Building a CRM Model for
Identifying Profitable Leads:
The Genetic Contact-Profit Model
Bruce Ratner, Ph.D.
A fundamental component of a customer relationship management (CRM) strategy is determining which leads are most responsive to the initial sales call (contact), and assessing their potential revenue from future relationships (profit), namely, identifying profitable leads. For example, in the Health Care Industry where a diverse portfolio of innovative products is virtually mandated by the consumer, an effective lead generation system can be quite profitable. One wants to identify which individuals are most receptive to their salespeople and yield well-paid profits from the best-pairing of product and prospect. The lead generation system provides tactical intelligence in developing a strategy to customize the prospect-salespeople interaction, preventing the loss of profitable leads.
The purpose of this article is to introduce the new Genetic Contact-Profit (GCP) Model as the desired lead generation system. The GCP Model simultaneously addresses two important objectives facing database marketers: maximizing contact and maximizing profit. The GCP Model, which is based on the assumption-free, nonparametric genetic paradigm inspired by Darwin's Principle of Survival of the Fittest, balances the two objectives directly yielding a single score that identifies successful leads. The GCP Model is theoretically optimal, and easy to build and validate. I discuss two real CRM case studies to highlight the characteristics of the new method.
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