Segmentation, predictive modeling and testing are great for improving the effectiveness of individual customer interactions, but when used alone, they can’t help you deal with the full scope of realities that marketers face every day. Issues such as competing business goals across divisions, managing multiple marketing programs against constraints such as channel capacity, controlling budgets, and managing customer contact policies must be addressed. Internal political and turf battles can make the decision process difficult.
For example, deciding which campaigns are sent to which customers can be a very volatile issue within a multi-product organization. To maximize profit or ROI, enforce contact policies, and stay within budget when your company has multiple products offered in hundreds of campaigns to millions of customers, you need far more than just experience and human intuition. You need a technology-based solution – optimization.
Optimization technologies apply mathematical techniques that enable you to maximize economic outcomes by making the most of each individual customer communication while considering business variables such as your company’s resource and budget constraints, contact policies, the likelihood that customers will respond and more. For example, using what-if analysis delivered through marketing optimization software, you can increase the ROI of campaigns by analytically determining the best offers for individual customers and including analytical insight in the implications of business constraints. You can also target customers to maximize profitability, response rates, asset levels or any other parameter you choose – all while taking into account customer preferences, propensities, profitability, costs, contact policies and other business goals and objectives relevant to campaigns and communications.
Optimization solutions can also enhance your contact strategy so that you don’t oversaturate customers or violate corporate governance requirements. For example, you can eliminate uncoordinated and conflicting communications. Also, relevant relationship factors such as customer risk, advertising exposure and householding are incorporated into the optimization to ensure that valuable customers are receiving the best possible set of communications across every channel. And finally, with optimization solutions, you can increase organizational efficiency. For example, you can use what-if analysis to quantify where changes in staffing and budget will really pay off, where you’re leaving money on the table or where you have unused capacity.
Learn more about optimization in this white paper: A Marketer’s Guide to Analytics