The marketing cube: RESULTS

The marketing cube: RESULTS

The combination of the cube and the next most logical (NLP) product model has produced some fairly robust results. A recent example involves an $18bn bank which was the result of a merger of several smaller organisations. As can be expected, each of these smaller banks existed with unique sales and marketing cultures.

An objective of these sorts of combinations is to leverage the customer bases and to offer, through cross-selling, the optimal products and services to each and every customer. Coinciding with this strategy was the bank’s concern that existing customers might defect.

Enter the cube. The cube and NLP were used to draw existing ‘clients’ as they are called into local branches. Bank officers were initially sceptical as to the value of the system; it is difficult to shake old habits. The author worked closely with them, and in order to bolster their confidence concerning the use of the system, they were asked to enumerate the characteristics of ‘clients’ that they wanted to rescue, and then hypothesise the product they would want to sell these individuals. The results were compared to their hunches. The customers that they selected as being most vulnerable were a tiny subset of what the models chose. They were impressed. Concerning NLP, while they were able to articulate why they would recommend a certain product, they were unable to develop rigorous rules for next product selection.

After 13 months of using the cube, the following results emerged:

—       A total of 12 per cent fewer customers diminished balances as compared to a control group

—       Response rates to NLP programmes tripled over previous campaigns

—       Attrition declined by 141 basis points

—       Revenue attrition was reduced by 17.8 per cent.

Many marketers feel that other tools such as lifetime value may provide better segmentation and the author agrees. But developing lifetime value systems is more complex, takes more time and frequently data necessary to support development of the associated models are not available. What is most instructive about the three- dimension cube process described here is its simplicity. More intricate systems can be constructed, but they do not always perform better.

A top military strategist once noted that devising the simplest approach to surrounding the enemy might be the most effective. This makes good sense for marketers as well.

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