Predictive Modeling

Predictive modeling can optimize your profit on each direct mailing plan. David Katz Consulting uses sophisticated statistical and data mining techniques to combine data from internal and external sources. The result is a prediction of revenue from each mailing piece (catalog, brochure, letter) to streamline your company's planning process.

Add value and save money: On the most basic level, your organization can use this prediction to suppress mailing of unprofitable pieces, creating bottom-line savings. In addition, you can repeat mailings to the most profitable customer groups, boosting your return on investment. Finally, predictive modeling will allow you to identify other customers on your database who are profitable.

Refine your mailing strategy: Using predicted response to develop a single ranking of customers will provide opportunities and tools to perform additional tests for your marketing approach. It can illuminate new strategies for segmenting your customers into groups with different needs and interests. The model provides a tool that can facilitate the testing of marketing strategies which have different impacts on your best and worst customers. For example, a second mailing can often be positive for your best customers, yet wasteful when applied to your borderline customers.

In addition, modeling can test larger marketing pieces against a smaller version to determine whether the higher-scoring names have a different preference. Predicted response will help you sharpen your overall sales forecasts.

Multi-channel marketers can benefit from the right kind of models. A deeper understanding of channel preference makes a huge difference in overall corporate strategy. For example, modeling can help answer the following questions:

• How did mailing the catalog affect retail sales?
• How much of the sales on the Internet were caused by the mailing of a catalog or brochure?
• How many sales would have been achieved without this extra cost?
• How convenient is the retail store for each customer?
• What has been their channel choice or choices in the past?

The answer to these questions requires the right tools, knowledge, and research. The same catalog can drive some customers into the store, while stealing sales from the retail channel for customers with a different profile. Modeling will allow your company to create a statistically valid P&L statement for each customer in your database, and provide a tool to evaluate the overall incremental result of mailing to a specific customer.

Other services: For marketers with your own statistical staff, David Katz Consulting can provide mentoring, relieve temporary staffing shortages, or develop SAS code for your internal use.

If you are already using a generic model from another vendor, a customized analysis can give you a more competitive edge. David Katz Consulting will research and analyze your specific data and business needs to develop powerful models for your company, and provide the business experience and insight to provide you with the best results from these powerful tools.

David Katz Consulting 1.800.601.0689 info@davidkatzconsulting.com