Behavioral targeting can be magic bullet to drive profit

If you could identify which names in your next mailing are likely to become high lifetime value customers — and which aren’t — would you change your deployment strategy? ?That’s the idea behind optimizing campaigns through list scoring. Accessing a large source of behavioral performance data with the right predictive model can have a dramatic effect on mail campaign profitability. ?

The trick is to model consumers for desirable behaviors, such as “likely to buy multiple times.” With high mailing costs, generating one-time response is not enough. Behavioral segmentation strategies let marketers identify consumers who will develop long-term, continuous-buying relationships.?

A predictive model targeting behaviors that drive profit — not those that drive response — can let you redirect outbound campaigns toward higher lifetime value customers.?

Creating a behavioral insight generator does not require dramatic changes in planning, costs or scheduling. Experienced marketers have detailed histories on a large number of lists, demographic segments and “recency, frequency and monetary” variables. Most marketers already deploy models designed to identify “look-alike” or “responder” types. ?

Creating a model that targets profitable behavior simply requires different data and a new mindset. It means sharing P+L metrics with the model development team so they can identify profitable behaviors. Armed with this custom-developed model, marketers can make profit-driven decisions before a single envelope hits the printer, including: ?

• Which names to promote and which to suppress ?

• What offer(s) to make — a higher price point could mean more revenue from high-ranking customers, or a more valuable premium could stimulate response?

• Find more consumers to market to — many marketers increase their mail-able universes by targeting top-performing names within expansion segments and marginal list sources?

Thinking in terms of behavior versus response is helping sophisticated marketers generate higher rates of net profit on campaigns — increases of 20% and more are not uncommon. Marketers who are willing to think differently about how they target consumers will be driving innovation within their multichannel efforts and reaping the rewards.

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