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A dynamic segmentation approach for targeting and customizing direct marketing campaigns


Reutterer, Thomas; Mild, Andreas; Natter, Martin; Taudes, Alfred (2006). A dynamic segmentation approach for targeting and customizing direct marketing campaigns. Journal of Interactive Marketing, 20(3/4):43-57.

Abstract

An important aspect of customer relationship management is the targeting of customer segments with tailored promotional activities. While most contributions focus on the selection of promising customers for targeting, only few authors address the question of which specific differential offers to direct to the selected target groups. We focus on both issues and propose a flexible, two-stage approach for dynamically deriving behaviorally persistent segments and subsequent target marketing selection using retail-purchase histories from loyalty-program members. The underlying concept of behavioral persistence entails an in-depth analysis of complementary cross-category purchase interdependencies at a segment level. The effectiveness and efficiency of the proposed procedure are demonstrated in a controlled field experiment involving the targeting of several thousands of customers enrolled in the loyalty program of a “do-it-yourself” retailer. Our empirical findings provide evidence of significant positive impacts on both profitability and sales for segment-specific tailored direct marketing campaigns.

Abstract

An important aspect of customer relationship management is the targeting of customer segments with tailored promotional activities. While most contributions focus on the selection of promising customers for targeting, only few authors address the question of which specific differential offers to direct to the selected target groups. We focus on both issues and propose a flexible, two-stage approach for dynamically deriving behaviorally persistent segments and subsequent target marketing selection using retail-purchase histories from loyalty-program members. The underlying concept of behavioral persistence entails an in-depth analysis of complementary cross-category purchase interdependencies at a segment level. The effectiveness and efficiency of the proposed procedure are demonstrated in a controlled field experiment involving the targeting of several thousands of customers enrolled in the loyalty program of a “do-it-yourself” retailer. Our empirical findings provide evidence of significant positive impacts on both profitability and sales for segment-specific tailored direct marketing campaigns.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2006
Deposited On:09 Dec 2016 11:23
Last Modified:10 Dec 2016 04:08
Publisher:Elsevier
ISSN:1094-9968
Publisher DOI:https://doi.org/10.1002/dir.20066
Other Identification Number:merlin-id:14203

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