This is where Florida-based Alesco Data comes in. Alesco provides data-driven solutions for direct marketers with its proprietary Machine Learning (ML) platform and Big Data assets. Alesco’s ML platform is purpose-built for marketers who use direct mail and email for new customer acquisition. By analyzing a client’s customer database, the ML platform identifies the best prospects for new customer acquisition campaigns. This approach is generating results 30 to 50 percent greater than traditional segmentation models.
Direct mail has become increasingly expensive and, correspondingly, there has been a reduction in overall response rates. The latter part holds true for email, as well. This has left direct marketers in a dilemma regarding how to best and most cost-effectively acquire new customers.
Alesco has embraced artificial intelligence and ML to identify the highest value prospects for its clients’ new customer acquisition campaigns
The company’s internal repository of data contains hundreds of millions of records of third-party prospecting data. Their team of data scientists combines clients’ data with their data repository and then utilizes the ML platform to develop algorithms which optimize prospect list selection. The algorithms can also be leveraged for up-sell, retention and reactivation campaigns.
The firm’s cost-to-value ratio is extremely high when looking at the overall cost of direct mail; a 10 percent improvement in response rate can yield as much as 75 percent increase in a client’s ROI. Since clients look for more profitability for less cost, Alesco’s ability to have a positive impact in terms of response rates and customer retention utilizing its ML platform is enormous.
Alesco Data works with a large services organization that has been in the business for over 100 years and has a highly penetrated market. The client faced challenges finding new customers and members on a cost-effective basis. The ML platform itself had a very high discriminative outcome concerning its ability to identify high-value prospects. In their initial head-to-head test with the organization’s incumbent vendor, Alesco Data was able to produce a 2.25 percent conversion rate against a 1.04 percent rate of the incumbent. This translated to a 115 percent increase in conversion for their client. “With results like this, the increase in profitability is a game changer for our clients,” concludes Theriot.