Building a Better Foundation Via Mining
But there are other serious business challenges that teleservices providers should respond to in the same proactive manner. They are:
• Increasing price point pressure across the industry. How do you differentiate yourself in the marketplace and add more value to what you're doing to justify the cost of your service?
• Rising pressure to show results that significantly add to the bottom line and justify the investment in this channel. This means improving sales per hour, response rates and retention rates.
• Responding to consumer concerns about privacy and the threatening political/legislative activity being generated by it.
• Using available information about prospects and customers to better understand their needs and help enable one-to-one marketing.
Not surprisingly, these challenges also represent significant opportunities. The effective application of well-known and reliable data-mining techniques could answer these challenges and provide powerful cost-benefit justification for telemarketing.
Data mining discovers predictive patterns in consumer behavior. It then connects predicted consumer behavior patterns with the key performance metrics necessary to achieve dependable financial control and management of a marketing campaign. Typical key performance measurements that make or break individual marketing campaigns' financial performance - and that data mining can help predict and control - include cost per lead, contacts per hour, sales per hour, sales per lead, cost per sale, revenue per sale, profit per sale and expected lifetime value per sale.
Therefore, based on historical campaign analysis and predictive model building, data mining provides telemarketers with the ability to confidently call only those people most likely to respond to an offer or message and avoid calling those who won't. This represents taking a targeted "rifle" approach rather than a "shotgun" approach to calling campaigns, which delivers higher response and revenue at a lower cost. Ultimately, you are much closer to contacting the right consumer with the right product and offer at the right time.
The data-mining-enabled rifle approach also provides an effective way to allay the real and serious fears of those who feel that telemarketers are invading consumer privacy. This is because you have done the analysis to identify and call only those consumers who are responsive and most likely to want to receive your offer. This would show that telemarketers are formulating and executing their own improved or best business practices in response to this issue, along with following laws and regulations already in place.
Finally, data mining can be used to provide a better overall understanding of targeted consumers through profiling and segmentation based on customer behavior and publicly available census data, including demographic and lifestyle data. This intelligence is central to building successful one-to-one marketing relationships with consumers.
In conclusion, data mining can give teleservices providers a powerful strategic and financial tool to deliver exceptional value to marketers. It gives telemarketers an opportunity to provide a service that is value-driven vs. price-driven. Data mining builds the foundation for a more strategic business partnership with the marketer, which is ultimately more valuable. In this way, integrating data mining into teleservices provider offerings will help turn serious business challenges into significant business opportunities.