The New Way to Allocate Marketing Resources
Today, two Chief Marketer articles on the subject of how to best allocated marketing resources. The first article focuses on how to look at the bigger picture - budgeting based on overall marketing impact, instead of on the ROI of single campaigns. Or in other words, an alternative to making educated guesses.
The solution is called Marketing Optimization - "an analytical approach that helps a firm allocate resources across products, channels, offers, creative executions and seasons" and helps firms "adjust strategies as conditions change, accommodate budget restrictions and more." The only pre-requisites are strong CRM and database skills. Based on those you can "examine individual customer histories and determine the best contact strategy based on potential revenue, personal preferences and behavior."
The article details the stages a company must go through to optimize their marketing (including campaign, contact and market mix optimization), and discusses how it works in the real-world with a case study of a retailer that "studies aggregate transaction data along with competitive, macroeconomic and brand-tracking information to develop a system of models that can size up the direct/indirect effects of various categories of marketing expenses on revenue."
The second article discusses how to use customer and loyalty databases to "understand customer value by profiling current behavior" and to "assist in predicting future value." This allows for "more informed marketing decisions and more effective resource allocation." This type of predictive modeling enables users to "target multiple offers by segment or focus on particular customer groups based on current or potential value."
The article details the step-by-step process required to get started - setting objectives, creating a dataset, defining the outcome, determining the method, establishing the time period, performing pre-modeling, building and testing the model, and finally implementing the model.
Posted by Universal Ad
The solution is called Marketing Optimization - "an analytical approach that helps a firm allocate resources across products, channels, offers, creative executions and seasons" and helps firms "adjust strategies as conditions change, accommodate budget restrictions and more." The only pre-requisites are strong CRM and database skills. Based on those you can "examine individual customer histories and determine the best contact strategy based on potential revenue, personal preferences and behavior."
The article details the stages a company must go through to optimize their marketing (including campaign, contact and market mix optimization), and discusses how it works in the real-world with a case study of a retailer that "studies aggregate transaction data along with competitive, macroeconomic and brand-tracking information to develop a system of models that can size up the direct/indirect effects of various categories of marketing expenses on revenue."
The second article discusses how to use customer and loyalty databases to "understand customer value by profiling current behavior" and to "assist in predicting future value." This allows for "more informed marketing decisions and more effective resource allocation." This type of predictive modeling enables users to "target multiple offers by segment or focus on particular customer groups based on current or potential value."
The article details the step-by-step process required to get started - setting objectives, creating a dataset, defining the outcome, determining the method, establishing the time period, performing pre-modeling, building and testing the model, and finally implementing the model.
Posted by Universal Ad
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