Probably a lot!  Today’s marketers face many challenges.  A vital one is making efficient and effective contact strategies for your customers.  The recent proliferation of data and marketing channels has contributed to this difficult decision of who is sent what.  I see ten important failures that can be corrected in virtually every marketing contact strategy.

1. No customer focus. The circulation decision should be determined by choosing the best contacts for each customer rather than choosing the best customers for each contact. I’d estimate that at least 90% of the circulation decisions made by marketers are contact-centered which tends to over-promote your best customers and under-promote your worst customers. It may work well with your marginal customers, but wasteful and sub-optimal on the top and bottom of your customer list.
2. Incomplete revenue attribution. Print and email marketing generates phone and internet purchases. Often the link between the marketing effort and the purchase it triggered is missing. Some of these connections can be made directly and are by capturing marketing codes with the purchase; however a growing portion of the revenues do not have a direct connection. Business rules or inference models can make the indirect connections which improve circulation decisions.
3. Ignores revenue cannibalization. Most marketing contact schedules feature overlapping marketing efforts with shared product and competing promotional incentives. As a result, the performance of any individual marketing contact must recognize its surrounding competition for purchase revenue. Customer revenue is cannibalized between those contacts in close proximity and with similar content. The cannibalization impact to demand can be modeled and estimated. When ignored, customers receive redundant promotions and marketing inflates costs and expected revenue.
4. Unknown saturation point. Adding more and more contacts to your most active customers has diminishing returns. There is a saturation point where the next best contact is not worth the cost. In fact, some customers and contact channels may reach a saturation level where more results in less – the demand begins to lessen upon reaching marketing saturation. With a customer-centric approach, the potential marketing contacts can be rank ordered on their incremental profit contribution, and then chosen to be mailed based upon a profit or investment threshold. This enables marketing to mail the best contacts and to mail the right number or spend the proper amount.
5. Uncertain investment payback. Spending marketing dollars on your customers is similar to managing a financial portfolio. Balance the risk and reward of circulation decisions to reach corporate marketing goals. Customer value analyses yield valuable payback information on different customers. This enables the contact strategy to balance short and long term profit contribution for a healthy customer base now and into the future.
6. De-centralized circulation decisions. Many marketing organization separate circulation decisions by marketing channel or media. Decision silos produce conflicting, sub-optimal contact strategies. All customers and contacts should be tossed into a common circulation decision-making process where ‘survival of the fittest’ defines the customer contact streams rather than ‘whoever shouts the loudest’.
7. Poor planning assumptions. Historical analysis is the baseline for next year’s circulation plan. Know the demand per contact relationship of your different customers and channels. Compare this relationship to your customers’ value and historic contact treatment. The baseline plan assumes history repeats and applies updates to customer counts and adds/drops of contacts from last year’s plan. Historical analysis with an emphasis on last year provides updates to performance assumptions. Customer file tracking provides updated assumptions on how your customers transition over time. Getting the baseline right is the first step.
8. Inflexible planning scenarios. Most contact strategies are planned via spreadsheets with fixed customer segments. With years of history under this structure it becomes comfortable to continue with it forever; however you want planning to keep pace with your business. Marketing needs to devise its strategic contact plan with well-defined customer segmentation. The segments should include channel, brand, or media along with the traditional recency and frequency metrics. What-if scenarios should reflect changes to customer counts, contact schedule, contact content, contact performance, decision thresholds, and financial factors. The result is more flexible and accurate simulation.
9. Top-down planning. Certainly there is a need for corporate marketing objectives; but a bottoms-up plan with overall targets is a better way. Plans developed from a detailed customer and contact perspective mimics its eventual execution, so strategy and tactics are aligned. Tracking against plan lets you see what is working and what is not, so plan adjustments can be made quicker and with more supporting justification.
10. Dysfunctional MBO’s. Too many organizations incent their marketing management team with conflicting or counterproductive objectives. Too often the primary goal is revenue volume without enough emphasis on revenue quality. By this I mean more revenue at almost any cost. Well-crafted management objectives balance short and long term profit contribution which includes growth in customers, revenue, and profits.

These common failures are correctible. The fixes require a commitment, mostly one of conviction rather than time or money. Fixing any will improve the effectiveness and efficiency of your marketing contact strategy.

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.