A decision support system for direct mailing decisions

Direct marketing firms want to transfer their message as efficiently as possible in order to obtain a profitable long-term relationship with individual customers. Much attention has been paid to address selection of existing customers and on identifying new profitable prospects. Less attention has been paid to the optimal frequency of the contacts with customers. We provide a decision support system that helps the direct mailer to determine mailing frequency for active customers. The system observes the mailing pattern of these customers in terms of the well-known R(ecency), F(requency) and M(onetary) variables. The underlying model is based on an optimization model for the frequency of direct mailings. The system provides the direct mailer with tools to define preferred response behavior and advises the direct mailer on the mailing strategy that will steer the customers towards this preferred response behavior.