Database Marketing Increases Prospecting Effectiveness at Merrill Lynch
Russell P. Labe
Additional contact information
Russell P. Labe: Merrill Lynch Management Science Group, PO Box 9065, Princeton, NJ 08543-9065
Interfaces, 1994, vol. 24, issue 5, 1-12
Abstract:
Establishing new client relationships is critical in the financial services industry. Merrill Lynch uses database marketing to enhance its prospecting efforts. The management science group developed a discriminant model to identify high quality prospects using US household demographic data. We used high quality clients, known as priority households, as the target group and field tested the resulting priority model along with three alternative models. I evaluated the performance of all the models after six months, using the performance of Merrill Lynch's existing prospecting program as a baseline. The priority model significantly outperformed the baseline, with 167 percent higher assets, 39 percent higher revenues, and a 43 percent higher conversion rate. This success led Merrill Lynch to adopt the priority model in its ongoing prospecting efforts. Annual benefits are estimated at $3.5 to $6 billion in incremental client assets and $200,000 to $450,000 in incremental revenues.
Keywords: marketing; financial institutions: brokerage and trading (search for similar items in EconPapers)
Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
http://dx.doi.org/10.1287/inte.24.5.1 (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:24:y:1994:i:5:p:1-12
Access Statistics for this article
More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().