Loyalty Builders Granted Software Patent

March 20, 2013 (Portsmouth, New Hampshire) – Mark Klein, Founder and CEO, and Brian Jenkins, VP and Chief Technical Officer, have been issued US Patent 8375254 for a “Factorial Design Expert System.” The patent has been assigned to Loyalty Builders, Inc.

Loyalty Builders, founded in 1999, is a leading voice in the fast-growing field of customer analytics that help direct marketers get more revenue from their existing customers.

Marketers have tested the effectiveness of campaigns for many years. Most commonly they have used a simple A/B split with one ‘factor’ at two levels, the A version and the B version. The mathematical underpinnings for (and advantages of) using two or more factors have been understood for more than a century. But when multiple factors are used, factorial tests require complicated mathematical calculations.

Loyalty Builders’ patent covers an Expert System that automates the process of testing multiple factors. “The objective of the system is to enable relatively unsophisticated experimenters (marketers) to design and execute effective experiments (campaigns) just by answering questions posed by the system,” according to the filing.

“Testing gets tricky when we want to learn the effect of multiple factors,” says Klein. “So testers have usually resorted to doing multiple A/B tests. It works, but it can be quite time consuming, not to mention expensive. In reality tests of multiple factors often just don’t get done.”

Now, Loyalty Builders predicts their invention will make multi-variate testing a growing choice for marketers. The Expert System, as described in the patent, is built in “Design, Execute and Evaluate” phases to help the user develop a marketing campaign (or other experiment) in which more than two factors are tested simultaneously – “all with the goal of discovering what values for which factors will yield the optimum response from the subjects.”

In the Design phase the user is asked a series of questions to determine what is to be tested, how many factors are involved, desired size of the test population, and information about any groups of customers that should be included or excluded.

In the Execution phase of the system each member of the target group receives email or direct mail – typically with an offer to buy some product or service.

In the Evaluation phase, transaction data is returned to the system where the transactions are analyzed according to the formulae in the invention. Results are presented in the form of a table and bar chart.

While the Expert System is for use in marketing experiments that include testing and targeting of customers or campaign offers, the concepts permit extension of the system to many other fields and types of experiments, according to the patent.

About Loyalty Builders

Loyalty Builders was founded in 1999 to help businesses gain more revenue from their existing customers. The company’s customer analytics solution based on customer transaction data gives direct marketers actionable and individualized customer insight. This leads to more efficient use of marketing dollars, higher response and retention rates, and increases in revenue.

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