Interactions between consumers and firms : identifying the direct mail-prone consumer

Current modeling research in target marketing usually stresses the identification of profitable names for specific mailings. There is little recent research about the characteristics of typical direct mail (DM) customers. In this paper we determine the link between customers’ socio-demographic characteristics and their propensity of purchasing products through the mail. To that end, we hypothesize the existence of a latent characteristic DM-proneness, which represents a consumer’s tendency to shop via direct mail. Our model links the socio-demographics of customers to their self-reported purchase behavior through the latent DM-proneness construct in a MIMIC model. We also introduce a second latent construct, DM-information interest, which represents the desire to receive direct offers through the mail. The MIMIC model allows for testing the influence of DM-information interest on DM-proneness. The model is fit on actual consumer data using the LISREL program. The program findings show that the characteristics of the DM-prone and the DM information interested are similar, and that DM-information interest appears to directly affect DM-proneness.