Monday, 4 June, 2007

Direct marketing needn’t make sense…

…it only needs to make money. Didn’t Denny Hatch say something like that? Anyway, here’s something similar from a data mining book (Data Mining Techniques, Berry & Linoff): “If a direct mail firm obtains a model that can accurately predict which numbers of a prospect pool are most likely to respond to a certain solicitation, the firm may not care how or why the model works (italics mine).”

I’ve heard similar statements elsewhere.

And all database marketing books teach you basic statistics, e.g., confidence intervals, comparing percentages, and so on, so that you can take dispassionate decisions based on response data.

The first thing we are taught is that we must ‘test, test, and test.’ And we enviously read Western case studies of the wonders wrought by testing.

But something is missing.

When in college, we were taught that physics is, in a way, applied mathematics. It has to make sense. The calculations have to model the real world.

From what little I’ve read about business statistics, its purpose doesn’t seem to be very different.

Right now, I have two (naive?) questions:
1. Given that there is bound to be a time gap between the test and scale-up, and that much can change during that gap, how prudent is it to base the scale-up on test results? I suppose there cannot be any easy (rule of the thumb) answer to this. And some gurus have advised that tests should be repeated before one scales up. Nonetheless, I am yet to come across a case study on ignoring test results. (There are plenty on chimpanzees and ink dots choosing investment portfolios that outperform analysts’ selections [though they do sound too good to be true].)

2. Which of these will be most surprising?
a. Software meant for the express purpose of making segments makes some (peculiar) segments

b. It would have made segments even if the data wasn’t about neighbourhood demographic profiles and frequency of previous orders but about first alphabet of middle name and direction of office desk

c. These segments, no matter how they are created, can be projected into the future, e.g., if Segment A shows significantly higher response for products of Type X than Segment B today they will do so (in most cases) in the future

I’d be unsurprised by if statements a and b came out true, but somewhat surprised if c did, unless the differences between A and B are readily explicable (e.g., A are male, B are female, and X are feminine cosmetic products).

I am also very curious to know what loyalty marketers do with their double-digit segments.

There are quite a few enlightening and entertaining books against the senseless use of statistics to sensationalise or sell or both, particularly in the stock markets. Shouldn’t there be one examining its application to marketing, particualrly direct and loyalty marketing, too?

4 comments:

oakleyses said...

longchamp outlet, cheap oakley sunglasses, chanel handbags, oakley sunglasses, replica watches, christian louboutin outlet, louis vuitton, jordan shoes, nike air max, louboutin pas cher, longchamp pas cher, burberry pas cher, prada outlet, gucci handbags, christian louboutin shoes, polo outlet, replica watches, nike free run, tiffany jewelry, louis vuitton outlet, christian louboutin uk, prada handbags, nike free, oakley sunglasses, ray ban sunglasses, christian louboutin, louis vuitton, jordan pas cher, ugg boots, ray ban sunglasses, michael kors pas cher, longchamp outlet, air max, polo ralph lauren outlet online, oakley sunglasses, sac longchamp pas cher, nike air max, nike outlet, tory burch outlet, oakley sunglasses wholesale, kate spade outlet, uggs on sale, louis vuitton outlet, louis vuitton outlet, ray ban sunglasses, longchamp outlet, nike roshe, polo ralph lauren, tiffany and co

oakleyses said...

michael kors outlet online, ray ban uk, michael kors outlet online, kate spade, michael kors outlet, michael kors outlet, polo lacoste, nike air max, nike free uk, hogan outlet, nike air max uk, true religion outlet, guess pas cher, michael kors outlet online, nike roshe run uk, oakley pas cher, uggs outlet, hollister pas cher, vans pas cher, abercrombie and fitch uk, hollister uk, nike tn, true religion jeans, sac vanessa bruno, true religion outlet, true religion outlet, converse pas cher, nike blazer pas cher, mulberry uk, burberry outlet, lululemon canada, nike air max uk, sac hermes, michael kors, ray ban pas cher, north face uk, michael kors outlet online, ralph lauren uk, nike air force, north face, coach outlet store online, uggs outlet, michael kors, new balance, replica handbags, timberland pas cher, coach outlet, burberry handbags, coach purses

oakleyses said...

hollister clothing, converse outlet, vans, chi flat iron, timberland boots, north face outlet, mont blanc pens, abercrombie and fitch, ray ban, nike air max, p90x workout, hollister, nike huaraches, beats by dre, lululemon, asics running shoes, nike trainers uk, babyliss, wedding dresses, vans outlet, gucci, mcm handbags, mac cosmetics, herve leger, lancel, oakley, reebok outlet, nike air max, insanity workout, iphone cases, converse, bottega veneta, longchamp uk, instyler, new balance shoes, nfl jerseys, north face outlet, celine handbags, louboutin, jimmy choo outlet, valentino shoes, soccer jerseys, ferragamo shoes, ghd hair, hermes belt, ralph lauren, hollister, soccer shoes, nike roshe run, baseball bats

oakleyses said...

hollister, wedding dresses, louis vuitton, moncler uk, moncler, supra shoes, canada goose outlet, canada goose outlet, thomas sabo, ugg,uggs,uggs canada, canada goose, moncler, louis vuitton, ugg, juicy couture outlet, ugg pas cher, montre pas cher, swarovski, moncler, moncler, karen millen uk, louis vuitton, canada goose uk, doudoune moncler, links of london, canada goose, ugg,ugg australia,ugg italia, louis vuitton, marc jacobs, moncler outlet, swarovski crystal, pandora jewelry, coach outlet, canada goose outlet, canada goose jackets, replica watches, juicy couture outlet, ugg uk, louis vuitton, canada goose, pandora uk, toms shoes, pandora charms, moncler outlet, pandora jewelry