Journal of Interactive Marketing

Increasing costs, competition, and consumer skepticism present serious challenges to the growth of direct marketing. The future success of direct marketing firms rests with their ability to exploit their inherent competitive advantages. One critical advantage is their ability to target very specific groups of customers with individualized marketing programs. This article supports a segmentation approach to targeting customer groups based on both the needs underlying a purchase and descriptive buyer data. The steps for performing a need-based segmentation analysis are discussed. This is followed by a section pertaining to the implementation of direct marketing programs based on the results of the benefit/buyer motive segmentation analysis.

This study investigates similarity among products not selected by a comparability criterion, on the basis of a large database containing information about consumers’ purchases of direct mail products. Products are represented by their buyers, and similarity among them is derived from the tendency of the products to be consumed jointly. These similarities are examined against experts’ categorization of the products. Applications for direct marketing are discussed.

Using data gathered from credit account holders of a national mail/phone order catalog, the present study examines whether contemporary consumers have integrated nonstore alternatives into their categorization of retailers. This research finds that there is a segment that exhibits preference for nonstore buying, that women have more experience shopping than do men, and that such shopping/purchase experience is related to willingness to use mail/phone order catalogs. These results also indicate that respondents do not associate any of the products considered with preference for mail/phone order purchase.

Much attention has been given of late to the potential of database marketing (DBM). This article considers the capacity of DBM in the specific instance of retention marketing, where the objective is not necessarily to gain more new customers, but to lose fewer existing ones. Retention marketing is a particularly valuable strategy if barriers to exit by customers are low, such as in short-term insurance, where policy lapse rates are generally high. The article examines the correlation between different variables in the database and the frequency of lapse by customers, and whether the probability for lapsing for a customer can be predicted by information contained in the database. Unsuccessful attempts to do this using the database of a small short-term insurance company are described. Suggestions are made for improving similar undertakings in the future, as are further directions for research.

This study investigates a unique lottery-oriented mail survey response mechanism, a single prize give away rather than cash prizes, to measure its impact on a consumer sample in terms of 1) the response rate, 2) cost effectiveness, and 3) biasing effect on their on their responses. A random sample of 6,384 customers from a commercial products sponsor's customer database and 6,384 noncustomers drawn from telephone directories from seven areas of Ohio was selected for this study. The results demonstrate that it is possible for managers to increase response rates using a lottery prize giveaway incentive and reduce the costs per completed survey. Perhaps direct marketing companies could increase their sales and lower their contact costs using a single lottery prize giveaway incentive such as this article describes. Managers using this method also do not have to suffer validity problems.

A survey of 557 customers of a national mail order company specializing in photographic and video equipment was conducted to determine the differences between those who had purchased more than once from the company's catalog in a three-year period (“repeat customers”), and those who had purchased one time only in the same period (“non-repeat customers”). A discriminant analysis showed that variables designed to measure customer attitudes about price, service, and selected catalog features were influential in discriminating between repeat and non-repeat customers. Research and managerial implications of the findings are suggested.