Analytical challenges in customer acquisition

Behram J. Hansotia*, Paul Wang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

45 Scopus citations

Abstract

Three customer acquisition scenarios are discussed: first, where prospects' response behavior varies over their profiles but the offer/creative and customers' lifetime values (LTV) are assumed fixed and known; second, where the response behavior depends on both profile and creative/offer characteristics with the customers' LTV still assumed to be fixed; and third, where both response and customer LTV are allowed to vary. Using well-known breakeven analysis principles, the paper presents a simple relationship to determine which prospects should be contacted and then presents statistical models to estimate response and customer value at the individual level. This allows the practical application of the breakeven analysis to each individual prospect. It helps answer the question: should this prospect be invited to become a customer?.

Original languageEnglish (US)
Pages (from-to)7-19
Number of pages13
JournalJournal of Interactive Marketing
Volume11
Issue number2
DOIs
StatePublished - 1997

ASJC Scopus subject areas

  • Business and International Management
  • Marketing

Fingerprint

Dive into the research topics of 'Analytical challenges in customer acquisition'. Together they form a unique fingerprint.

Cite this