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Author Bitran, G.; Mondschein, S.
Title Why individualized contact policies are critical in the mass affluent market Type
Year 2015 Publication Academia-Revista Latinoamericana De Administracion Abbreviated Journal Acad.-Rev. Latinoam. Adm.
Volume 28 Issue 2 Pages 251-272
Keywords Marketing and advertising; Stochastic dynamic programming
Abstract Purpose – The purpose of this paper is to study the optimal contact policies for customers that belong to the mass affluent market. Design/methodology/approach – The authors formulate a stochastic dynamic programming model to determine the optimal frequency of contacts in order to maximize the expected return of the company. Findings – The authors show that personalized marketing strategies provide a competitive advantage to companies that contact their customers directly through, for example, phone calls or meetings. The authors show that a threshold policy is only optimal for customers with increasing sensitivity to contact. In all other cases, optimal policies might have a less intuitive structure. The authors also study the importance of the size of the customer database and determine the optimal maximum recency when maintenance costs are present. Practical implications – Contact policies should be tailored for each company/industry individually, due to their sensitivity to customers' purchasing behavior.
Address [Bitran, Gabriel] MIT, Sloan Sch Business, Cambridge, MA 02139 USA, Email: susana.mondschein@uai.cl
Corporate Author Thesis
Publisher Emerald Group Publishing Limited Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 1012-8255 ISBN Medium
Area Expedition Conference
Notes WOS:000357386800006 Approved
Call Number UAI @ eduardo.moreno @ Serial 511
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