Direct Mailing Decisions for a Dutch Fundraiser

Jedid-Jah Jonker, Nanda Piersma and Rob Potharst

ERIM Report Series Research in Management from 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

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.

Keywords: Markov decision process; decision support system; direct marketing (search for similar items in EconPapers)
JEL-codes: M M11 M31 R4 (search for similar items in EconPapers)
Date: 2002-12-02
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