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Isuzu decided to use the models to create a mailing designed to drive selected customers to Isuzu dealers. The goal of the mailing was to Test the model to determine whether the scoring methodology could correctly separate the customers into the three segments. Use the same creative material for all segments low, medium, and high scores in order to get a valid test. Provide a mechanism for collecting and updating data and offer a purchase incentive. Sell 150 trucks. The data in the legacy system had many aws. They were over a year old. Much of the contact management history had not been recorded. The majority of the customers were small vocational companies, such as Joe & Jim s Landscape Company in Keokuk, Iowa. The vocation of many other companies was dif cult to identify. The data used for the model were put together from multiple sources of data: R. L. Polk, InfoUSA, and in-house transaction les. There was an additional problem of determining who the real driver of the truck was. In a typical situation, the sale of a truck might have been nanced by GE Capital, then the truck was delivered to Ryder Truck, leased with a new truck body to Joe & Jim s Landscape, then driven by Mac McKenzie. Who is the decision maker for the purchase of a new truck
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What Was Sent to the Customers
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Msdbm created a direct-mail package that included a cover letter, a faxback form asking speci c purchasing questions, a four-color product information sheet highlighting the features and bene ts of the most popular truck model (N Series), and a purchase certi cate for an additional gift if a truck were purchased. The completion of the fax-back purchase information form guaranteed all respondents a gift of a briefcase, while the purchase of a new or used vehicle guaranteed the buyer a set of seat covers and oor mats for use in the vehicle. Respondents were given only 60 days to take advantage of the offer. The total quantity
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Table 7-5 Trucks Sold
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Group totals High score Medium score Low score Control group Total 1899 1855 1890 520 6164 Companies buying 97 32 15 3 144 Buying rate 5.10% 1.70% 0.80% 0.60% 2.30% Trucks sold 107 34 16 3 160
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mailed was 6000. In addition, 520 companies were set aside as a control group to monitor the success of the promotion. These 520 companies did not get the promotions. This test mailing proved that the scoring methodology that had been developed was highly accurate; the results are shown in Table 7-5. As a result, Isuzu used the same methodology to score the entire customer le for a follow-up mailing. This gave Isuzu the ability to target key customers and ensure the sale of a vehicle at very little cost, compared to normal prospect acquisition costs. The marketing and sales departments were initially dubious about the mailing. Based on their previous experience, they had expected to sell only 85 trucks to 6000 prospects. After they saw the results, they could see that their future success was going to be tied to database marketing. Being able to accurately predict which companies were likely to buy, so that they could direct their marketing and sales efforts at those companies, proved to be a powerful advantage. As a result of the test campaign, the company sold 160 trucks, for a total of more than $5,600,000, with an investment, including the model, printing, mailing, and generation of creative material, of $80,000 (see Table 7-6). The industry estimates that, in general, it costs a manufacturer about $1000 in marketing and sales effort to sell one midsized truck. Using the database, Isuzu was able to sell the trucks for half that amount.
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