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1. A Credit Card firm conducted a DB marketing campaign, after tying up with number of suppliers for
various products & services for discounted prices, if purchased through the Credit Cards issued by
the firm. A printed mailer with information on these special offers and call for action was sent to the
entire database of 100000 “active” card holders, at a cost of Rs. 22 lakhs. This campaign produced
the following results:
- Response Rate: 2%
- Total gain from all the orders received (Purchases – All servicing costs): Rs. 15 Lacs.
2. About 2 months later, the firm is about to launch another similar campaign, using the same
database as used for the earlier campaign (new card holders in the interim period are not
considered). However, the firm wishes to generate a proper target list from the database of 100000
customers, using RFM analysis, to make the DB marketing “profitable” and save on the cost of the
campaign.
4. The firm now studies the response to the previous campaign of the specific customer in each RFM
cell and records the response rate for each RFM cell, in the form of a table (125 records) and sorts
this table in descending order of response rate.
Based on the above analysis, what would be your recommendations for the new campaign, in terms of
what Target List of Customers must be selected and the number of mailers to be sent? How did you
reach these conclusions? What is the % saving in the cost for the new campaign?