March 19, 2007

Contact Strategy Profitability

During a two-week period of time, you conduct an experiment. Customers are divided into four groups. The customers in each group are all "equal", in terms of quality.

Group 1 receives one catalog, and each of two weekly e-mail campaigns.

Group 2 receives one catalog, but does not receive any of the weekly e-mail campaigns.

Group 3 does not receive the catalog, but does receive each of the two weekly e-mail campaigns.

Group 4 does not receive the catalog, and does not receive either of the two weekly e-mail campaigns

The table at the bottom of this article illustrates the findings of the experiment. Which strategy would you employ (the strategy from Group 1, Group 2, Group 3, or Group 4), and why? Or, do you recommend a different strategy? Are you missing any information that you need to make this decision?


Phone Online Total Profit
Group 1 = Catalog + E-Mail $4.39 $5.94 $10.33 $1.56
Group 2 = Catalog $4.62 $5.71 $10.33 $1.58
Group 3 = E-Mail $0.19 $4.46 $4.65 $1.14
Group 4 = No Marketing $0.20 $3.99 $4.19 $1.05