By Peter Coy, President Prodigm Inc.
Measurement and analysis of response rates and offer effectiveness is essential for you to make sensible management decisions. The variables are endless: demographic groups, offer intervals, channel characteristics, previous purchase history etc. It all adds up to a real system challenge to deliver meaningful results. Measuring response can help you decide when to make upgrade or retry offers. The continuous marketing process consists of making a set of timely relevant and personalized offers. The management of the process requires a careful analysis of both the qualities and contexts of the offer and the response that the offer generates.
How do you compare response levels between offers made at different times?
Consistency: Ideally, the quality and context of the offers to be compared needs to be consistent. So for example, an offer made to respond to an initial enquiry should only be compared with other initial enquiry response statistics for the same product.
General Classification of offers is required to make the comparison and subsequent decision making process easier. An example of general classification could be "retry sale offers after 6 months".
Grouping offers by critical date: Measuring response during a continuous marketing effort is quite a problem as new offers are made constantly. Grouping by time period can help, for example, prospects can be put in groups by the week of the first offer being made. There is a need for a delay from the time of offer to an established final cut-off date before a final analysis can be made. Often it is important to judge a series of offers as an offer "package" as the result may be based on the sum of the offers rather than the final reminder that preceded the sale.
What is the right time to generate an offer?
Offers should be generated at a point in time when the offer is likely to be most successful. For proactive offers, (that you generate according to a timetable), that time can only be determined by careful testing and analysis. For reactive offers (if the prospect has responded to some generalized advertising), it is essential to respond with a personalized offer immediately. Nobody wants to be bombarded with offers, however it is an important service element to make appropriate offers on a timely basis. If an offer is made to upgrade coverage, it should refer to previous coverage and benefits and provide a well-reasoned rationale for requiring further coverage.
What standard tools are available?
Once the system has generated a record to record each offer and outcome, the results can be transferred into a variety of OLAP tools for in-depth analysis and drill-down. The essential aspect is to record what is happening and the associated circumstances of an offer. This information is then assigned a time-slot in a reporting "cube". Initially, useful analysis can be performed by the OLAP facilities in MS Excel. It will help prove the prototype and reveal further needs in advance of investing in a more sophisticated and advanced system. Advanced systems feature greater integration and more "smarts" to help arrive at conclusions that are not apparent on casual analysis. Some systems feature a "Dashboard" for on-going review of results and a reporting structure to provide appropriate analysis to various levels of managers.
All articles Copyright Prodigm Inc. 2001, 2002, 2003 and 2004.
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