How to target the bull's-eye

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The Independent Online
As anyone who sifts through their junk mail knows, marketing has become more sophisticated in recent years. Yes, householders are still inundated with financial services advertising, but young couples are less likely than they once were to receive brochures for cruise holidays aimed at the retired.

Even so, most would like to see response rates go up. One way around this is to build a "response scorecard", which is much like the individual credit scoring that credit-card suppliers and others employ to assess the risk of taking on customers.

The scorecards, which essentially statistically predict the likelihood of a target customer responding to an offer, are sophisticated software systems. They combine historical information on people who have previously responded to mailings with geodemographic and lifestyle data to select similarly inclined people from among the rest of the population. The problem is, though, it costs between pounds 20,000 and pounds 50,000 to build just one response scorecard. As a result, most marketers can only afford to build one for each of their product lines each year when, in fact, markets are often moving so fast that the exercise should be repeated, if not monthly, then at least quarterly.

West Country-based organisation The Database Group believes it has found the answer in Dynamic Modelling, a concept launched at the London International Direct Marketing Fair being held at Wembley this week. Instead of having to make a huge outlay each year for something that may be quickly obsolete, marketers will be able to plug into a database that is updated as often as weekly. And not only is it more accurate, it is a lot cheaper, claims sales and marketing director Neal Muranyi, who has devised the system in conjunction with Macon Solutions, marketing software specialists. Rather than have to submit to a huge outlay each year, companies will pay an initial fee of a few thousand pounds and then pay as they go, with charges dependent on the number of records selected.

The idea, explains Mr Muranyi, was to come up with a solution that enabled marketers to feed what they had learnt from a campaign into the next one much more quickly than is possible now. With competition in most markets becoming increasingly intense, this is critically important because it enables organisations to reduce promotional lead times dramatically. In particular it makes them much more able to come up with a quick response to initiatives by rivals.

Moreover, by reducing the cost, the group, which collects data from a variety of sources, makes the concept available to the smaller companies that previously might not have had access to this sort of material.

Pointing out that the rapid increases in computer power over recent years had made the concept possible, he added: "We've all known about carburettors on cars for a while. This is like fuel injection."