Mailing Decisions in the Catalog Sales Industry

Bitran, Gabriel R.; Mondschein, Susana

doi:10.1287/mnsc.42.9.1364

Cited by 158 publications

(98 citation statements)

References 4 publications

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“…This is achieved by equating the marginal cost of sending the catalogs to the marginal expected revenue from the list. Bitran and Mondschein (1996) study list selection decisions in an environment where budget constraints force the company to divide resources between sending costs and inventory costs. Further, Gönül and Shi (1998) make consumer response endogenous by linking the purchase decision to past actions.…”

Section: Background and Motivationmentioning

confidence: 99%

An empirical investigation of the impact of communication timing on customer equity

Drèze

Bonfrer

2008

Journal of Interactive Marketing

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This research examines the impact of communication frequency on customer retention and spending and thus,ultimately,on a firm's Customer Equity (CE). We conduct an empirical study in the context of permissionbased e-mail marketing in the entertainment industry and find that intercommunication timing has a dramatic impact on customer behavior. Message scheduling affects both attrition and the customer response and thus has a critical impact on the value of one's customer base. The impact of intercontact duration is asymmetric in that too long intercommunication time is less problematic than too short intercommunication time. An Empirical Investigation of the Impact of Communication Timing on Customer Equity AbstractThe marketing literature has acknowledged the importance of Customer Equity (CE) as a benchmark for marketing performance. In this paper, we are interested in understanding the impact of communication frequency on customer retention and spending and thus, ultimately, on a firm's CE. An empirical study of this impact is conducted in the context of permission-based email marketing in the entertainment industry.We find that inter-communication time has a dramatic impact on customer behavior. It affects both attrition and consumer surplus and thus has a critical impact on the value of a customer database. This impact is asymmetric; managers are advised to err on the side of longer rather than shorter inter-communication times.

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Section: Background and Motivationmentioning

confidence: 99%

An empirical investigation of the impact of communication timing on customer equity

Drèze

Bonfrer

2008

Journal of Interactive Marketing

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“…Methodologically, our work is especially related to several papers that utilize dynamic programming (DP) models to create optimal catalog-mailing policies (Gonul andShi 1998, Bitran andMondschein 1995). 1 In these models, customers are classified according to transaction history measures.…”

Section: Introductionmentioning

confidence: 99%

Research Note: A Dynamic Programming Approach to Customer Relationship Pricing

Lewis

2005

Management Science

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T he practice of offering discounts to prospective customers represents a rudimentary form of using transaction history measures to customize the marketing mix. Furthermore, the proliferation of powerful customer relationship management (CRM) systems is providing the data and the communications channels necessary to extend this type of pricing strategy into true dynamic marketing policies that adjust pricing as customer relationships evolve. In this paper, we describe a dynamic programming-based approach to creating optimal relationship pricing policies. The methodology has two main components. The first component is a latent class logit model that is used to model customer buying behavior. The second component is a dynamic optimization procedure that computes profit-maximizing price paths. The methodology is illustrated using subscriber data provided by a large metropolitan newspaper.The empirical results provide support for the common managerial practice of offering discounts to new customers. However, in contrast to current practice, the results suggest the use of a series of decreasing discounts based on the length of customer tenure rather than a single steep discount for first-time purchasers. The dynamic programming (DP) methodology also represents an important approach to calculating customer value (CV). Specifically, the DP framework allows the calculation of CV to be an explicit function of marketing policies and customer status. As such, this method for calculating CV accounts for the value of managerial flexibility and improves upon existing methods that do not model revenue and attrition rates as functions of marketing variables.

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“…The best known and best used models 10 are RFM or the closely related FRAT model, which extends RFM to include product type. Another aggregated datum is the r coefficient (r ϭ 1/CV 2 ).…”

Section: Data Quality Managementmentioning

confidence: 99%

From customer data to value: What is lacking in the information chain?

Crié

Micheaux

2006

J Database Mark Cust Strategy Manag

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In theory, this enhanced customer knowledge should produce improved business results. In practice, however, many companies are still at the data storing and exploratory stages and have not seen the tangible benefits of the transformation of an organisation from being product-centric to being customer-centric, which CRM should be forging. From the customer viewpoint, increasing expectations for personal recognition and improved quality of service are not fulfilled, causing dissatisfaction. From the firm's perspective, the struggle to realize profits from CRM investments is still in progress.The authors believe it is still early in the process. Companies will change in order to eventually dominate this new INTRODUCTIONIn the nearly 20 years of practicesince the first customer databases were built by banks, credit and catalogue sales companies in the mid 1980s -businesses have matured in terms of their knowledge and expertise in collecting, interpreting and using data for decision making and commercial action. Today, customer knowledge is considered to be one of a firm's most valuable resources. The explosion in direct channels to the customer, such as e-business, call centres and loyalty card programmes, has produced huge volumes of data, which are being channelled into customer relationship management (CRM) databases for use in targeted relationship marketing and statistical modelling of consumer behaviour. Andrea Micheauxis an associate director at Analyse Informatique des Donné es, a company that specialises in database marketing. She is also an associate professor at University Paris 1, where she teaches both relationship marketing and customer relationship management.Abstract Based on literature and practical experience, the authors define and discuss the customer data to value information chain. From data collection, through data quality management, performance metrics and knowledge management, optimising the various links in the chain leads to superior customer service and more profitable customer relationship management. Various current weaknesses are identified and recommendations made for improvement.

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Mailing Decisions in the Catalog Sales Industry

Cited by 158 publications

References 4 publications

An empirical investigation of the impact of communication timing on customer equity

An empirical investigation of the impact of communication timing on customer equity

Research Note: A Dynamic Programming Approach to Customer Relationship Pricing

From customer data to value: What is lacking in the information chain?

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