Successful new customer acquisition depends on delivering the right message to the right prospect through the right channel at the right time. Significantly higher year-over-year marketing expenses coupled with intense competition for new customers has substantially increased our clients’ cost-per-acquisition (CPA) while decreasing potential customer lifetime value. To mitigate the impact of these trends it is imperative to continually optimize marketing campaigns to ensure a positive return on marketing investment (ROMI).
The three key drivers of optimized marketing campaigns include effective targeting, differentiated marketing (creative, format, offer and channel), and accurate measurement methodologies.
Effective Targeting
Through the use of predictive analytics, we continually optimize marketing campaigns to ensure profitable results. Two key elements of effective targeting are data and performance modeling methodology.
IWCO has a best-in-class data solution that provides these key benefits to our customers:
- Marketable Universe: Our data solution typically delivers a 10-15% increase in the marketable universe versus a single compiled file―expanding the size of your best prospect pool.
- Data Accuracy: Our data solution provides up to a 40% improvement in the accuracy of name and address information versus a single compiled file―improving the relevancy of your message to potential customers.
- Potential Predictors: Our data solution provides access to over 20,000 potential predictor variables across 23 credit and demographic data sources―ensuring the unrivaled performance of our predictive models.
IWCO utilizes best-in-class performance modeling methodologies that leverage the power of our robust data solution. Performance modeling applies statistical techniques to analyze the demographic, lifestyle, and behavioral characteristics associated with prospective customers who have exhibited a targeted behavior (response, conversion, value, attrition, etc.). These models provide insight into the key drivers of prospect behavior and allow us to predict the likelihood that any given prospect will exhibit the behavior in the future.
Our approach includes developing models for each selected data source and combining the individual models into a meta model that is used in selecting prospects for acquisition campaigns.
Differentiated Marketing
Segmentation provides insights into the differences among prospective customer groups that can be used to develop differentiated messaging, value propositions, and engagement strategies. Segmentation makes marketing more effective while predictive models make marketing more efficient. Combining predictive models with segmentation enables organizations to align prospective customers with the optimal marketing treatment strategy (offer, messaging, timing, channel, media, creative version, etc.)
IWCO works with our clients to identify the best segmentation solution (custom or off-the-shelf) to meet their needs based on key metrics and the ability to differentiate across key dimensions.
Things to consider in deciding on the best segmentation approach:
- Precision: Focus on individual or household-level instead of area-level segment coding to ensure a meaningful level of differentiation.
- Simplicity: Custom segmentation solutions are complex, provide limited incremental benefits (in most cases), and like any model need to be refreshed on a periodic basis.
- Timing: We estimate that using an off-the-shelf solution instead of developing a custom segmentation solution will reduce the overall implementation timeline by at least three months.
- Flexibility: We can create custom roll-ups of the tactical segments into strategic groups that will support the unique needs of different end-user groups but still map back to the primary segmentation scheme.
- Cost: The cost associated with the ongoing coding of an off-the-shelf solution is typically lower than the cost of developing and deploying a custom segmentation solution.
Accurate Measurement
Effective campaign assessment starts with a clear definition of the objectives, KPI’s and success criteria for each campaign.
All measurement approaches require appropriately sized, randomly selected treatment cells to ensure statistically significant results reporting.
In addition, randomly selected non-treated holdout control groups are useful with direct mail to enable the measurement of the incremental lift associated with the treated audience.
For integrated campaigns where multiple marketing channels are utilized we need to consider more sophisticated methodologies including fractional attribution in order to accurately measure the incremental impact associated with the campaign.
Regardless of the methodology used, IWCO’s campaign dashboards and presentations are always focused on the actionable insights and recommendations, rather than simply discussing the analytic approaches and numbers.
Need help improving the results of your marketing campaign? Contact us to see how our data and analytics team can Make Better Happen for you.