Have your cake and eat it too with increased revenues and profit with marketing savings.

Advanced analytics is often associated with lower marketing costs, reduced circulation, and sales loss while it produces more efficient, profitable marketing. While the efficiency is a welcome benefit, the accompanying top-line revenue loss often is not. While lost revenue may be the result from being more efficient, this needs to be replaced with new marketing initiatives to meet an organization’s financial goals. Can you have your cake and eat it too when it comes to both marketing efficiency and effectiveness? Let’s explore the following to see how.

Marketing Efficiencies = Cost Savings
Marketers can realize significant cost savings with the application of advanced analytics. With accurate models and smarter contact strategies, 10-20% of most companies’ marketing budget can be eliminated with 1-2% loss in revenue. While this can be worth a 5% gain in profits, the revenue loss can be troublesome for companies seeking to grow their customer base and increase their top-line.

Waste is so prevalent – years of spending more and the inherent low response rates led to over-spending with redundant marketing efforts. Since much of what we learn from advanced analytics comes from history, it is relatively easy to find examples of unworthy spending. Better predictive models readily reduce circulation from previous levels. Contact optimization easily finds more efficient contact strategies and realizes marketing savings with minimal sales loss.

Marketing Effectiveness = Revenue & Customer Growth
The same predictive models and smarter contact strategies that remove marketing waste can be directed towards growth initiatives. The top-line revenue growth and larger customer base are worthy objectives and not to be ignored. Targeting is the antidote to revenue losses due to marketing efficiencies. New predictive models alone can increase the effectiveness of marketing events with up to 30-40% boosts in sales per mailing (SPM) on 20-50% of the customers, so depending upon the state of current segmentation SPM gains of 15-20% are possible. Marketing organizations have seen 5-20% incremental overall gains in revenue by shifting marketing expenditures to more targeted contact strategies. Customer insights gained from analytics can be used to increase revenue and customers.

Efficiency Funds Effectiveness = Optimal Profits
Today & Tomorrow Improving your business with more efficient and effective marketing is challenging. Marketing is looking for both efficiency and effectiveness – remove wasteful spending and find better places to spend the savings to grow the business.

The best strategy is to let efficiency gains fund effectiveness initiatives. Marketers need to develop a wider set of marketing touch-points to acquire and reactivate customers as well as ratchet up their customer conversion across multi-channels. In addition, upselling and cross selling their product mix is a good strategy to engage customers in their brand offerings. By funneling the savings from marketing efficiency into more effective and broader marketing— you can have your cake and eat it too!

About Randy Erdahl
Randy is an analytic marketing champion and is Clario’s Executive Vice President, Optimization Solutions and co-founder. As the executive leader of optimization solutions, he provides vision and direction for Clario Stream Solution development, as well technical leadership to sales, marketing and direct client interaction.