Predictive Tactics: Five Database Modeling Strategies
Tactic #4: Use information gleaned from the model to help you better target your catalog creative and marketing offers.
Using predictive modeling you can extrapolate the results of version-tests of creative (e.g., different covers) to identify the best target customers for each creative tested. There’s also the potential, if you have the data at your fingertips, to do other interesting things, such as identify key customers and print specially targeted offers on catalogs using print-on-demand techniques.
“We all appreciate that the catalog-planning cycle is long, and you can’t always do things on the fly like test creative,” says Connors. “With the right data there are things you can do that you couldn’t do before and that are of real importance for long-term customer value.” For instance, he says, “You can look at value-tier migrations, and extending an offer to upper- and mid-tier customers to keep them at those higher buying levels so they don’t become lower-value customers. That kind of creative needs data [to back it up].”
Fiedler says other applications include examining when is the best time to make an offer and what’s the best week to mail. “For example, when should Customer A get your big book? This may differ depending on when they came into the buying cycle, what business they’re in, if they’re a b-to-b customer, or on other factors like seasonality.”
Tactic #5: Analyze data from your models to see if they lead to new or different merchandising directions.
“Supplying more data and analyzing those data open up other possibilities: from identifying new cross-sell opportunities to uncovering the idea for a new specialty catalog for a certain customer subsegment,” Fiedler says. “It’s customer analysis using a combination of data mining and predictive modeling.”
Connors adds that by using a combination of types of models, you can look at customer segments to find new homogeneous groups of customers. You may have had preconceived notions of who your customers are, he notes. “It becomes a cycle where this is supported by the mailing of only those segments and those kinds of outside lists.”