Database Marketers Research Articles

Advancement and Improvement of CRM with the Use of Statistics Mining Strategies

Abstract consumer relationship control (CRM) is a system that mainly deals with the communication among a enterprise and its customers. CRM thru facts mining can get more efficiency in obtaining new customers, increasing fee of present clients and preserving excellent clients. The number one users of CRM software program programs are database entrepreneurs who are seeking to automate the system of interacting with clients. To achieve success, database marketers ought to first become aware of marketplace segments containing clients or prospects really worth high-income ability. Statistics mining technology are relevant in lots of methods models and strategies which are used to go looking variety of patterns and relationships of different forms of facts. Statistics mining applications system of looking within the automation gear which reaches to the mountains of facts to look patterns that are good predictors of buying behaviors.After information mining, marketers need to display the outcomes into which coping with the enterprise market described in immediately way.

Using RFM segmentation to support alumni reunion fundraising

Alumni reunion planning is a major annual undertaking for US colleges and universities. Alumni reunions are cherished events that provide opportunities for alumni to reflect and reconnect with classmates. In the current environment of declining federal and state financial support, fundraising has increasingly become an integral part of the alumni reunion planning process. One of the problems that alumni reunion planners encounter is the development of messaging that is tailored to influence the broad pool of potential donors. This paper provides a strategy to address the messaging problem by using RFM (Recency, Frequency and Monetary Value) segmentation to identify and group potential donors in a manner that supports effective target messaging. The reunion fundraising strategy guides the development of messaging that is intended to influence the donor pool. The donor pool is a mixture of major gift, leadership gift, and annual fund prospects. One common characteristic among the prospects in the donor pool is that they all have some type of historical record of financial activity with the institution. The historical record of financial activity is a valuable resource that provides the basic data requirement to conduct an RFM segmentation. The RFM model is an analytic tool that is designed for analysis of data from prospects with historical records of financial transactions. Higher education fundraisers and industry database marketers have used the RFM model with k-means cluster analysis to create segmentation structures that can be used to improve the planning and efficiency of philanthropic and commercial solicitation efforts. Our segmentation results successfully classified each of the alumni reunion potential donors as a member in one of the unique segments of major gift, leadership gift, and annual fund prospects. The characteristics of each identified segment provides information to guide the planners on developing tailored messaging to selectively influence the potential donors.

The Risk of Optimization in Marketing Campaigns

In marketing one of the most common important tasks is to assign campaigns to sets of customers. These sets of customers, the target groups, consist of persons with similar properties, for example a high buying affinity for a certain product. Database marketers would not only assign a campaign by general economic or promotional consideration, but they take into account learning from databases by algorithms. The basic assumptions are already determined clusters to which campaigns, representing the products, should be assigned. The assignment can be done in the most optimal way by formal optimization, which is usually stochastic due to unknown campaign success in the future. The authors model the financial risk of the campaign success for enterprise practice. Their proposal is to use triangular distributions, known from financial and supply chain management applications. In an example, they demonstrate the benefits of the proposed procedure for the marketing task.

Modeling Credit Card Share of Wallet: Solving the Incomplete Information Problem

Despite the powerful technologies that have enabled the assembly of transactional databases and the processing of information about individual customers and their buying patterns, database marketers have been limited by what is known as the “incomplete information problem”—that is, marketers have incomplete information about a customer's behavior in the product category of interest. A company's transactional database can only be built from customers' transactions with that company. Any transactions that have been made with other companies are missing. The authors present a modeling approach designed to solve the incomplete information problem. They use transactions conducted with a single supplier in that category to infer consumers' behavior with other suppliers in that category. In particular, armed with prior knowledge of the parametric form of consumer interpurchase time distributions, they uncover elements of the stochastic process that dictates which supplier a consumer chooses on a particular purchase occasion. The authors focus on interpurchase times because they form the core of the incomplete information problem. If a company uses its observed interpurchase times to estimate interpurchase times in the category for a specific consumer, its estimate will be biased upward. Combined with the model developed in this study, a familiar analysis of transaction profitability can be used to build a new type of lifetime value: lifetime category value of the customer.

THE IMPORTANCE OF DATABASE MARKETING IN SOCIAL NETWORK ADVERTISING

The last two decades have witnessed drastic globalization achievements and technological innovations that do not only have a major impact on the individual but have also produced profound changes in all aspects of business, including marketing. Owing to current trends, the means of realizing one of the primary goals of every business, that is, satisfying customers’ needs, have been greatly changed. Contemporary businesses focus their marketing efforts on creating databases of the existing customers and stimulating their company loyalty. The establishment and effective management of a customer database enables a personalized approach to every customer. It is personalization based on relevant information resulting from employing a customer database that can allow businesses to acquire new customers and retain the current ones as well as build a long-term relationship with customers that leads to greater marketing efficiency. One of the new trends that implies using databases is social networking. Social networks have thus become a location where users can not only communicate among themselves but also communicate with businesses. Without a quality database marketers would not be able to appropriately exploit social networking as an advertising medium and send personalized messages to individuals. Therefore the aim of this paper is to exemplify the importance of marketing databases in social network advertising.

Software patentability ruling from the European Patent Office's Enlarged Board

The circumstances in which computer software can be patented has been a topic of hot debate in recent years, with fundamental differences in how the issue is approached by patent offices around Europe. It is a matter that affects database marketers and other users whose businesses need software programs to function. Many had hoped that the referral of questions on the approach to be taken to the highest appeal board of the European Patent Office (EPO) would lead to clarity, with answers being given that national patent offices and courts would then follow. However, in a decision running to just shy of 60 pages, the EPO's Enlarged Board decided that the questions did not need answering. This article looks at what the Board said in reaching this conclusion, what it means for how patentability of such inventions is assessed, and where this leaves software developers and database marketers and other software users.

Data protection: More powers for the information commissioner

The Coroners and Justice Act 2009, the Data Protection (Monetary Penalties) (Maximum Penalties and Notices) Regulations 2010 and the Data Protection (Monetary Penalties) Order 2010 came into full force on 6 April 2010, increasing powers available to the United Kingdom's data protection watchdog, the Information Commissioner's Office (ICO). The additions include the power to request compulsory audits of certain ‘data controllers’ (organisations, such as database marketers, which are responsible for processing personal data) and the power to issue monetary fines of up to £500 000 for serious data protection breaches. These changes represent a significant strengthening of the ICO's powers. However, the compulsory auditing powers are limited and, at least for now, apply only to the public sector. The extent to which these powers can be effective, their possible ramifications for database marketers and other data controllers and further changes that may be made further down the line are evaluated below.

Taking stock of the UK's data retention requirements

On the back of a recent extension of the UK's data retention requirements in April 2009, the Government has published the results of its consultation on Protecting the Public in a Changing Communications Environment. The consultation sought input from the public on proposals for further changes to the data retention obligations placed on companies that provide communications services. With growing concerns over the UK's surveillance society and high-profile policy initiatives that require storage of personal data such as the national DNA database and national identity cards, commentators are looking at the results of the consultation with great interest. This article digests the responses and the government's reaction to them in light of recent legislative changes, and seeks to assess the potential impact on database marketers and what the future may hold.

Assessing model performance: The Gini statistic and its standard error

Database marketers frequently create statistical models to assess customers in terms of loyalty, lifetime value, responsiveness or acquisition. An assortment of modeling techniques, for example RFM (Recency-Frequency-Monetary value) models, regression, logit, neural networks and genetic algorithms, have been investigated to determine the most appropriate and effective technique. For the most part, traditional statistical measures utilize R2, the F statistic, the Chi Square statistic, various classification indices and so forth to assess model performance – with an emphasis on goodness of fit, and measuring how closely data points fit a statistical model. Practitioners, on the other hand, typically use summarized descriptive methods to assess model performance: decile analysis, lift charts, cumulative lift charts, gains tables and cumulative gains tables. Both of these approaches have limitations. Some academic researchers have suggested that traditional goodness of fit statistics are not appropriate for evaluating model performance when the objective is to create models that maximize differentiation between population segments in terms of response rates. The traditional statistical measures are appropriate for assessing how well individual response values fit a given model (for example minimize least square errors between response data points and predicted values); however, they are not appropriate for effectively selecting market segments or individual customers for targeting and meeting business objectives. The descriptive measures used by practitioners, although visually appealing, do not assess overall model performance with statistical certainty. This research offers a remedy for the current situation by proposing the use of the Gini statistic and the associated standard error. We explain the Gini statistic and how it is connected to commonly used assessment measures. We then describe a simple method for computing Gini and its standard error. The accuracy of the method is demonstrated with specific industry data files.

Manufacturing Customers

The fundamental question we pose in this article is how should we understand marketing in the age of increasingly integrated and networked customer databases? This article argues that new forms of database marketing are best described as customer production processes that rely on the exploitation of the multitude of consumer life.We suggest that the recent increase in available consumer data, computational power and analytical skills leads to a reorganization of the gaze of marketers and increasingly reverses the Fordist articulation of production and consumption. More specifically, instead of flexibly adjusting production regimes to shifting consumption patterns, database marketers collapse the production—consumption dichotomy by manufacturing customers as commodities. Hence, theories about the role of surveillance and simulation technologies for strategies of economic value creation need to be updated in order to acknowledge the evolution of database marketing into a central site of flexible accumulation processes in information capitalism.The result of our undertaking is a model of customer databases that foregrounds the far-reaching effect of potent simulational capabilities intersecting with constantly increasing computational power to transform the database into the factory of the 21st century.

Software patenting in a state of flux

Computer software is an essential resource for database marketers, with a wide variety of products available with increasingly sophisticated functionality. However, some database marketers and the software companies that supply them may not have considered the extent to which such software products can be protected as patented inventions. This issue has been the subject of much debate in recent years, and has led to various high-profile cases in both the English Patents Courts and the European Patent Office. This paper looks at the current state of play and assesses whether we are any closer to knowing what is patentable and what is not.

Poetic justice for owners of database right

How times have changed since the European Court of Justice's (ECJ) ruling in the British Horseracing Board and Fixtures Marketing cases 4 years ago. Those decisions had led many commentators to think that database right was dead and buried, with few databases able to benefit from protection. However, the ECJ's ruling in the Directmedia case (C-304/07) handed down in October 2008 has reinvigorated the right. The ECJ has spoken, and database owners such as database marketers will be gratified to hear that the Advocate General's opinion reported in the last issue was largely followed. The outcome and implications of the ruling are summarised below.

The revival of European database right?

Some four years on from the European Court of Justice's (ECJ) ruling in the British Horseracing Board (BHB) and Fixtures Marketing cases, the ECJ is poised once again to look at database right. This so-called sui generis right was created just over ten years ago through the implementation of the 1996 European Directive on legal protection of databases, but many thought that the BHB and Fixtures Marketing cases had led to its early demise. It is fair to say that, in the UK at least, there have been few signs of any resurgence in recent years, other than in the odd case in the employment law context, where the strength and ambit of the right cannot be considered to have been seriously assessed.1 Database makers and owners in the database marketing sector will therefore be interested to learn of some recent indications that the right might be stronger in some respects than practitioners had thought. Advocate General Sharpston has delivered an opinion on the Directmedia Publishing v Albert-Ludwigs-Universität Freiburg case,2 to be heard before the ECJ, which suggests that the infringing act of ‘extraction’ should be interpreted broadly. The issues that will be considered by the European Court, the Advocate General's views and the potential implications for database marketers are analysed below.

Data protection: Tougher enforcement and increased power for the Information Commissioner?

Database marketers, more than most, should be aware of their obligations as regards protection of data and the role of the Information Commissioner's Office. The perception of those who hold personal data, so-called ‘data controllers’ under the Data Protection Act, has been affected by headline news in the past year or so. Various committees and independent reviews are investigating the relevant legal provisions in light of recent breaches of data security and in particular HMRC's loss of data, reportedly comprising the banking details of 25 million recipients of child benefit. Here we assess the various calls for changes to the law and what tightening of the rules might mean for database marketers.

Including the effects of prior and recent contact effort in a customer scoring model for database marketing

Database marketers often use a scoring model to predict the likely value of contacting customers based on their purchase histories and demographics. However, when purchase history has been a partial result of the firm’s own contacting efforts, these contacts should also be accounted for in the scoring model. The current work extends the existing literature to account for the firm’s contacts by focusing on each customer’s most recent purchase. Contacts prior to that purchase are designated “prior contacts” and those after that purchase “recent contacts.” A new latent variables formulation of the customer’s propensity to respond is used to predict the likelihood and time of response as well as the relationship to the independent variables. The methodology also addresses the statistical problems of “selection bias” and “endogeneity,” which have been largely ignored in most customer scoring models. An application to the database of a charitable organization confirms that, in this case: (1) the effect of the firm’s customer contact efforts is associated with a stronger propensity to respond than is the case for the included demographics; (2) the firm’s “recent contact” efforts are associated with larger returns in customers’ propensity to respond than the “prior contact” efforts; and (3) the “recent contact” efforts are associated with an at-first increasing but then diminishing propensity to respond up to a point beyond which actual decreasing returns are observed with further contacts. Clearly, too much contacting can alienate would-be donors. The proposed model is general enough to calibrate such impacts in other database marketing applications where the relative effects might be different.

Assessing the costs of data retention in the UK

The deadline for the implementation of the Data Retention Directive that requires data be retained by communications service providers has recently passed. Although like many Member States the UK has opted to defer implementation of the provisions relating to internet data until March 2009, it has enacted legislation dealing with many of the Directive's requirements. This paper examines the new UK regulations and considers the obligations that will be placed on service providers when they come into effect in October 2007, and the potential ramifications for those like database marketers who use electronic communications services extensively.

Don't bin your Data Protection responsibilities

Database marketers being ‘data controllers’ within the meaning of the Data Protection Act ought to be aware of the UK's data protection legislation and may even have had dealings with the UK regulator, the Information Commissioner's Office (ICO). This paper describes some recent enforcement action taken by the ICO, including action taken in relation to unsolicited marketing mailings, and looks in detail at how the approach adopted seeks to ensure compliance.

Intelligent value-based customer segmentation method for campaign management: A case study of automobile retailer

Most marketers have difficulty in identifying the right customers to engage in successful campaigns. So far, customer segmentation is a popular method that is used for selecting appropriate customers for a launch campaign. Unfortunately, the link between customer segmentation and marketing campaign is missing. Another problem is that database marketers generally use different models to conduct customer segmentation and customer targeting. This study presents a novel approach that combines customer targeting and customer segmentation for campaign strategies. This investigation identifies customer behavior using a recency, frequency and monetary (RFM) model and then uses a customer life time value (LTV) model to evaluate proposed segmented customers. Additionally, this work proposes using generic algorithm (GA) to select more appropriate customers for each campaign strategy. To demonstrate the efficiency of the proposed method, this work performs an empirical study of a Nissan automobile retailer to segment over 4000 customers. The experimental results demonstrate that the proposed method can more effectively target valuable customers than random selection.

Specific performance of outsourcing contracts

Outsourcing is a common practice in the database marketing industry, with companies outsourcing marketing functions to database marketers and database marketers outsourcing a variety of functions themselves. But what happens if the relationship breaks down to a point where one of the parties does not want it to continue even if the other does? The recent case of Vertex v Powergen is a useful reminder of the courts’ discretion about whether to order specific performance of a contract to get the parties to do what they agreed to. This paper discusses the High Court's decision in Vertex and considers the situations in which database marketing companies might want to consider seeking orders for specific performance and the likelihood of such orders being made.

Legal update Patenting database marketing software

Database marketing is, by its very nature, a software-driven business. An enormous range of software products covers the wide variety of applications that arise in this field, and use of appropriate software can make the difference between database marketing success and failure. Since a company's software requirements are intrinsically linked to its particular business, some companies buy bespoke packages and others even write their own code. Despite software being such an essential resource, however, some database marketers and the software companies which supply them may not have considered the issue of the extent to which computer software is patentable. This issue has recently been hotly debated in Europe because of proposals for a new European Directive on the patentability of computer-implemented inventions. This has major implications for software developers and users, including those in the database marketing field. This paper explores the potential significance of software patenting for database marketers and software developers and provides an overview of the present position.