Direct Mailing Decisions for a Dutch Fundraiser
AbstractDirect marketing firms want to transfer their message as efficientlyas possible in order to obtain a profitable long-term relationshipwith individual customers. Much attention has been paid to addressselection of existing customers and on identifying new profitableprospects. Less attention has been paid to the optimal frequency ofthe contacts with customers. We provide a decision support system thathelps the direct mailer to determine mailing frequency for activecustomers. The system observes the mailing pattern of these customersin terms of the well known R(ecency), F(requency) and M(onetary)variables. The underlying model is based on an optimization model forthe frequency of direct mailings. The system provides the directmailer with tools to define preferred response behavior and advisesthe direct mailer on the mailing strategy that will steer thecustomers towards this preferred response behavior.
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Bibliographic InfoPaper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2002-111-LIS.
Date of creation: 02 Dec 2002
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Web page: http://www.erim.eur.nl/
decision support system; direct marketing; Markov decision process;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-09 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonker, J-J. & Piersma, N. & Poel, D. van den, 2002. "Joint optimization of customer segmentation and marketing policy to maximize long-term profitability," Econometric Institute Report EI 2002-18, Erasmus University Rotterdam, Econometric Institute.
- Füsun Gönül & Meng Ze Shi, 1998. "Optimal Mailing of Catalogs: A New Methodology Using Estimable Structural Dynamic Programming Models," Management Science, INFORMS, vol. 44(9), pages 1249-1262, September.
- J.-J. Jonker & N. Piersma & D. Van Den Poel, 2003. "Joint Optimization of Customer Segmentation and Marketing Policy to Maximize Long-Term Profitability," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/214, Ghent University, Faculty of Economics and Business Administration.
- Piersma, N. & Jonker, J-J., 2000. "Determining the direct mailing frequency with dynamic stochastic programming," Econometric Institute Report EI 2000-34/A, Erasmus University Rotterdam, Econometric Institute.
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