Every step we take tells a larger story. ALC advanced analytics and data modeling help you make sense out of these stories, turning BIG data into SMART data.
In these times of fierce competition, lookalike products, and fickle consumer loyalties, smart marketers understand that their success is dependent on how well they understand—and even anticipate—their customers’ and prospects’ wants and needs through advanced analytics and data modeling.
The Efficient Frontier, ALC’s proprietary analytic and optimization platform, enables marketers to profile and model their marketing data to gain a 360-degree profile of their customers and prime prospects. The Efficient Frontier includes attributes that incorporate:
- Demographic Data – Describes who an individual is, as defined by characteristics like age, income, marital status, number and ages of children, ethnicity, type and value of home, and more
- Psychographic Data – Describes how an individual lives, shining the spotlight on their unique lifestyle. What are their interests and hobbies? What kind of music do they listen to? Which books do they read? How do they vote? Where do they go on vacation? ALC was an early pioneer in the gathering, organization, and interpretation of this type of lifestyle data, and continues to be a leader in the field
- Attitudinal Data – Would you be surprised to learn that, during a recent study, we found that optimists are 56% more likely to make a purchase than pessimists? Or that a person’s attitude about wealth is far more predictive of his or her consumer behavior than is actual wealth? We were too. Leveraging attitudinal data allows you to take advantage of opportunities just like this one—opportunities you had no idea existed
- Transactional Data – Describes how an individual spends his or her money. Hardly anything is more predictive of a person’s future spending patterns than his or her spending history. Transactional data gives us this historical perspective
- Online Behavioral Data – The new frontier in the world of data marketing, digital data gives you real-time information about the online behavior of your customers and prospects. What sites are they visiting, and what pages are they viewing? What does this say about their intent to buy?
And that’s not all. The Efficient Frontier enables complex list segmentation analysis for maximizing direct mail campaign performance. And for multi-channel marketers, it offers the industry’s most advanced channel optimization platform, specifically geared to enable you to derive the maximum sales output per dollar of aggregate advertising or direct mail spend, based on your actual results. The process combines multiple predictive models (developed with your data) into an econometric marketing mix model, then simulates thousands of forecasts to find the optimal mix.
The Efficient Frontier
An ALC Smart Data Solution
Marketers have more options than ever to reach consumers. Direct Mail, Email, Mobile, Online Display, Search, SEO, TV, Radio, Outdoor, Social, Affiliates, PPC, Lead Generators, Content and the list goes on. What’s more, they have more data than ever to make informed decisions. But sometimes the abundance of data can be paralyzing, rather than empowering.
So how do you know what’s really working? How do you account for cross-channel synergies that exist? How do you determine your optimum new customer acquisition budget to achieve your break-even cost per sale? The optimal marketing mix to maximize revenue? To drive traffic to your site?
And how can you orchestrate your best list mix for your direct mail or email campaigns.
With The Efficient Frontier, we can help you with all of this and guide you through the process.
What is The Efficient Frontier?
The Efficient Frontier is ALC’s proprietary methodology for multi-channel marketing optimization. It also enables complex list segmentation analysis for maximizing direct mail campaign performance.
Specifically, it’s a process of deriving the maximum sales output per dollar of aggregate advertising or direct mail spend, based on your actual results. The process combines multiple predictive models (developed with your data) into an econometric marketing mix model, then simulates thousands of forecasts to find the optimal mix.
How does it work?
Unlike typical media mix analysis, our goal is not to maximize your brand awareness through reach and frequency targets. We help you to maximize sales. Seasonality, short-term promotions, ad copy, list selection models, competitor activity, and many other factors play a role in the results you achieve. And all of these factors need to be taken into account.
After we develop predictive models for each marketing channel or data source, we combine those models into an aggregate econometric model, which can be simulated. The aggregated model includes pricing assumptions for each marketing channel or data source.
Simulations allow us to identify the leading edge of outcomes (highest sales outcomes) at various levels of marketing spend. We typically run tens of thousands of simulations to develop this leading edge, which we call “The Efficient Frontier.” Once this is known, you have a recipe for optimizing marketing spend, based on what’s known about your past results.
The optimal media mix evolves as your budget grows
A better attribution solution.
Attribution is a constant challenge for multi-channel marketers. We use predictive models to identify statistically significant relationships among your marketing campaigns. This allows us to measure cross-channel effects (aka spillover) among your marketing efforts. Quantifying spillover allows us to more holistically measure the performance of each channel.
A prime example of spillover is how offline channels like direct mail can drive a spike in online channels like branded paid search or organic web traffic shortly after the campaign launch. Without regression-based attribution (or highly structured in-market tests), the impact direct mail has on paid search will remain unknown, and leave you with a false read of what’s driving results.
How is this a better approach?
This approach provides several benefits to traditional buy management and direct marketing optimization: 1) it’s optimized on sales, not something else that should lead to sales, 2) it provides a growth plan with specific tactics, 3) it provides a statistically valid way to measure multi-channel attribution, 4) it’s a proven method.
What is the final deliverable?
After the development is complete, we’ll walk you through our findings and present recommendations for next steps. We’ll be able to measure baselines sales and your paid vs earned media split. We can measure your marginal cost per sale, and marketing cost as a percentage of lifetime revenue.
Find out how we can develop the tools and algorithms needed to make informed decisions to grow your business, improve customer value, and increase your marketing ROI.
To Learn about The Efficient Frontier, Contact:
Executive Vice President