Modeling is a powerful tool that is worth considering when determining how best to spend your marketing dollar.  At its simplest, modeling looks for patterns in data to predict future behavior.  That data could be past behavior.  If someone bought diapers last week, it is very likely they will buy them again this week.  It could also include demographics such as age and gender or, in a B2B context firmographics, the number of employees and annual sales volume.  Attitudinal information, such as willingness to purchase a product, could also be used in a model.  The power of modeling comes from the fact that it weighs all of the factors and results in a unique algorithm that predicts future behavior.  Instead of the usual “spray and pray” approach, modeling enables you to focus your dollars where they will have the most effect.

Two articles in the Wall Street Journal last week offered real life examples of how models can solve business problems.  I have seen clients use attrition models and proportional hazard models to determine which customers are likely to leave.  Google is building an attrition model to identify which of its employees are most likely to leave the company for another opportunity.  Presumably Google will target those employees most likely to leave and be able to retain valuable talent that might otherwise walk out the door.

Chrysler’s digital agency has designed a media modeling system according to the Wall Street Journal.  It sounds like a marketing mix model and is being used to allocate Chrysler’s marketing dollars.  At a basic level, this model tells Chrysler how much money needs to be spent on marketing to drive a certain number of vehicle sales based on the web traffic generated.  By monitoring online activity and tying it to their marketing campaigns, Chrysler has determined how many web visits translate into sales.  The media modeling system, including enhancements based on the ongoing performance of television advertisements, has helped Chrysler determine how to structure their marketing campaign and tweak marketing in real time to drive results.

These two examples may not fit your exact situation but they highlight the power and value of modeling.

The print edition of the Wall Street Journal has introduced a daily sports page and when I say sports page, I mean it is just a page.  It seems like an odd choice, introducing more sports coverage to a business oriented newspaper.  However, it may be an attempt to increase advertising revenue and grow the subscriber base, similar to the earlier introduction of the Weekend Journal.  

The sports coverage is supposed to be analytical, high-level and statistical.  That does not mean it is dry.  I laughed out loud when I read this excerpt from yesterdays’ journal, written by Bernie Lincicome.

“The visual highlight of the week was Henrik Stenson, a particularly tidy sort who avoided splashing mud on himself by taking off nearly all of his clothes.  It takes a lot to upstage Tiger Woods, but a Swede golfing in his skivvies in a water hazard will do it every time.”

In the Wall Street Journal recently, Ann Patchett wrote “recommend the books you like, even to strangers.” So I am recommending “Then We Came to the End” by Joshua Ferris. Before you buy it, let me tell you that I enjoy gallows humor. This book is about an ad agency in Chicago in the midst of a business downturn.  Sound familiar? The book may resonate with its painful, incremental lay-offs and staff trying their best to keep busy and desperate to look good at their jobs.

I laughed out loud at the controversy over an office chair. When someone left the agency, his chair was appropriated. Eventually, the office manager tried to retrieve the chair but by then no one knew who actually had the original chair, given the many rounds of lay-offs. It was even funnier after I received an e-mail at work asking who had taken a former co-worker’s chair. This was followed by a second e-mail stating that the chair recently placed in her cube was a poor substitute and not the real chair. In this case, life imitates art.

Reading provides a portal into another person’s experience and enables us to “feel empathy for people we’ve never met”, as Ann Patchett so simply and elegantly stated. Empathy is needed in these difficult times as is a good laugh.