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Marketswitch uses the power of mathematical analytics to determine the most profitable marketing campaign strategies.
For the rest of the March 2001 issue of CRM magazine please click here
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Guessing works fine for the carny running the giant scale on the midway, but it's no way to run a marketing campaign. Yet too often, traditional marketing techniques--no matter how sophisticated they might be--fall back on what is essentially guesswork to determine how best to target customers. And it's no wonder, considering the sheer number of offer/customer-channel combinations available in today's business environment. How does the marketer determine which offer is best for which customer and which channel to
offer it on?

That's a problem Marketswitch Vice President of Marketing Gerry Grealish calls "the marketer's dilemma." "They live and breathe this problem in the trenches," he says. The dilemma takes into account "the amount of combinations the marketer has to stare at and say, 'Given my limited budget or my other constraints, how do I figure out where is the biggest value for my company's dollar? Where's the biggest return?' Right now, it's done by sticking a thumb out and hoping you're going to nail the right combo."

The TRUE Suite from Marketswitch eliminates the guesswork, Grealish says, by bringing the power of mathematical analysis to the process of enhancing marketing effectiveness. The TRUE Suite uses a mathematical technique called optimization to determine which marketing approaches will yield the highest returns. Marketswitch based its optimization framework on the same technique used in managing the manufacturing industry's supply chains and financial investment risk assessment. Marketswitch optimization, developed specifically for enterprise marketing organizations by Marketswitch engineers, is what Grealish calls the "secret sauce" that lets the TRUE Suite do its job. The five key components of the suite leverage an organization's existing data warehouses, analytical modeling and automation systems to pinpoint intelligent marketing resource allocation.

"What we find today is that companies have been using three steps of the demand chain," Grealish says. "They use the data warehouse step and they use the modeling step, then they make a leap of faith to the execution step using gut experience or a set of business rules they think will get them to the most profitable customers...What we do is mathematically create that balance for them and tell them how they should execute their marketing campaign."

The Product Suite

The suite allows users to select the overall marketing goal, then specify marketing constraints, and feed those factors into the system. The software uses mathematical optimization to analyze those factors and constraints and determines which customers should receive which offer and which channels it should be offered through to maximize the marketing dollar. The suite adapts to changes in real time and lets users examine "what-if" scenarios prior to committing marketing resources.

Suite products are TRUE for eCommerce, TRUE for Call Centers, TRUE for Web Advertising, TRUE for Outbound Marketing and TRUE for Transactional Modeling.

TRUE for eCommerce integrates with a user's e-commerce server software and works in real-time to come up with the best offer for each individual customer. The product promotes the offers that have the highest profitability, yet satisfy user-determined business constraints and goals. The product retrieves and scores customer information via the Web then builds an optimization strategy based upon the results.

TRUE for Call Centers lets call center representatives present offers personally tailored to the call center client. Like the eCommerce product, TRUE for Call Centers scores and retrieves customer data and it allows the campaign to be re-adjusted in real-time to allow for maximum campaign profitability.

TRUE for Web Advertising integrates with ad servers and enables the user to optimize ad placements in real time. The software builds an optimization strategy based on campaign results, the campaign economics and goals, and customers' behavior. Ads are changed and updated according to stored customer information.

TRUE for Outbound Marketing determines which customers to target and which campaign to use. It prioritizes and matches customer portfolios, offers and channels, such as e-mail or outbound telesales, to increase marketing effectiveness. In a matter of hours, the software can analyze customer-specified data, such as which channels should be considered, or offer groups to consider, then rolls up the projected results. The optimization strategy is based on campaign results, the economics and goals of the campaign and customer's behavior.

TRUE for Transactional Modeling offers the ability to model on non-aggregated transactional data--a vast improvement over current modeling software applications. TRUE for Transactional Modeling can automatically aggregate the data, then model it together with traditional fixed record length data.

Addition

It's no wonder that a financial partner in one of the world's largest consulting firms would look first at the numbers. Rainer Famulla with Andersen Consulting, now called Accenture, says it was the numbers behind Marketswitch's TRUE Suite that first caught his eye.

"If you're in the field, you see all these nice little campaign management software personalization products," Famulla says, "and it's all so cute, but you never see any numbers that relate to the underlying business purpose. When you see the Marketswitch demo, the one thing that jumps out at you is that here you can actually see the parameters you have, like how many customers can I sell to and how many products can I sell. Then, this thing starts calculating what your profits could be. But then, since reality is always more complicated, you can add in all the constraints you might have. You add all of these and you get a very realistic picture of what's likely to happen to the money you've earned."

In researching the TRUE Suite, Accenture analyzed information from a few Marketswitch clients, Famulla says, and the stories were quite impressive. "If you are structuring any kind of campaign, you get an amazing return," he says. "We saw something like a 10 percent profit increase per campaign. That's a lot of money."

Accenture formalized its relationship with Marketswitch in October and expects to have its first 10 clients using the TRUE Suite by sometime this year, Famulla says. "The marketing optimization approach is not only solving an ubiquitous problem, which is how to allocate resources and make a trade-off between the focus on the customer and getting the return, it's also a really great CRM tool," he says.

He adds, "All of a sudden, our clients have a way to gauge the value they
actually get out of the campaign.

They can change things around and do 'what if' scenarios, they can work with the end in mind and with their business in mind, and gauge the effectiveness of the campaign.

"We've convinced ourselves this is a must have," he says. "It will be for us just part of our integrated marketing message...If you listen to some of the vendors, their stories are so unexciting. They only cost money. We can at least tell our clients, 'Here's something, here's how it works and, guess what, we'll actually have a dashboard that will allow you to see how you're doing.'"

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