Marketing intelligence is more than just knowing what has worked in the past. Much like the Great One [chorus] who would play where the puck was going, good marketers need to look ahead on the curve. One essential tool in the suite is the capability to allocate budget to the initiatives that offer the best bang for the dollar. The marketer has to factor in the target audience, the timing, the message and the size of the promotion. The example below shows what a marketer should do and the levers he/she can play with to optimize results.
A very selfish plug here. If all this seems too complicated, then consider Polytab marketing intelligence automation. The screenshots below are taken from Polytab. The process described below is embedded into the cloud application. It is that easy.
Step 1: Collect the data
These are quantitative data that should be available through your analytical data mart.
- Revenues by month
- Revenues by segment by month
- Revenues by campaign by segment by month
- Number of targets per campaigns per segment per month
- Number of prospects per segment
- Fixed costs per campaign
- Variable costs per target per campaign
- Size of upcoming campaign
Step 2: Pick the campaign that best “looks like” the upcoming campaign : This can be based on the type of promotion or season that you are picking. The example on the right assumes that the upcoming “Wise Geek campaign” is most similar to the “Electronics blowout” in the previous month. [Note: If you are new to direct marketing, I would recommend extracting a sample of 5-10% from your customer base and using that Seed File as default look-alike for future campaigns]
Step 3: Optimally allocate customers for the upcoming campaign: For a given campaign size the optimal allocation means that you start with the segment that got you the best results in the previous “look alike” campaign and build from that. Note the “estimated revenues per target” column based on past revenues of the look-alike campaign on the respective segments. However, these estimates [Warning: You cannot assume that your response $’s for a segment will grow linearly. Taper off the response $’s as you grow your target base. This is part art, part science and depends on a few factors. Email me if you want to know more. Always glad to help].
Step 4: Reset the campaign assignment as per business guidance: Tweak your campaign as per business guidance on target population size and characteristics. The revenue estimate is based on the past revenues for the look-alike campaign on the chosen segment. The slider in the image on the left shows how the revenue forecast changes. The screengrab on the left is taken from Polytab and you will notice that the revenue estimate is tamped down. So you grew the target base 10x from 2,570 to 20,251 but the revenues only grew by about 42% to $8,104.
Step 5: Review overall campaign costs and revenues: This is the crunch point. Your call whether you want to go long on the campaign or hold back to keep some cash for future campaigns. The output in Polytab looks like the screengrab below.
Step 6: Download list and deliver to mailer: If this looks good, request your data guy to do the pull as per your specifications broken out by your target segments and deliver the list to your campaign execution team (direct mail or email).
Make marketing easy
Once again a shameless plug. The process above is well-defined but you need active participation from analysts to make it happen. You can get it all in a slick interface withPolytab marketing intelligence automation. Use the button below to register for an info-session
Use Promo-code YE2013 to get 2 months free
If you register now for an info-session between now and end of the quarter March 31, 2013 you can get two months free on Polytab on an already low pricing. Use thepromo-code YE2013 when you register with the Make-Marketing-Easy button above.
Process Intelligence Foundation
This Process Intelligence Foundation series will cover the following topics.Subscribe to the blog using the button on the contact form. Or if you have a different question you’d like to see addressed, drop me a note.
- How to optimally allocate the marketing budget.
- How to factor in program fatigue and cannibalization in marketing campaigns.
- How to estimate the revenue impact of social media campaigns
- How to estimate customer lifetime value
- How to map market research against your customer universe
- How to calculate true revenue impact of direct mail/email campaigns.
- How to forecast revenues on upcoming marketing campaigns
- What is the best practices campaign management process for direct mail/email campaigns.