New customer acquisition: prospecting models and the use of commercially available external data

Abstract

Research on improved direct mail targeting has focused primarily on the segmenting of house/customer lists. However, continued expansion of the customer file requires acquisition of new customers. This article briefly described commercially available databases and then explores the linking of them to (necessarily) limited, individual-based survey data, to provide segmentation to enhance the process of efficient targeting of prospects (non-customers). Two methodological issues are also examined: the choice of a statistical model to be used to form a scoring equation during the linking process, and the treatment of missing values, a frequent occurrence in commercially available databases.