How much better would your decisions be if you knew what would happen versus your best guess of what might happen? Twice as good? Five times better? Ten times better?
In Back to the Future Part II, Biff Tannen used a Grays Sports Almanac retrieved from the future to eliminate unknowns about sporting outcomes and create immeasurable power and wealth. Old Biff from the future had used some clever technology — a DeLorean time machine with a flux capacitor — to send the almanac to his younger self.
We don’t have the benefit of a flux capacitor to transport ourselves to and from the future, so we don’t have access to Biff’s secret to unerring accuracy. However, we do have proven processes and technology we can use to eliminate the unknowns so that you can increase revenue without increasing risk.
We have developed forecasters which can ingest billions of rows of historical data and turn 20/20 hindsight into 20/20 foresight. We have developed optimization routines which can evaluate hundreds of millions of alternatives to determine how customers will respond to our offers so that we can dynamically assure that we have the right price, inventory and promotions always available to meet continually changing customer needs.
A couple of examples:
- Everyone knows half of all ad spending is wasted, but nobody knows which half. For a major retailer, we analyzed 160,000 ad spots run over a three-year period. We used advanced correlation techniques to connect the ad spend with 150 million customer transactions. We were able to eliminate the unknowns around ad timing, reach and messaging.
- Using this foresight, our client was able to revise its ad strategy, which drove more volume to its 10,000 retail locations. In addition, the new ad strategy was fine-tuned to improve the mix of customers, generating greater demand from customers who were more likely to return and spend even more.
- Another perplexing unknown we eliminated for a client was the cause of customer churn. One of our clients had complained that their ongoing efforts to grow new customers were invariably offset by customer churn on the back end. We linked millions of customer transactions with the sales call activity of thousands of sales agents over the past few years.
- Using our version of a flux capacitor (bespoke forecasting & optimization engines), we were able to predict customer churn and proactively arm the sales force with strategies and tactics which reversed churn and resulted in a 27 percent increase in customers in one year.
What’s it worth to eliminate the unknowns? In our experience, for most companies, it’s worth tens or even hundreds of millions of dollars.