A major application of analytics in marketing is determining the attrition of customers. Suppose that the probability of a long-distance carrier's customer leaving for another carrier from one month to the next is 0.12. What distribution models the retention of an individual customer? What is the expected value and standard deviation?
Answers
Direct marketing is that it enables promoting products or services that might not be known to consumers. Products or service with a sound value proposition, matched with an attractive offer, supported with effective communication, delivered through a suitable direct marketing channel and targeting the relevant customer segment can result in a very effective cost of acquisition. Relative to other channels of distribution (say retailing) direct marketing as a practice principally relies on the proposition, offer, communication, choice of channel and the target customer and so less dependent on the brand strength. Despite the proven ability of direct marketing to generate measurable results, most companies continue to use general or branding advertising to market their products or services.