ASA ModelMAXREVIEWER: Eric Jensema, senior marketing analyst at DEMCO, Inc.

BACKGROUND: DEMCO, Inc., is a multichannel direct marketer of library supplies and furniture. DEMCO's primary sales channels include catalog and Web marketing. DEMCO has been supporting libraries with its products and services for 100 years, carrying more than 20 different product lines and 50,000+ items.

PLATFORMS: DEMCO has ASA (Advanced Software Applications) ModelMAX currently deployed on a Windows XP machine interacting with data from our AS/400 marketing databases.

PROBLEM SOLVED: As part of our broader CRM strategic initiative, we were seeking to optimize database marketing campaigns, precisely segment customers and gain deeper understanding of customer purchasing behavior. We wanted to break away from older RFM selection criteria and leverage more sophisticated predictive modeling and clustering techniques. It was essential to find a software solution that was both end-user friendly and that automated the time-consuming aspects of modeling and clustering. Using ModelMAX, we were able to jump-start our modeling programs to help uncover the wealth of information that exists within our database. Our first production response model outperformed RFM by more than 25%.

PRODUCT FUNCTIONALITY: ModelMAX offers a spectrum of analytical capabilities that include response modeling, value (continuous) modeling, clustering segmentation and scoring. With very easy-to-use clustering functionality, we are able to dissect our customer file to better target unique customer groups. ModelMAX allows the user to interactively define the number of clusters to be formed and provides a summary of information for post-cluster analysis. This helped optimize the distinctiveness of each segment. Cluster identification can also easily be assigned back to our customer database for use in other marketing programs. The predictive modeling capabilities of ModelMAX use a combination of neural networking and statistical analysis to identify both linear and nonlinear relationships among variables. Whether creating a response or performance model, the program automatically identifies outliers, accounts for collinearity between variables and throws out give-away variables. ModelMAX allows you to easily run and rerun models based on the user's interpretation of the output. Post-model analysis includes such tools as gains tables, individual variable analysis and decision-tree analysis.

STRENGTHS: The strengths of ModelMAX are its ease of use including a step-by-step tabbed approach, powerful automated modeling and clustering methodologies, and the ability to efficiently analyze and implement results back to your database. ModelMAX offers a range of modeling techniques and analysis that make it easy to develop a marketing plan based on the information in your database.

WEAKNESSES: ModelMAX is not an ideal data preparation tool, although it does contain limited data preparation functionality.

SELECTION CRITERIA: DEMCO was looking to implement modeling capabilities with a program that offered both efficiency and a straightforward approach. We wanted to have access to a variety of modeling techniques that could improve mailing campaigns and give us deeper customer insight. The ability to create quality models without laboring through painstaking processes such as variable selection, model training and model validation is what sets ModelMAX apart from other modeling solutions.

DELIVERABLES: ModelMAX produces predictive scoring models that can be used to rank expected customer response based on model results. We use the scores to determine how deep we mail into our database, to determine whom to mail and to segment our customers for targeted marketing. ModelMAX also offers reports and analysis, including integration to Excel, which makes it easy to explain the impact of modeling on campaign results.

VENDOR SUPPORT: ASA's client support has delivered above and beyond all expectations. Whether the questions are tactical or strategic, they are always willing to spend the time to help DEMCO make intelligent decisions.

DOCUMENTATION: ModelMAX contains complete user documentation (available online as well). The users' guide is a great reference tool for both the software and the various modeling techniques available.


ModelMAX
ASA Corp.
3117 Washington Pike
Bridgeville, PA 15017
412-220-9300
www.asacorp.com

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