In today’s marketing world, reaching your customers has become increasingly more complicated. You may find that you use multiple sales channels with multiple products, many offerings and all of them priced differently. You likely have a huge pool of prospects to choose from and different creative tactics that you want to test. Deciding how to arrange all these moving parts can become a bit of an onerous task. This is why Marketing Optimization is a type of marketing analytics tool that helps marketers choose the best (and most profitable) combination of who they should contact, what channel they should use and what offer they should make. Marketing Optimization brings into focus the right price, the right channel, the right product, and the right person – even the right time to contact that person. But before you jump in, prepare a checklist. Begin by:
1) Identifying your financial objective
One of the first things you and your team need to establish is your financial objective. When you establish this one primary financial objective, whether it is revenue, maximizing ROI, minimizing cost etc., Marketing Optimization will determine the optimal combination of marketing variables to maximize your results.
This sounds simple but in a world where you have multiple products it can be complex. Segregated products can create conflicts of interest with one another. That means you need an approach to solve these conflicts between your various marketing channels. The way to look at it is that you should all be headed in the same direction. For example, maximizing your total revenue could be the agreed-upon mandate. When rolling out Marketing Optimization, an Executive’s role should be to ensure all Product Managers are in the same boat and not just looking at their own objectives. Corporately you need to unite your financial goals to achieve Marketing Optimization.
2) Picking the best tool
There are many tools to perform Marketing Optimization. Think of a tool like a black box, you have less control over the algorithm because the tool is ready-made, meaning you have to invest in a good tool to ensure your needs are met. Many players offer a Marketing Optimization solution, but not all software delivers the same quality results. For example, Gartner regularly evaluates Marketing Optimization software and classifies them into 4 “magic quadrants” based on two dimensions: 1) completeness of vision, and 2) ability to execute. Some tools, such as SAS Marketing Optimization, were identified as the “leader” in the top quadrant consistently over the past couple of years.
Source: Gartner Magic Quadrant for Marketing Resource Management, Kimberly Collins, February 2 2015
3) Having the right infrastructure
A Marketing Optimization tool is not a plug and play. You can’t have the mindset “I’ll buy it, install it, and it will do the magic.” It relies on two important things, your data and your prediction. The data component means that your data requires cleansing, such as merging and preparing, to ensure accuracy and the proper structure before it is integrated into the tool. If you don’t have these capabilities in house, invest in data experts who can process and piece your data together. The prediction component in Marketing Optimization means that the driver to help you achieve or identify the best combination of variables to maximize your primary financial goal is based on predictions. This is your forecast of how likely someone is to respond to your campaign, and then what the monetary value of this customer/prospect might be.
It’s important to note that the accuracy and granularity of your prediction directly impacts the ability of the tool to optimize your campaigns. What that means is if you don’t have the proper predictive infrastructure, then before you invest in Marketing Optimization you need to build a roadmap that will outline how you can ensure your infrastructure is ready.
4) Scaling your investment
As you’re diving into your preparation work, research whether you want to take the risk of doing the data work in house or whether to outsource it. If you decide to outsource, figure out what the most affordable option is. If you are using one shop for all of your data work, predictive analytics and Marketing Optimization tool, you might find it be more cost effective. Scaling your investment is important because it is easy to get carried away with the wrong vendors or spend too much on internal resources, only to have improperly implemented your Marketing Optimization tool in the end.
Cornerstone Group of Companies is a full-service database marketing and insights shop offering a variety of tools, including SAS Marketing Optimization, to our Clients who span a range of industries. To learn more about what it’s like working with a Marketing Optimization tool, read Cornerstone’s new White Paper: Marketing Optimization In Action found at http://www.cstonecompanies.com/Products/Database-Marketing/Whitepapers.aspx or contact Jamie Lehman, Marketing & Communications Manager, at firstname.lastname@example.org.