR/MS departments, ZS’ organizational design is different. Instead of being placed into departments, ZS organizes its people around the firm’s core capabilities. ZS then creates teams on a project-by-project basis, pulling in the employees with the right mix of industry experience, technical expertise and practical knowledge. As the company has grown, it has expanded the roles it can assign to projects to include new roles, such as data scientists, data engineers, and creative and design specialists, to address whatever issue must be solved.

With these teams in place, ZS can help companies meet their challenges head on. For example, ZS helps a broad range of companies, from those with large business-to-business (B2B) operations to those focused on online marketing.

As the buying processes of large organizations become more competitive and more complex, companies that rely on B2B selling must adapt their customer engagement strategies. When B2B clients come to ZS for help with customer engagement, we start by building a deep understanding of their customers’ needs and buying processes. Using analytics, we segment their customers based on the effect that product preferences, pricing and contracting, and customer service needs have on their purchasing behaviors, allowing us to separate those customers who are more focused on price from those who are more focused on service levels. Then we work with companies to define the selling activities and roles that are required to meet the needs of each segment.

In a recent project, we identified more than a dozen roles that needed to work together to support the company’s largest customers, leading the company to rethink the organizational capabilities that they needed to enable these positions. The company also needed to define the rules of engagement that outline how these roles should work together to solve customer issues.

In healthcare, many different stakeholders, including patients, physicians, medical systems and insurers, are involved in making treatment decisions. There are several places where this process can break down. The barriers to treatment, such as when patients are unaware of their conditions or when the insurer won’t cover the treatment (or requires a higher co-pay), vary across stakeholders and regions of the country. We help our clients model the treatment journey at a customer level and recommend interventions based on what we’ve learned about these barriers. We are currently working with our clients to develop innovative analytics that will allow us to predict when patients will encounter these barriers so that our clients can intervene in a timely manner.

Leveraging Analytics for Personalization

ZS also helps clients by leveraging analytics for personalization. Digitally native companies typically personalize their customer interactions using demographics, psychographics and reactions to prior offers. For example, attribute-based purchases have become mainstream among airlines ever since the low-cost carriers unbundled their fares and gave passengers the option to purchase preferred seating, early boarding and baggage check-ins. To understand a customer’s willingness to pay for these options, businesses have typically engaged in market research, but these approaches lead to aggregate results at a specific point in time. ZS leverages machine learning and Bayesian estimation to estimate willingness to pay when customers choose an offering from select alternatives presented to them on a real-time basis. This assessment helps marketers design customized offers based on attribute preferences and paves the way for dynamic marketing that better fits the customer’s needs.

Brands can no longer afford to provide a one-size-fits-all approach when competing against mega-retailers and digital upstarts. They need to personalize at scale and drive one-to-one customer engagement through direct channels to grow in this uncertain economic environment. ZS has developed an AI-based software platform that can turbocharge a brand’s efforts to deliver highly personalized product recommendations. The solution leverages real-time consumer behavior and trends in combination with robust customer-level data from brand retail transactions, loyalty programs, and marketing and digital activity to assess rapidly evolving customer preferences. This demand is then directly translated into estimates of customer-level conversion and profitability. API integrations allow this solution to fit into existing marketing systems and incorporate real-time feedback from customers.

ZS entered the consulting world through a real-world application of an operations research problem. This approach – leveraging ZS’ industry knowledge and OR/MS expertise to create and implement real-world solutions – hasn’t changed. We’re passionately committed to helping our clients and their customers thrive, working side-by-side to leverage analytics and technology to drive customer value and results.