1. Data is the foundation – so invest in it
“The precursor to optimization is having clean, trusted marketing data,” says Bhattacharjya. “You can’t have marketing optimization without it.”
For many marketers, data is inherently problematic. It may be scattered all over their organization – or worse, they don’t even know about the data that’s available to them. Specific to optimization, marketers need to collect and centralize data that helps them understand:
- Their campaigns.
- Individual customers and customer segments, such as demographic information, risk information, profitability data and prior response data.
- The prioritization rules, business rules, or customer rules that your organization may be applying right now (to the extent they can be documented and codified).
- Predictive models, as determined by the types of optimization sought (for example, if you’re trying to maximize the responses, you would need response models in place, not your profitability model).
2. Define what you want to optimize given specific constraints
Before you start the process, you need to define exactly what you want to optimize. “For example, if you want to optimize ROI, you need to clearly define and quantify what you mean by ROI, including the rules and constraints that you want to satisfy,” adds Bhattacharjya. These constraints are inputs that go into the optimization process.
3. Deploy the right enabling technology
It’s one thing to have the technology – or the analytic capability – in place, and it’s another to know how to get the most from it. “I recommend that companies seek out expert guidance from someone who has successfully applied this technology and optimization process before,” says Bhattacharjya. “It’s important that you have folks available – a trusted partner who can give you a helping hand as you craft your problem, identify the data needed to get you going, and move from step A to step B, and so on.”
4. Facilitate a mind shift at management levels
For many marketing departments, adopting optimization requires a mind shift – especially for business managers and product managers used to offer-centric or customer-centric approaches. The best way to achieve this is to secure top-down sponsorship at high levels of management, as the approach is meant to optimize marketing across all lines of business and all campaigns. “The interests of these sponsors need to transcend specific lines of business and product lines,” says Bhattacharjya. “They can also revise incentive structures and performance metrics for product line managers so that they are better aligned with the goals of optimization.”
5. Create a customer contact council
Consider creating a customer contact council – product line managers who get together regularly to compare the campaigns they have planned and synchronize them optimally. Ideally, this group would be led by someone with oversight for all products across the enterprise.