“Marketing optimization enables the marketing organization to achieve the maximum possible return from their investment within the constraints they have to work with,” said Amartya Bhattacharjya, Principal, SAS Customer Intelligence. “It’s been proven to produce tremendous returns, and enable strategic analyses of campaigns to help ensure future success. It allows marketers to not only determine which offer and campaign to send to a select customer at a given time, but it also helps determine how much money should be invested in marketing.”
For SAS, the term optimization refers to an analytical and mathematical function - a very specific flavour of decision support technique drawn from the fields of operations research and management science. Optimization enables marketers to accurately predict how constraints will affect their overall contact strategy, so they can avoid common problems like over- or under-contacting customers, budget overspending, etc.
The internal process, resource availability, and technology are challenges that most companies face when implementing marketing optimization. “The biggest challenge is a mind shift that business managers and product managers need to make in order to accommodate themselves for optimization,” said Bhattacharjya. “There has to be a top down sponsorship for this kind of an application. While users often focus on their own programs, their own line of business, and their own campaigns, marketing optimization is meant to optimize across lines of business and campaigns. Therefore it’s important to have executive sponsorship and for the application user to have a higher mandate and the ability to work with multiple campaign managers or multiple product managers.”
Optimization can often be a tough sell to senior executives, under the pressure of tightening budgets and limited resources. Bhattacharjya explains that there are four primary business benefits that should always be stated when making the case for marketing optimization:
By analyzing consumer data to determine which offers or marketing campaigns, presented at what time will be most effective for specific customers, marketing optimization drastically increases the likelihood of success. Gone are the days of mass, generic campaigns as they are often ignored by consumers, or worse seen as an intrusion. Consumers today expect more from marketers. Therefore, now more than ever, it is imperative that marketers tailor campaigns to meet the needs of individuals. Companies that do so well are poised to reap the rewards.
Minimize the marketing campaign cycle time and costs
Marketing optimization takes the guess work out of campaign planning, reducing both how long it takes to create campaigns as well as the costs associated with them. With enhanced optimization speed made possible by high-performance analytics, marketers can perform detailed modeling, selection and what-if analysis at a much faster rate in order to solve critical issues and focus on strategic initiatives without getting hung up on tactical tasks. It becomes possible to analyze hundreds of campaign offers, thousands of contact policy constraints, and millions of rows of customer records in just minutes, rather than the hours or even days it would take to run in the past.
Improve customer experience by implementing customer contact policies
Consumers expect marketing offers and campaigns to be tailor made to their needs and delivered in-line with their contact preferences. In order to provide a positive customer experience, marketers must ensure that they have a reliable contact policy in place that ensures they are not contacting customers more than each individual has indicated they are willing to be contacted. With marketing optimization, these constraints can be woven into the models deployed to automatically prevent campaigns from overlapping and creating more points of contact with an individual than desired.
Better predict the impact of potential changes using ‘what-if’ scenarios
Implementing changes to campaigns and business constraints without understanding the impact can be risky. With marketing optimization it is easy to create ‘what-if’ scenarios to see how any changes to business constraints would affect outcomes - no matter how complex the changes, nor how numerous the variations. For instance, scenarios can be created to see how much revenue would go up if the campaign budget were increased by a certain percentage, or how a higher contact frequency would affect customer lifetime value.