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5 reasons to shift to outcome-based marketing

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10 min read
A man looking at an iPad with email icons around it.

Key Takeaways

In the ever-evolving world of marketing, success often hinges on having a clear vision of what you want to achieve. Yet, despite the mantra of 'begin with the end in mind', many marketers struggle to optimize their tactics to drive the desired outcomes. Marketers are often limited by:

  • The infinite combinations of channels, creatives, timings, and target audiences  
  • The available budget and resources for testing and optimization
  • Inability to attribute what marketing activities are driving incremental results
  • The complexity of integrating multiple martech tools
  • The need for intensive manual processing of data requests, list pulls, and PCAs  

These challenges mean that marketers have to rely on mass or segment communication rather than engaging customers at the individual level. And even segment-level communication creates a lot of manual work and introduces human error. Marketers not only don’t know if the versions of their campaigns are the best possible ones (statistically speaking the probability of that is zero), but they also often don’t know if their marketing is generating incremental benefits at all. As a result, marketers are left with suboptimal results and missed opportunities for impactful customer engagement and revenue potential.

From “trial and error” to outcome-based decisioning

Why traditional campaign deployment doesn’t work

Conventional campaign deployment typically follows a linear and fixed approach. It relies on collecting and managing customer data, segmenting audiences, and sending out messages based on predetermined schedules or triggers. This approach can lack the agility and intelligence needed to drive specific outcomes. Marketers are often just shooting in the dark, resulting in:

  1. Oversimplification of customer segments. When businesses simplify their customer groups too much, it often results in limited personalization and generic messaging. It can lead to a lack of engagement and resonance with the target audience, as customers want to feel that a company understands their unique needs and preferences.
  1. Inefficient resource allocation. Businesses can end up wasting valuable resources on marketing campaigns that have low conversion rates. This misallocation of resources can have a detrimental impact on the overall effectiveness of marketing efforts and the company's bottom line.
  1. Poorly-timed communication. Missing opportunities to connect with high-value customers outside of the selected segments can result in lost sales and revenue. Effective marketing requires reaching out to customers when they are most receptive to a message or offer.
  1. Disconnected customer journey. Failing to provide a cohesive and consistent experience across various touchpoints can result in missed engagement moments and can lead to frustration and disengagement from customers.  
  1. Complex and time-consuming data analysis. Many businesses struggle to assess campaign performance and make necessary adjustments in real time as the data is disconnected and disorganized. Marketers are not able to make data-driven decisions to optimize their customer engagement and drive the desired outcomes.
Traditional campaign deployment journey

There is a solution. Outcome-based marketing: what, why & how

What is outcome-based marketing?

Outcome-based marketing is a strategic approach that starts with defining clear business objectives before designing marketing campaigns. Instead of only tracking customer interactions and engagement, it focuses on achieving specific outcomes, such as maximizing ROI, increasing customer retention, or driving conversions. 

Why outcome-based marketing?

  1. Maximize ROI: By concentrating on specific outcomes, businesses can allocate resources more effectively, ensuring a higher return on their marketing investments.
  2. Enhance customer experience: By understanding specific outcomes, marketers can tailor their campaigns to create seamless and personalized customer experiences leading to higher customer satisfaction and retention.
  3. Make data-driven decisions: Outcome-based marketing relies heavily on data analysis to measure and optimize campaigns, allowing for agile adjustments to campaigns for better results.
  4. Achieve long-term success: Outcome-based marketing is inherently geared toward achieving sustainable success. By consistently meeting or exceeding specific business outcomes, companies can grow their customers’ lifetime value and earn their loyalty.
  5. Mitigate risks: By setting specific outcome targets and continuously monitoring progress, outcome-based marketing helps businesses identify potential issues or challenges early on, reducing the likelihood of costly marketing setbacks.

How to make outcome-based marketing a reality?

Outcome-based marketing isn't a new concept, but advancements in AI and machine learning make it a reality. With the help of AI, you can evaluate countless variables, track your customer journey across channels and touchpoints, identify optimal strategies, and optimize campaigns in real time for relevant engagement that drives the desired customer behavior. At Kognitiv, we have built an AI-native outcome-based software that enables 1:1 personalization at scale, optimizing every interaction to drive your predefined business goals.

Kognitiv Ignite flips the traditional approach on its head

Kognitiv Ignite is a game-changer that flips the traditional approach to customer engagement on its head. Instead of starting with what you don't know—selecting the best audience and crafting the best message, channel, and offer—Kognitiv Ignite lets marketers define their objectives upfront. You can set a goal like selling 100,000 pairs of jeans, clearing stock, or maximizing margins, and leave the rest to our Kognition engine AI magic.  Marketers are empowered to not only meet but consistently exceed their KPIs while keeping a tight rein on their budgets. It's a radical shift from the traditional 'trial and error' approach to marketing. 

Kognitiv Ignite outcome-based user journey

How does Kognitiv Ignite work? 

Let's say you’ve been tasked with selling end-of-season overstock items from a bed & bath collection. The objective is to achieve the highest possible profit margin for these products while minimizing extensive markdowns. With Kognitiv Ignite, you set your goal to maximize the revenue of bed & bath items while capping the maximum discount at 30%. Kognitiv Ignite then chooses among available content and offers, identifies the audiences that are likely to purchase the bed & bath items with minimal discounting, and selects the best channel and timing to reach them. It also identifies customers who are willing to purchase the bad & bath items at full price without requiring any discounts, so you can use your budget where it counts. As a result, you achieve your goal of clearing overstock inventory while avoiding heavy mass counts, and you increase your sales margins.  

Kognitiv Ignite product interface.

Technology that makes outcome-based marketing a reality

AI-native software

At its core, Kognitv Ignite is powered by Kognition, a proprietary AI/ML engine, that combines hundreds of AI/ML models including lifetime value, propensity, churn, reactivation, and more to determine the next best customer engagement. Kognition evaluates millions of attributes and potential customer behaviors to identify the perfect interaction for every customer, delivering 1:1 personalized customer experiences that drive your predefined outcomes. Kognition AI/ML engine is built to automatically learn and refine its algorithms to respond to real-time data and unique business requirements.  

Data-driven attribution model

With its advanced attribution model, Kognitiv Ignite goes beyond surface-level insights, diving deep into individual customer journeys to identify precisely what drives incremental sales. Its integrated feedback loop tracks attribution and incrementality and ensures that customer engagement is optimized in real time for maximum relevance and ROI. 

Customer-level offer decisioning

With Kognitiv Ignite, you spend your budget only on what drives your bottom line. And sometimes it means doing nothing. Kognitiv Ignite distinguishes customers who require incentives, those who will purchase at full price as well as those who are simply not in their buying window. Kognitiv Ignite will also choose the right offer for the right customer, so you avoid sending mass discounts and can optimize your budget with almost surgical precision.  

Optimize every interaction to drive your goals with Kognitiv Ignite

Kognitiv Ignite – our new AI-native personalization software takes the guesswork out of customer engagement, making outcome-based marketing achievable, highly efficient, and effective. With AI-powered personalization, data-driven insights, real-time engagement, and measurable results, businesses are empowered to craft tailored experiences for their customers, accelerate their marketing results, and achieve a higher return on investment. Kognitiv Ignite is the first AI-native outcome-based personalization software that begins with your predefined goals and tailors every customer interaction to achieve those goals with maximum results.

Ready to unlock business growth?

With Kognitiv Ignite, the power to achieve your marketing goals with certainty is at your fingertips. Define your objective, and let AI do the rest.  

Scheduled your personalized demo to learn more about Kognitiv Ignite: Book a Demo.

Readyto move to 1:1 customer engagement? Let’s chat! Our suite of AI-native customer intelligence and activation softwarecan help you build deeper relationships with your customers and grow a loyalcustomer base.

  • Track, predict, and optimize your customers’ lifecycles with Kognitiv Pulse. Learn more.
  • Enable 1:1 personalization at scale with Kognitiv Ignite. Learn more.
  • Launch and manage a successful loyalty program with Kognitiv Inspire. Learn more.
  • Intelligently acquire and engage customers across paid channels with Kognitiv Amplify. Learn more.

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