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25. How probabilistic is the Religence Framework? Our profit matrix is based on historical data so there's no probability involved there. With the profit matrix, the challenge at the beginning is in how to allocate costs and drill down only where it makes economic sense and where it will lead to a better decision on where to focus for profit improvement. Once we have variable cost data from the operational CRI tracking system tied to individual customers to update the profit matrix, the numbers are better. The strategy decision model used in planning can be totally probabilistic. We use Monte Carlo simulations in our model to take advantage of the range in your estimates. When we have the cost-per-contact results from the operational CRI tracking system, that probability range gets tighter. As far as the interactions themselves and predicting what is likely to happen next, it will take either a sufficient quantity of existing data that can be calibrated to the Religence Framework or some time to collect enough new data using the operational CRI tracking system. Companies who are doing predictive modeling already will have a head start in using the Religence Framework—not just for predicting the interaction set, but for putting a relative value on the interactions for their relationship building potential. For companies who will be starting fresh, we have an interactions database, based on 30 years of experience in sales and marketing to draw upon. In the Religence Framework each interaction has a scored relative value, which we call Relationship Value, based on the interaction's impact and relationship enhancement capabilities. For example, the value of an email is quite different from a special event. The value of the first direct mail piece in a series is different from the seventh or the tenth. Scoring can become sophisticated with large amounts of data. Typically in business-to-business, there hasn't been enough relevant data for probabilistic analysis. With the Religence Framework collecting this data stream, there will be sufficient data over time. In fact, with time the relative Relationship Values will be near absolute, again tightening the range. For more about Relationship Value, please see What is the context
for customer relationship metrics? and How can Relationship Value
be used? Or take a look at Chapter Four in our CEO's new book Customer
Relationship Intelligence: A Breakthrough Way to Measure and Manage
Sales and Marketing. |
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