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Predicting the future with marketing analytics

SIC 'EM!

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Sometimes the modeling steered away from company firmagraphics entirely, and looked instead at employee makeup. Somma said he worked to identify those companies whose staffers were most likely to take advantage of wellness programs, a value-added service that Independent Health offers its customers. “We'd identify these companies, turn them over to our wellness teams, and say, "Sic "em!' ” Somma said. Independent Health's results were strong. The company spent about $500,000 in assembling its prospecting database, and another $30,000 on the IBM SPSS software. From the company's initial use of its 2-by-2 matrix of look-alike companies with high potential for profitability, ultimate profitability was 3.5 times the company's normal average, Somma said. And based on the upfront investment, the return is running at 4:1, earning $4 for every $1 spent, he said. “And if we don't buy anything else from SPSS, but just renew our license, we'll be in great shape going forward,” he said. Somma believes that predictive tools, although powerful, can't solve everything. “Don't think that just because it's a computer, and an elegant algorithm, it will produce correct results,” Somma said. “You still need good analytical understanding and intervention.” M
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