Managing Uncertainty

It is not about intuition. It is about what you do with it.

I fear that my last blog post about heuristics missed the mark. I received a few comments that made me realize that perhaps I suggested that having intuition or experience was a necessary part of relationship marketing. Of course it is…and many helped point that out.

What I was trying to convey was that while “art & science” is required to build effective relationship marketing campaigns, it is more than just making assumptions, having intuition, or knowledge from past experiences. You must have a process (some refer to it as the heuristic method) in which to take your historical, and sometimes qualitative, data and apply it into something meaningful and tangible. The Peyton Manning example was an attempt to highlight the method, not the intuition. My guess is that Manning uses some kind of checklist as he surveys the defensive scheme in front of him. Maybe something like:

• Is it a blitz package?
• Where is the Strong Safety?
• Are they playing zone or man-to-man?
• What have they done in this situation before?
• Etc…

Manning takes this information, adds in the “scientific” data (down, distance, score…), and gets the answer he is looking for. His intuition and knowledge is put through a process and aids in determining the right execution strategy.

We have all done this at one point or another. Think about buying a house or choosing a university. Every time that I have purchased a house, my wife and I have created a list of “must-haves” and “nice-to-haves”. We then weight their individual importance and grade each home on each of the selection criteria. There are certainly some things that are absolutes like the price range or number of bedrooms. But there are also more subjective criteria like location, traffic patterns, quality of schools, or number of kids in the neighborhood. Based on our intuition and past experiences we can make a reasonable assessment of each of these less tangible criteria. The results are not perfect, but close enough because we trust our heuristic method.

Anyone that has developed and reviewed an RFP has likely used some kind of heuristic method.

Let’s take a look at Relationship Marketing. In most cases we have absolute data (revenue, profitability, growth, rate of growth, share of wallet, etc). This is data that cannot be disputed. We also have less tangible information. Our intuition may tell us that the relationship is still strong, even though the absolute data indicates otherwise…or visa-versa. The challenge is then twofold:

• Can we trust or intuition?
• How do we apply those heuristics into a process that will help us with managing that relationship?

The art of relationship marketing (heuristics) is applied to the science (loyalty scoring, or whatever measurement you use) to get as close to perfect as possible. This is what I mean by saying that the art and science are not mutually exclusive…they have to go together.

So, experience and intuition matter, but not nearly as much as what you do with it.