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BookBinders Book Club

BookBinders Book Club. Quote for the Day. You will lose money sending a terrific piece of mail to a lousy list, but make money sending a lousy piece of mail to a terrific list! -- Direct mail lore. Current Industry Practice.

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BookBinders Book Club

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  1. BookBinders Book Club

  2. Quote for the Day You will lose money sending a terrific piece of mail to a lousy list, but make money sending a lousy piece of mail to a terrific list! -- Direct mail lore

  3. Current Industry Practice • Dominant “Scoring Rule” used in the industry is the RFM (Recency, Frequency, and Monetary) model: Recency Last purchased in the past 3 months 25 points Last purchased in the past 3 - 6 months 20 Last purchased in the past 6 - 9 months 10 Last purchased in the past 12 - 18 months 5 Last purchased in the past 18 months 0 Come up with similar “scoring rules” for Frequency and Monetary.

  4. Summary of Coefficients

  5. Predictions of Probability of Purchase • Regression: • MNL: • Neural Network: Predicted values are computed from within the model using the “verify” feature.

  6. Expected Response Rates in Holdout Sample by Mailing to the Top 60%

  7. Economics of Mailings Note: If we mailed to everyone on the list, we can expect a response rate of 8.9%.

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