Journal of Interactive Marketing

A linear programming model is developed and used to determine the monetary tradeoffs between fund raising and new contributor prospecting in direct mail charitable solicitation. This model considers both short- and long-term decision-making objectives, and incorporates operating constraints such as limitations on mailing expenses and variations in mailing list response rates. The contribution of the model is improved understanding of the tradeoffs between fund raising and contributor prospecting, in specific dollar terms, for every possible set of operating alternatives. The results of the calculations of the tradeoffs are presented in tabular form, and in a graph for easier evaluation and communication.

There is little doubt that one of the important motivations behind direct marketing patronage is convenience. Convenience has traditionally been conceptualized as a time-dominated phenomenon, yet much of the research that attempts to link demographic surrogates of time-constrained individuals/households with direct marketing patronage has shown only weak relationships. This paper reexamines the nature of convenience in the context of direct marketing patronage behavior. It reveals that an important oversight regarding convenience is that it consists not only of a time dimension, but also of space and effort dimensions. The qualitative data on which the study is based provide user-friendly data that offer rather literal suggestions as to how the convenience concerns of catalog patrons can be addressed.

Various methods are compared to calculate the regression-to-the-mean (RTM) effect in segmentation analysis, based on the results of a test mailing, distinguishing between the case of no-prior, non-parametric, and parametric knowledge on the distribution of the response rates of segments across the list. The advantages and disadvantages of each method and its implication for decision making are discussed.

This exploratory study contributes to an overlooked area of direct marketing research—the small local retail view of direct mail as an advertising medium. Traditional wisdom has indicated newspaper advertising as most appropriate for local retail firms, however, recent literature challenges that perspective. Data gathered from 187 small local retail firms in 41 states indicated that direct mail is perceived as a valuable advertising medium. Moreover, analysis suggests that direct mail is seen as significantly more valuable than weekly/community and daily newspapers—media that historically have been mainstays in the small retailer promotional mix. However, the data do reveal several significant differences in media perceptions between various retail sectors. Because of increased advertiser pressure for measurable results from advertising, and challenges facing the newspaper industry, it appears that direct mail may pose a significant threat to newspapers.