Mathematical Marketing

Definition:
Mathematical Marketing is the process of marketing to existing customers based on a scientific understanding of how past customer behavior predicts future purchases.

Comparison:
Marketing naturally divides into two different tasks, depending on customer type:

The typical elements of Search Engine Marketing (SEM) include keywords, ad impressions, click-through, search engine optimization, and web analytics.

Elements of Mathematical Marketing:
Similarly, there is a set of elements for Mathematical Marketing (MM):
Behavioral tracking
Transaction records are the input data
Predictive analytics
Mathematical algorithms calculate purchase propensities
Predicts which customers are going to buy next, what they are likely to buy, and which customers are likely to defect
Behavioral targeting
Algorithms show marketers how to make the right offer to the right customer at the right time
What-if analysis
Predictive tools enable manipulation of target lists to achieve the best outcome
Testing
Expert systems for automated testing to determine best target groups and offers
Results measurement
Determine ROI to iterate methods to achieve maximum revenue
“If you can’t measure it, you can’t manage it.” –Drucker

Positioning:

Longbow is the first easy-to-use and affordable tool to apply all the new techniques of mathematical marketing.