Sentrana
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Algorithms Do Matter, as Does the Process for Model Building
[Abstract ]
This paper approaches the scientific micromarketing opportunity through initially posing the following questions that in all likelihood would present themselves to the C-level executive suite of a company considering the benefits, costs and other considerations involved in joining the scientific marketing revolution:
a. How can a DMRO strategy make me much better than I am today?
b. What is the essence of the science that powers DMRO solutions, and how do I apply the science in a practical way best suited to the particular contours of my own organization?
Algorithms matter, as does the process for model building: Understanding the science of DMRO, the opportunities it presents and the limitations of a “catch-all” approach
In the world of vendor solutions for revenue optimization one often encounters the “our algorithm is better than the competition’s algorithm” mentality. That is not the right framework, though. The real question is: what algorithm or set of algorithms works best for a particular enterprise given the unique configuration of competitive forces and individual utility functions affecting its demand environment? Differences between competitors, even those in the same industry, can be profound or they can be finely nuanced, but in either case they are not readily addressed by a one-size-fits-all approach. On the other hand, unique solutions with enough computational power to overcome the complexity of parsing the nuances applicable to each enterprise are often economically infeasible for vendors, who after all also have a business to run. At Sentrana we approach the problem in a somewhat different way – using a combination of modeling processes and proprietary computational technology that allows unique models to be rapidly constructed for the particular set of dynamics that confront each organization.
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