Contemporary Database Marketing 

by Martin Baier, Kurtis Ruf and Goutam Chakraborty

Customers--not one-time buyers, but people who make repeat purchases-- are the basis of virtually every profitable business. And the key to turning prospects and one-time buyers into real customers is making the right offer to the right prospects at the right time. That has been always been important, but in today's market it is a mandatory survival skill.

This book shows the reader how to use all of the current statistical tools, techniques, and models to identify profitable prospects and convert them into profitable repeat customers. Interactive workshops on CD enable the reader to work with and manipulate data, models and other predictive tools to gain a hands-on practical knowledge of this most important contemporary marketing tool.

The authors are Martin Baier, one of the leading figures and founders of contemporary direct marketing; Kurtis Ruf, president of Ruf Strategic Solutions, one of the leading database marketing organization in the country; and Goutam Chakraborty, Associate Professor of Marketing at Oklahoma State University.

Table of Contents

Preface
Introduction
Section 1 Fundamentals of Database Marketing

Chapter ONE Basics of Direct Marketing
What Is Direct Marketing?
Database Marketing: The Next Step
Database Productivity: Customer Loyalty and Retention and the Lifetime Value of a Customer
The Direct Marketing Cycle
Full-Circle Marketing
The Uses and Users of Database Marketing
Interactivity and the Convergence of Print, Broadcast, and Electronic Media
Privacy and Permission Marketing
Workshop 1-1: Turning Madame Tussaud's into a Strategy-Driven Direct Marketer

Chapter TWO Basic Principles for Developing, Maintaining, and Using a Database
Information a Database Should Contain
Kinds of Databases
Designing a Database
Maintaining a Database
Workshop 2-1: Developing and Using a Customer Database

Chapter THREE Data Enhancements
Data Sources and Collection
Data Warehousing
Data Mining
Enhancing a Database
A Guide to an Endless Array of Enhancements
Compiling a Customer Profile
The Customer Database and the 80/20 Principle
Interactive Workshop 3-1: Using a Balanced Scorecard Dashboard

Section 2 The Essential Tools of Information Gathering and Analysis

Chapter FOUR Information Gathering: Sources and Uses of Data
Surveys and Experiments
Uses of Research: Identifying Problems and Objectives
Sources of Data
Workshop 4-1:Experimentation (Testing) of Copy Approach in Fund Raising
Workshop 4-2: A Primer on Survey Design

Chapter FIVE Using Basic Statistical Concepts
Basic Working Concepts: Population and Sample
Descriptive Statistics
Frequency Distribution
Inferential Statistics
Interactive Workshop 5-1 Using Excel for Confidence Intervals and Hypothesis
Testing

Chapter SIX Data Analysis Tools and Techniques
Bivariate Analysis
Multivariate Analysis
Cluster Analysis
Interactive Workshop 6-1:Using Excel for Cross-Tab Analysis
Interactive Workshop 6-2:Excel for Independent Sample T-Test for Means
Interactive Workshop 6-3:Using Excel for Independent Sample T-Test for Response Rate
Interactive Workshop 6-4:Using Excel for Correlation Analysis
Interactive Workshop 6-5:Using Excel for Simple Regression
Interactive Workshop 6-6:Using Excel for Multiple Regression Analysis

Section 3 Database Marketing Strategies and Program Applications

Chapter SEVEN The Lifetime Value of a Customer
Rate of Response: What Should It Be? How Is It Measured?
Determination of Break-Even and the Lifetime Value of a Customer
Interactive Workshop 7-1:Establishing Break-Even Point for a Single Sale
Interactive Workshop 7-2: The Continuity of Value of a Customer over Future Time
Interactive Workshop 7-3:Enhanced LTV: The Lifetime Value of a Customer with Cross-Selling
Planning, Forecasting, Budgeting, and Evaluating
Interactive Workshop 7-4:Forecast Model That Views Customers as Investments
Interactive Workshop 7-5: The Recency/Frequency/Monetary (R/F/M) Formula
Exercises in Determining Lifetime Value

Chapter EIGHT Consumer Market Segmentation
The Nature of Market Segmentation and Penetration
How to Identify Consumer Market Segments
Product Differentiation and Positioning
Workshop 8-1 Identifying and Reaching a Database Market Segment

Chapter NINE Business-to-Business Market Segmentation
How to Identify Business-to-Business Market Segments
Extended Data--New Business Enhancement Variables
Econometric Footprints
Cluster Analysis: Targeting Business Customers
Unleashing the Power of Database Marketing: Location Analysis
Interactive Workshop 9-1:Business-to-Business Market Segmentation
Business Cluster Penetration Analysis of Customers
Interactive Workshop 9-2:Building a Business-to-Business Customer Profile

Chapter TEN Structuring and Evaluating an Experiment
Experimental Designs
Designing a Random Sample
How to Determine the Size of the Sample
Interactive Workshop 10-1: Setting up an Experiment
Interactive Workshop 10-2: Calculating Samples Size and Limit of Error
Interactive Workshop 10-3:Measuring Difference
Interactive Workshop 10-4: Factorial Designs
Interactive Workshop 10-5:Use of Excel for Independent t-Test for Testing Response Rates between Test and Control Groups
Interactive Workshop 10-6:Use of Excel for Analysis of Variance
Exercises in Structuring and Conducting Experiments

Chapter ELEVEN Decision Making
The Decision-Making Process
Predictive Modeling
Workshop 11-1: Using Multivariate Analysis to Make Decisions

Chapter TWELVE Using Database Information to Create More Effective Promotions
Why People Buy
The Nature of Demand
Offers and Benefits to Customers
The Nature of Promotion
Direct Response Advertising: Message and Media
Interactive Workshop 12 Developing Targeted Promotions

Section 4 Cases

Chapter THIRTEEN The Mountain & Valley Resort (MVR) Ski Database
The MVR Ski Database
Market Segmentation and Customer Penetration of the MVR Ski Database
Interactive Workshop 13-1:Demonstration of Utilization of the MVR Ski Database

Chapter FOURTEEN Market Segmentation and Customer Penetration of MVR Guest Database
Correlations of Cluster Penetration with Demographics and Lifestyles
Media Analysis: Categories and Lifestyle Preferences of Customers
Interactive Workshop 14-1:Calculating Customer Penetration and Building a Profile of MVR Guests
Interactive Workshop 14-2:Calculating the Lifetime Value of an MVR Guest

Exercises
Bibliography
Index

What the experts are saying about Contemporary Database Marketing

The authors have fashioned a seamless blend of technology and marketing technique into a well-written and well-organized presentation of one of the essential marketing subjects of our time. This is an ideal text for an upper level or graduate course in database marketing. And it would also be of great use to professionals.
-Ruth P. Stevens
President, eMarketing Strategy
Adjunct Professor, Direct Marketing
New York University

In my opinion, a major void has existed in direct marketing education at the college level for some time. The void has been a text that establishes the database as the linchpin of the direct marketing process. The void has been filled ... masterfully.

Contemporary Database Marketing: Concepts and Applications, by Martin Baier, Kurtis Ruf, and Goutam Chakraborty is the epitome of what direct marketing is and where it is going to go. You should have a copy.
-Bob Stone
Chairman Emeritus, Stone & Adler, Inc.
Author, Successful Direct Marketing Methods

Bravo! An intensive and comprehensive look at a complex discipline that allows the reader to learn from the masters. The unique format makes this the most useful resource on this subject ever developed. The book plus companion CD makes the complex manageable. Get ready to immerse yourself in database marketing in more ways than one.

I can’t think of a better way to learn the art and science of database marketing. You’re taught by the masters, but you get to immerse yourself in the wealth of data, applications and techniques available on the companion CD. Bravo to a fabulous, yet practical concept.
-Reggie Brady
President
Reggie Brady Marketing Solution

Contemporary Database Marketing serves as an excellent reference for both students and practitioners of database marketing. The authors have combined their collective wisdom to provide a comprehensive guide to the many forms of measurement and analysis used in the field of database marketing.
-John R. Goodman
Senior Vice President
Helzberg Diamonds
(a Berkshire Hathaway Company)

Contemporary Database Marketing is a comprehensive treatise on the use of databases and should be required reading by all those interested in direct marketing... no matter the channel...click, flip, or brick (Web, Catalog, or retail Store). It will be in my class. I will be adding it to my teaching texts.
-Robert MacArthur
Boston University

About the Authors of Contemporary Database Marketing

Martin Baier is regarded as one of the fifty leading direct marketing thinkers, practitioners, and educators of the past hundred years. He is Founder of the Center for Direct Marketing Education and Research at the University of Missouri --Kansas City and currently is Adjunct Professor in The College of Business of James Madison University. Baier's writings including several landmark publications, including "ZIP Code--The New Tool for Marketers in the Harvard Business Review earning him the title "Father of ZIP Code Marketing."

Baier has been the recipient of numerous awards, including member of the Direct Marketing Hall of Fame, The Direct Marketing Educational Foundation's Ed Mayer Award, and International Fellow of the Institute of Direct Marketing. He is a much sought-after speaker and has been featured at conferences all over the world.

Kurtis Ruf is Partner of Ruf Strategic Solutions, a marketing research and database modeling company based in Olathe, Kansas. He consults with a wide spectrum of Fortune 500 clients in diverse industries.

Ruf has been a frequent speaker on programs devoted to database marketing issues and concerns, including The Direct Marketing Association Annual Conference, The National Center for Database Marketing, The White House Conference Tourism, and Business-to-Business Database Marketing. He has also presented classroom programs for Northwestern University, George Washington University, and The Professional Direct Marketer Certification Program at the University of Missouri-- Kansas City.

Goutam Chakraborty is Associate Professor of Marketing in the College of Business of Oklahoma State University, where he has taught database and iterative marketing for nearly the past decade. He has also conducted university courses and professional institutes and seminars in Europe and Asia.

Chakraborty has received numerous awards for his teaching and publications, including Outstanding Direct Marketing Educator for 2000 by the Direct Marketing Educational Foundation.

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