*NCDM: Fingerhut's Database Marketing Program Brings Impressive Results

Share this content:
LAS VEGAS -- Paul Hanley, product manager of business intelligence at Fingerhut Companies Inc., Minnetonka , MN, told attendees at a pre-conference session here at the 24th National Center for Database Marketing Conference and Exhibition that by using a technique called Mail-Stream Optimization, its catalog division was able to greatly increase its profits.


MSO is a system of mathematical models that finds the optimal mail-stream to assign to each existing customer, Hanley said. With this information in hand, Fingerhut can get the right catalog in the right customer's hands at any point in time. It is also a complex decision tool that allows the company to pinpoint which catalog will generate the most incremental revenue for each customer.


Fingerhut decided to use the MSO approach in the mid-1990s, when it found that its active customers were getting most of the 100 catalogs it was sending out.


"These catalogs had a significant amount of redundant merchandise and that's where the challenge came in," Hanley said. "There were certain catalogs that had, in some cases, 50 percent of the merchandise in a catalog that was mailed in the same week to the same customer. We had a saturation problem."


MSO addresses the saturation-levels of its current customers in an effort to increase profits. It is based on the traditional, promotional-scoring model, but updated with saturation information, Hanley said.


Ultimately, it allows Fingerhut to give customers the mail they want, when they want it, as opposed to receiving mailings that look like unsolicited offers, which they are more likely to toss out.


"There's a reason why customers call much of what they receive in their mail boxes junk mail," Haley said. "MSO, however, allows us to put relevant catalogs in front of customers so that they don't think of them as junk mail."


The MSO program, which was completed in 1998, was created with Torrent Systems, Cambridge, MA, a database marketing software vendor, and IBM's business intelligence division, Armonk, NY. Torrent brought customer data expertise and a sophisticated database marketing system to the application, as well as the ability to execute it. IBM brought, among other things, optimization techniques, Hanley said.
close

Next Article in Data/Analytics

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above