The optimism of #Purpose & science of #design in forging #digital customer experiences! Opinions my own!

There are five steps involved in moving your company from traditional campaign
management to Contact Optimization marketing.

1. Assess your current marketing programs.
You’ll want to look at what data you currently capture from your customers — communications and touch points as well as transactions — how you gather that data, and how you use it. You have to examine both your database and organizational structures. If they are siloed, that will have to change to make Contact Optimization marketing work. You need to consider how direct mail plans and email plans are formulated and what the results have been overtime. Particular attention needs to be paid to loyalty programs because the customers in these programs are normally more contact-worthy.

2. Set your goals.
As indicated, you will be looking for increased ROI. This will not be on an individual campaign basis, but overall. Your goals should specify percentage lifts in repeat buying as well as dollars of increase in customer lifetime value. Both of these goals tie directly into increasing loyalty.

3. Develop the Contact Optimization model.
You want to identify a target customer population for a whole season. Factors in the model will certainly include traditional RFM and product preferences, but should also weigh purchase channel preferences and communications channel preferences — the two may be quite different, as well as customer-provided preferences on frequency of communication. The model breaks the customer population into segments, then slices those segments based on the products being marketed. Seasonality and product or service affi nity should be factored in as well. Some customers buy only once a year, always at the same time — so direct mail promotions to them at other times could potentially be productive. Email contacts could be the answer.

In addition to data residing on the base, the model can include overlays of demographic and attitudinal data. The model should be designed to yield an ideal number of contacts for each individual in the target customer population and what the mix of contacts should be — direct mail vs. email vs. telemarketing. Within this mix, the nature of the direct mail contacts can be delineated — full catalog, mini-catalog, or reminder postcard/selfmailer.

4. Design and execute tests of the model.
One panel of the test, the control group, would be selected based on the older campaign management methodology. Individuals in this panel would receive only the catalog. Panels from the model would be based on adhering to the contact frequency and mix suggested and on raising/lowering frequency and/or changing the mix. Other panels could hold frequency, but test the timing between contacts. You can also test using email as a sales medium unto itself or as a support medium (announcing that a catalog is on its way, or that a retail outlet in the neighborhood is having a sale).

5. Measure the results.
Over a season, how did the panel adhering to the model compare to the control group and to the panels in which number, nature, and timing of contacts were changed? You need to analyze total purchases, not just mail purchases. Did only those customers designated to receive emails contribute to your profi tability? Did email contacts raise ROI among those customers who had previously only received catalogs? Beyond the season, you’ll want to look at lifetime value among the customers chosen by campaign management methodology vs. customers getting the contact frequency/mix specified by the model. In other words, what effect does Contact Optimization marketing in year one have on succeeding year loyalty and results?

Moving to Contact Optimization marketing doesn’t happen overnight. While steps one through three can be accomplished relatively quickly once a commitment is made, testing and measuring how the model performs can take up to a year. The incentives for taking immediate action are clear. Contact Optimization marketing lets companies communicate with the individual customers most likely to buy through channels that provide the best Return on Investment. Contact Optimization marketing speaks with one  voice with a frequency based on customer preference. It is the marketing strategy for an increasingly individualistic marketplace, strengthening the customer’s relationship — and
lifetime value — with your brand.