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OK. You have divided your customer base into ve segments, and you have developed a marketing program for each of the ve. Let s say you divided your customers by level of total spending (rather than by age, income, product categories, etc.). Were your segments the most profitable that you could have devised How can you know One good way to nd out is to create a universal control promotion that you use with your segment control groups. This is a good promotion that has worked in the past and resulted in a lot of sales. It is used to test the marketing promotions designed for each segment. Table 8-2 shows a possible result of a mailing to your segments based on total spending. Here s how we did the math for the lift in sales. We subtracted the sales rate for the control group from the sales rate from the test. In the Gold segment, for example, we subtracted 7.94 from 8.10 and got 0.16 percent. Then we multiplied that 0.16 percent by the number of people in the test segment in this case 100,000 to get the lift in sales. What this tells us is that the creative material we used with the Gold

The baseline data are derived from using the random entry strategy with the unmoditied standard exit strategy Mean ROA% is the average return on account over several sets of random entries; StdLh ROA% is the standard deviation of the return-on-account Mean $TRD is the average dollars-per-trade over several sets of random entries; and StdDev $TRD is the standard deviation of the dollars-per-trade Breakout models had the unique characteristic of being consistently profitable in-sample across almost every model-order combination tested Except for the volatility breakouts, these models performed much better than chance, albeit not profitably, out-of-sample; ie, the loss per trade was under $1,000, sometimes under $300 (the average loss to be expected was around $2,000 with random entries) In other words, the breakouts, taken together, were better than random.

Ellagic acid, found in a variety of fruits, nuts, and vegetables including blackberries, raspberries, strawberries, cranberries, walnuts, and pecans is a relatively stable flavonoid or polyphenol that is very helpful in overall detoxification. Ellagic acid acts as a detoxifying agent in protecting against many different kinds of cancer and other diseases. It works by binding to reactive carcinogens, either produced by our cells or from external sources, and inactivating them before they can infiltrate DNA and cause mutations. Because of this effect, ellagic acid is a potent antimutagen and anticarcinogen. In addition, ellagic acid increases the activity of Phase II detoxification enzymes including GST and quinone reductase, and it has known antioxidizing properties. Dr. Conney and associates at Rutgers University and the National Cancer Institute and Dr. Mukhtar and associates at Case Western University found ellagic acid to be a potent inhibitor of skin cancer caused by some of the strongest reactive intermediates of carcinogenic polycyclic aromatic hydrocarbons (PAHs) that we know about.

should not be a way to give away coupons. It should be a way to avoid having to give away coupons because the customers are so happy with the communications and services they are receiving that they will ignore the deep discounts of the competition. Treating all customers alike. Some customers are more loyal and profitable than others. Your database should identify these loyal customers, and your marketing strategy should work to retain them and to encourage others to emulate them. You should also do something to reduce the number of worthless customers on your rolls. If you treat all customers alike, you will never improve your customer mix. A retention budget of $1 million divided by 1 million customers will do very little to change anyone s behavior. Divide that $1 million among your 100,000 most valuable customers, and you have $10 per customer per year to reward loyalty and encourage retention. You may make some progress. Some company managements do not yet understand this.

However, outof-sample, the volatility breakouts did much worse than chance: With at-open and on-stop orders, the model lost more than $5,000 per trade, as though the market s current behavior is precisely designed to make these systems costly to trade The trend-following moving average models (crossover and slope) all performed slightly better than chance in-sample: They all lost rather heavily, but the losses were almost always less than $2,000 None of the systems, however, did very well Out-of-sample, the picture was somewhat more variable, but had the same flavor: Most of the models were somewhat better than chance, and one or two were much better than chance (but still not profitable)..

Summary

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Database marketing is a great success story. During the last 20 years, thousands of creative and skillful people have developed and applied new methods for using databases of customers and prospects to acquire customers, build loyalty, and increase sales. These methods are explained in detail in this book. But database marketing is more than a success story. It is a philosophy. Looked at from the customer s point of view, database marketing is a way of making customers happy of providing them with recognition, service, friendship, and information, for which, in return, they will reward you with loyalty, reduction in attrition, and increased sales. Generating pro ts by creating genuine customer satisfaction is the goal and hallmark of satisfactory database marketing. If you are doing things right, your customers will be glad that you have a database and that you have included them in it. They will appreciate the things that you do for them. If you can develop and carry out strategies that bring this situation about, you are a master marketer. You will keep your customers for life, and you will be happy in your work. You will have made the world a better place to live in.

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