Campaign Management Software

Database marketing software enables companies to deliver timely, pertinent, and coordinated messages and value propositions (offers or gifts perceived as valuable) to customers and prospects.

Today's campaign management software goes considerably further. It manages and monitors customer communications across multiple touch-points, such as direct mail, telemarketing, customer service, point of sale, interactive web, branch office, and so on.

Campaign management automates and integrates the planning, execution, assessment, and refinement of possibly tens to hundreds of highly segmented campaigns that run monthly, weekly, daily, or intermittently. The software can also run campaigns with multiple "communication points," triggered by time or customer behavior such as the opening of a new account.

Increasing Customer Lifetime Value

Consider, for example, customers of a bank who use the institution only for a checking account. An analysis reveals that after depositing large annual income bonuses, some customers wait for their funds to clear before moving the money quickly into their stock-brokerage or mutual fund accounts outside the bank. This represents a loss of business for the bank.

To persuade these customers to keep their money in the bank, marketing managers can use campaign management software to immediately identify large deposits and trigger a response. The system might automatically schedule a direct mail or telemarketing promotion as soon as a customer's balance exceeds a predetermined amount. Based on the size of the deposit, the triggered promotion can then provide an appropriate incentive that encourages customers to invest their money in the bank's other products.

Finally, by tracking responses and following rules for attributing customer behavior, the campaign management software can help measure the profitability and ROI of all ongoing campaigns.

Combining Data Mining and Campaign Management

The closer data mining and campaign management work together, the better the business results. Today, campaign management software uses the scores generated by the data mining model to sharpen the focus of targeted customers or prospects, thereby increasing response rates and campaign effectiveness. Ideally, marketers who build campaigns should be able to apply any model logged in the campaign management system to a defined target segment

Evaluating the Benefits of a Data Mining Model

Figure 1-1, which shows a "gains chart," suggests some benefits available through data mining. The diagonal line illustrates the number of responses expected from a randomly selected target audience. Under this scenario, the number of responses grows linearly with the target size.

The top curve represents the expected response if you allow the model scores to determine the target audience. The target is now likely to include more positive responders than in a random selection of the same size. The shaded area between the curve and the line indicates the quality of the model. The steeper the curve, the better the model.

Other representations of the model often incorporate expected costs and expected revenues to provide the most important measure of model quality: profitability. A profitability graph such as Figure 1.2 can help determine the number of prospects to include in a campaign.

In this example, it is easy to see that contacting all customers will result in a net loss. However, selecting a threshold score of approximately 0.8 will maximize profitability

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