Optimizing Customer Mail Streams at Fingerhut

Deb Campbell, Randy Erdahl, Doug Johnson, Eric Bibelnieks, Michael Haydock, Mark Bullock and Harlan Crowder
Additional contact information
Deb Campbell: Fingerhut Companies, Inc. 4400 Baker Road, Minnetonka, Minnesota 55343
Randy Erdahl: Fingerhut Companies, Inc.
Doug Johnson: Fingerhut Companies, Inc.
Eric Bibelnieks: IBM Global Services, 650 Third Avenue South, Minneapolis, Minnesota 55402
Michael Haydock: IBM Global Services
Mark Bullock: Level (3) Communications 1035 El Dorado Blvd., Broomfield, Colorado 80021
Harlan Crowder: Hewlett-Packard Laboratories 1501 Page Mill Road, Palo Alto, California 94304

Interfaces, 2001, vol. 31, issue 1, 77-90

Abstract: Fingerhut mails up to 120 catalogs per year to each of its 7 million customers. With this dense mail plan and mailing decisions made independently for each catalog, many customers were receiving redundant and unproductive catalogs. To identify and eliminate this excessive operational expense, IBM and Fingerhut together developed an optimization system that selects the most profitable sequence of catalogs, called a mail stream, for each customer. With mail streams, Fingerhut makes better mailing decisions at the customer level, resulting in increased profits. Today, Fingerhut runs this application weekly to find the most profitable mail stream for each customer.

Keywords: MARKETING—SEGMENTATION; STATISTICS—CLUSTER ANALYSIS (search for similar items in EconPapers)
Date: 2001
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