If you’ve started using a “look-alike” prospecting model based on the profile of your best customers, congratulations. You’re now ready to advance to a scoring prospecting model. According to Bill Singleton, president of Algonquin, IL-based Singleton Marketing, a scoring model can further improve your sales and reduce your costs.
Also known as a regression model, a scoring model uses independent variables, such as household income or number of employees in a business, to determine which combination of attributes will define your best prospects. You use the profile of your best customers and whatever enhancements you can apply to your customers to run a regression analysis, Singleton says. What’s more, you don’t need someone on staff full-time to do this; you can bring in a consultant or a consulting firm once a buying cycle or once a year.
In creating the scoring model, the analyst will test the different variables to see which combinations of them produce the best approximation of your sales by customer. You can then apply the “weights” from the resulting equation to a prospecting database that has the same overlaid factors. The service bureau that hosts the prospect file can use your unique set of weights to score the database. You will be able to use the scored file to fill out your prospecting plan, starting with the highest score and going in descending order until the score gets too low or you reach your mail quantity.
By using this sort of model, Singleton says, you should achieve higher response rates and reap greater sales. And because you are mailing to scored prospects instead of using a random nth-name approach to the prospecting file you are likely to save on list rental, printing, and postage costs by cutting the number of prospects you have to mail to achieve or exceed your previous results.