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Direct Mailing Decisions for a Dutch Fundraiser

Author

Listed:
  • Jonker, J.-J.
  • Piersma, N.
  • Potharst, R.

Abstract

Direct marketing firms want to transfer their message as efficiently as possible in order to obtain a profitable long-term relationship with individual customers. Much attention has been paid to address selection of existing customers and on identifying new profitable prospects. Less attention has been paid to the optimal frequency of the contacts with customers. We provide a decision support system that helps the direct mailer to determine mailing frequency for active customers. The system observes the mailing pattern of these customers in terms of the well known R(ecency), F(requency) and M(onetary) variables. The underlying model is based on an optimization model for the frequency of direct mailings. The system provides the direct mailer with tools to define preferred response behavior and advises the direct mailer on the mailing strategy that will steer the customers towards this preferred response behavior.

Suggested Citation

  • Jonker, J.-J. & Piersma, N. & Potharst, R., 2002. "Direct Mailing Decisions for a Dutch Fundraiser," ERIM Report Series Research in Management ERS-2002-111-LIS, 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.
    • Handle: RePEc:ems:eureri:260
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    References listed on IDEAS

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    1. 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.
    2. Potharst, R. & Kaymak, U. & Pijls, W.H.L.M., 2001. "Neural Networks for Target Selection in Direct Marketing," ERIM Report Series Research in Management ERS-2001-14-LIS, 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.
    3. Jan Roelf Bult & Tom Wansbeek, 1995. "Optimal Selection for Direct Mail," Marketing Science, INFORMS, vol. 14(4), pages 378-394.
    4. Piersma, N. & Jonker, J.-J., 2000. "Determining the direct mailing frequency with dynamic stochastic programming," Econometric Institute Research Papers EI 2000-34/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    5. Jonker, J.-J. & Piersma, N. & Van den Poel, D., 2002. "Joint optimization of customer segmentation and marketing policy to maximize long-term profitability," Econometric Institute Research Papers EI 2002-18, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
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    More about this item

    Keywords

    Markov decision process; decision support system; direct marketing;
    All these keywords.

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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