(you should also see the great content on my employer’s completely revamped website and blog as well. This post is here, but feel free to click about the whole site, we did it as our Poke the Box test project.)
Over the last several months, we’ve found the Covalent Marketing team spending a considerable amount of time talking about Contact Management and Optimization. I have found all these conversations to be educational, enlightening, engaging but challenging none the less. The topic is vague, and while that leaves a lot of room for good discussion, it can be very frustrating too. As you might expect, we have a perspective here, and I thought we’d take some time over the summer to share our insights with you.
For this first post, we’ll just provide a foundation for the next set of posts.
Contact Management is… A well-governed set of principles that deliver an engaging, interactive dialogue with each customer that exist across the organization and supports both effectively
…and Optimization is the way you apply the strategy of Contact Management. This can be performed in different ways with varying levels of sophistication.
A Business Rules Approach : Most organizations fall into this category and is defined as a decision-tree approach that is easy to automate, easy to explain. Unfortunately, it is also the most likely to degrade over time due to changes in the business, unless attention is specifically paid to keeping it current and validated. It is also subject to relying heavily on the past as a predictor of future performance – which may or may not be suitable for some organizations where change in marketing, markets or consumers is underway.
A Mathematical Optimization Approach applies a greater level of predictiveness to the strategy. It allows modeling of a variety of circumstances and often delivers greater precision in targeting. It takes longer to degrade in quality and predictability. It can, however, require specialized resources and tools. It can also be more challenging for the organization as it removes subjectivity and creativity from the process. These are obstacles more to the culture than to the process. Most business people want to believe they can outpredict the math. Rather unfortunately, most of us cannot. (as we saw with IBM’s Watson on Jeopardy)
A Mathematical Optimization w/Randomization Approach (e.g. Monte Carlo) again improves the ability of the contact strategy to deliver results by introducing variability to the model over time. While these types of techniques can be used to increase customer responsiveness and engagement as much as 2 years out, it cannot be completed as part of any standard marketing tool suite.
On the surface this all seems fairly straightforward and easy to understand, concepts that marketers have seen/heard before but why is it so hard to adopt and execute on? Some of the challenges we see and those organizations face are the following:
- Every marketer within an organization wants the same piece of the customer pie – for example, those high valued customers
- Organizations have aligned campaigns to product groups and/or business units
- Marketers are driving campaigns based on budgets versus customer insight/value
- Metrics are not clearly defined that drive an organization-wide goal
- Campaigns are aligned vertically not horizontally across channels and customer segments
Again – these are organizational issues. The software, as good as it is, the math, as predictive as it can be, can’t see the solution to these things. They’re all about people who are willing to examine new and better approaches. Who is focused on business improvement?
So, as you think about what type of optimization your organization needs – or at least is ready to handle – also consider these 3 questions on Contact Management and Optimization within your organization:
How do I see contact strategy development in my organization?
Who owns it in my organization?
How sophisticated can/should it be?
-Ryan Kosanic, ryan_kosanic
PS – (follow him, he’s new to twitter and could use a follow or three) – cjgw