Customers—not one-time buyers, but people who make repeat purchases—are the basis of virtually every profitable business. And the key to turning prospects and one-time buyers into real customers is making the right offer to the right prospects at the right time. That has been always been important, but in today's market it is a mandatory survival skill. This book shows the reader how to use all of the current statistical tools, techniques, and models to identify profitable prospects and convert them into profitable repeat customers. Interactive workshops on CD enable the reader to work with and manipulate data, models and other predictive tools to gain a hands-on practical knowledge of this most important contemporary marketing tool.

The authors are Martin Baier, one of the leading figures and founders of contemporary direct marketing; Kurtis Ruf, president of Ruf Strategic Solutions, one of the leading database marketing organization in the country; and Goutam Chakraborty, Associate Professor of Marketing at Oklahoma State University.

Abbreviated Table of Contents
Section I Fundamentals of Database Marketing
Section II The Essential Tools of Information Gathering and Data Analysis
Section III Database Strategies and Program Applications
Section IV Cases

Preface


Introduction

Section 1: Fundamentals of Database Marketing

Chapter 1: Basics of Direct Marketing

What Is Direct Marketing?
Database Marketing: The Next Step
Database Productivity: Customer Loyalty and Retention and the Lifetime Value of a Customer
The Direct Marketing Cycle
Full-Circle Marketing
The Uses and Users of Database Marketing
Interactivity and the Convergence of Print, Broadcast, and Electronic Media
Privacy and Permission Marketing
Workshop 1-1:
Turning Madame Tussaud's into a Strategy-Driven Direct Marketer

Chapter 2: Basic Principles for Developing, Maintaining, and Using a Database

Information a Database Should Contain
Kinds of Databases
Designing a Database
Maintaining a Database
Workshop 2-1:
Developing and Using a Customer Database

Chapter 3: Data Enhancements

Data Sources and Collection
Data Warehousing
Data Mining
Enhancing a Database
A Guide to an Endless Array of Enhancements
Compiling a Customer Profile
The Customer Database and the 80/20 Principle
Interactive Workshop 3-1:
Using a Balanced Scorecard Dashboard

Section 2: The Essential Tools of Information Gathering and Analysis

Chapter 4: Information Gathering: Sources and Uses of Data

Surveys and Experiments
Uses of Research: Identifying Problems and Objectives
Sources of Data
Workshop 4-1:
Experimentation (Testing) of Copy Approach in Fund Raising
Workshop 4-2:
A Primer on Survey Design

Chapter 5: Using Basic Statistical Concepts

Basic Working Concepts: Population and Sample
Descriptive Statistics
Frequency Distribution
Inferential Statistics
Interactive Workshop 5-1:
Using Excel for Confidence Intervals and Hypothesis
Testing

Chapter 6: Data Analysis Tools and Techniques

Bivariate Analysis
Multivariate Analysis
Cluster Analysis
Interactive Workshop 6-1:
Using Excel for Cross-Tab Analysis
Interactive Workshop 6-2:
Excel for Independent Sample T-Test for Means
Interactive Workshop 6-3:
Using Excel for Independent Sample T-Test for Response Rate
Interactive Workshop 6-4:
Using Excel for Correlation Analysis
Interactive Workshop 6-5:
Using Excel for Simple Regression
Interactive Workshop 6-6:
Using Excel for Multiple Regression Analysis

Section 3: Database Marketing Strategies and Program Applications
 
Chapter 7: The Lifetime Value of a Customer

Rate of Response: What Should It Be? How Is It Measured?
Determination of Break-Even and the Lifetime Value of a Customer
Interactive Workshop 7-1:
Establishing Break-Even Point for a Single Sale
Interactive Workshop 7-2:
The Continuity of Value of a Customer over Future Time
Interactive Workshop 7-3:
Enhanced LTV: The Lifetime Value of a Customer with Cross-Selling
Planning, Forecasting, Budgeting, and Evaluating
Interactive Workshop 7-4:
Forecast Model That Views Customers as Investments
Interactive Workshop 7-5:
The Recency/Frequency/Monetary (R/F/M) Formula
Exercises in Determining Lifetime Value

Chapter 8: Consumer Market Segmentation

The Nature of Market Segmentation and Penetration
How to Identify Consumer Market Segments
Product Differentiation and Positioning
Workshop 8-1:
Identifying and Reaching a Database Market Segment

Chapter 9: Business-to-Business Market Segmentation

How to Identify Business-to-Business Market Segments
Extended Data--New Business Enhancement Variables
Econometric Footprints
Cluster Analysis: Targeting Business Customers
Unleashing the Power of Database Marketing: Location Analysis
Interactive Workshop 9-1:
Business-to-Business Market Segmentation
Business Cluster Penetration Analysis of Customers
Interactive Workshop 9-2:
Building a Business-to-Business Customer Profile

Chapter 10: Structuring and Evaluating an Experiment

Experimental Designs
Designing a Random Sample
How to Determine the Size of the Sample
Interactive Workshop 10-1:
Setting up an Experiment
Interactive Workshop 10-2:
Calculating Samples Size and Limit of Error
Interactive Workshop 10-3:
Measuring Difference
Interactive Workshop 10-4:
Factorial Designs
Interactive Workshop 10-5:
Use of Excel for Independent t-Test for Testing Response Rates between Test and Control Groups
Interactive Workshop 10-6:
Use of Excel for Analysis of Variance
Exercises in Structuring and Conducting Experiments

Chapter 11: Decision Making

The Decision-Making Process
Predictive Modeling
Workshop 11-1:
Using Multivariate Analysis to Make Decisions

Chapter 12: Using Database Information to Create More Effective Promotions

Why People Buy
The Nature of Demand
Offers and Benefits to Customers
The Nature of Promotion
Direct Response Advertising: Message and Media
Interactive Workshop 12:
Developing Targeted Promotions

Section 4: Cases
 
Chapter 13: The Mountain & Valley Resort (MVR) Ski Database

The MVR Ski Database
Market Segmentation and Customer Penetration of the MVR Ski Database
Interactive Workshop 13-1:
Demonstration of Utilization of the MVR Ski Database

Chapter 14: Market Segmentation and Customer Penetration of MVR Guest Database

Correlations of Cluster Penetration with Demographics and Lifestyles
Media Analysis: Categories and Lifestyle Preferences of Customers
Interactive Workshop 14-1:
Calculating Customer Penetration and Building a Profile of MVR Guests
Interactive Workshop 14-2:
Calculating the Lifetime Value of an MVR Guest

Exercises
 
Bibliography

Index

The authors have fashioned a seamless blend of technology and marketing technique into a well-written and well-organized presentation of one of the essential marketing subjects of our time. This is an ideal text for an upper level or graduate course in database marketing. And it would also be of great use to professionals.

Ruth P. Stevens
President, eMarketing Strategy

Adjunct Professor, Direct Marketing
New York University

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In my opinion, a major void has existed in direct marketing education at the college level for some time. The void has been a text that establishes the database as the linchpin of the direct marketing process. The void has been filled ... masterfully.



Contemporary Database Marketing: Concepts and Applications, by Martin Baier, Kurtis Ruf, and Goutam Chakraborty is the epitome of what direct marketing is and where it is going to go. You should have a copy.

Bob Stone 

Chairman Emeritus 
Stone & Adler, Inc.

Author, Successful Direct Marketing Methods



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Bravo! An intensive and comprehensive look at a complex discipline that allows the reader to learn from the masters. The unique format makes this the most useful resource on this subject ever developed. The book plus companion CD makes the complex manageable. Get ready to immerse yourself in database marketing in more ways than one.

I can’t think of a better way to learn the art and science of database marketing. You’re taught by the masters, but you get to immerse yourself in the wealth of data, applications and techniques available on the companion CD. Bravo to a fabulous, yet practical concept.

Reggie Brady

President

Reggie Brady Marketing Solution

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Contemporary Database Marketing serves as an excellent reference for both students and practitioners of database marketing. The authors have combined their collective wisdom to provide a comprehensive guide to the many forms of measurement and analysis used in the field of database marketing.

John R. Goodman

Senior Vice President

Helzberg Diamonds

(a Berkshire Hathaway Company)

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Contemporary Database Marketing is a comprehensive treatise on the use of databases and should be required reading by all those interested in direct marketing . . . no matter the channel . . . click, flip, or brick (Web, Catalog, or retail Store). It will be in my class.

I will be adding it to my teaching texts.

Robert MacArthur

Boston University