Proposal and effectiveness of a highly compelling direct mail method: Establishment and deployment of “PMOS-DM”

Abstract

No clear processes are used at car dealers when deciding target customers for direct mail campaigns, and individual sales representatives rely on their experience when making such decisions. This means that dealer strategies lose their effectiveness and dealers fail to achieve the desired increase in customer visits. Thus, for this study, the author has established the “Practical Method using Optimization and Statistics for Direct Mail, PMOS-DM” as a method of deciding the most suitable target customers for direct mail campaigns. Specifically, in order to both clarify the dealer's target customer types and increase the number of customer visits, the author applied mathematical programming (combinatorial optimization) using statistical science to establish a model for determining the most suitable target customers for direct mail campaigns. This model has subsequently been applied at company M dealers, demonstrating significant effectiveness in increasing customer visits.