There is a subtle but important difference between
who are likely to buy if they are included in a campaign
people who are only likely to buy if they are included in a campaign.
It transpires that this single-word distinction is often the
difference between a strongly profitable and a severely loss-making
campaign. We have seen many cases in which moving to targeting on the
second basis (for incremental sales)
has more than doubled the extra
sales generated by a campaign. Conventional “response” models—despite
their name—target on the former basis, and have a marked tendency to
concentrate on people who would have bought anyway, thus misallocating
marketing resources by increasing costs and failing to maximize
sales. This paper discusses the use of a radical new type of
allows campaigns to be
targeted on the second basis, i.e. so as to maximize incremental sales
from cross-sell, up-sell and other sales-generation campaigns.