Getting the most out of all your customers

Companies spend billions of dollars on direct marketing, targeting individual customers with ever more accuracy. Yet despite the power of the myriad data-collecting and analytical tools at their disposal, they're still having trouble optimizing their direct-marketing investments. Many marketers try to minimize costs by pursuing only those customers who are cheap to find and cheap to keep. Others try to get the most customers they possibly can and keep all of them for as long as they can. But a customer need not be loyal to be highly profitable, and many loyal customers turn out to be highly unprofitable. Companies can get more out of direct marketing if they see it as a single system for generating profits than if they try to maximize performance measures at each stage of the process. This article describes a tool for doing just that. Called ARPRO (Allocating Resources for Profits), the tool is essentially a complex regression analysis that can estimate the impact of a company's direct-marketing investments on the profitability of its customer pool. With data that companies already gather, the tool can show managers how much to spend on acquisition versus retention and even what percentage of their funds they should allocate to the different direct-marketing channels. Using the model, companies can easily see that even small deviations from the optimal levels of customer profitability are expensive. Applying it to one catalog retailer showed, for instance, that a 10% reduction in marketing costs would lead to a 1.8 million dollar drop in long-term customer profits. Conversely, spending 69% less on marketing would actually increase average customer profitability at one B2B service provider by 42%. What's more, the tool can show that finding the optimal balance between investments in acquisition and retention can be more important than finding the optimum amount to invest overall.     

Neural networks for the analysis and forecasting of advertising and promotion impact

Allocating advertising expenses and forecasting total sales levels are the key issues in retailing, especially when many products are covered and significant cross-effects among products are likely. Various statistical and econometric methods could be applied for such analyses. We explore how well neural networks can be used in analyzing the effects of advertising and promotion on sales in this article. The results reveal that the predictive quality of neural networks depends on the different frequency of data observed, i.e. daily or weekly data models, and the specific learning algorithms used. The study also shows that neural networks are capable of capturing the nonlinear aspects of complex relationships in non-stationary data. By performing sensitivity analysis, neural networks can potentially single out important input variables, thereby making it useful for scenario development and practical use. Copyright © 1998 John Wiley & Sons, Ltd.     

走出机房深入基层服务营销

2012年以来,工行湖北省黄冈分行在银政、银企合作上收获颇丰,先后与市社保局、财政局、国税局、百佳超市、东坡外滩等数十家重点机构客户和公司客户建立了深度合作关系,机构存款和公司存款均实现了跨越式增长,其中机构存款增长幅度名列全省系统和全市同业排名双第一。这些成绩的取得,其中一部分也要归功于该行科技部门释放出的科技保障正能量——他们以高效、     

Targeted advertising and advertising avoidance

I examine how the increasing ability of firms to target their ads influences market outcomes when consumers have access to advertising‐avoidance tools. Although firms generally benefit from improved targeting, consumers need not. I also show that there may be too little blocking of ads in equilibrium and consider the role of targeted advertising when niche firms compete against mass‐market firms.     

The value captor's process: getting the most out of your new business ventures

The high failure rate among new business ventures is usually chalked up to the fundamental uncertainty of the process. In actuality, say McGrath and Keil, flawed ways of assessing and managing ventures may account for the disappointing amount of value they generate. Instead of taking the go/no-go approach, whereby a project either advances toward launch or is killed, decision makers should consider a range of alternatives: recycling the venture by aiming it at a new target market; spinning it off to other owners or a joint venture; spinning it in to an established business unit; or salvaging useful elements such as technologies, capabilities, knowledge, and patents. Firms that excel in value extraction--the "value captors" whose practices and mind-set this article explores--have created formal processes to systematically mine successes, failures, and everything in between. They know that a venture should be treated like a scientific experiment, in which learning plays a critical role. They are ready to seize new opportunities if a venture falters on its original course. They foster networks to promote cooperation and collaboration between established business leaders and venture teams and involve people from throughout the company in the venture review process. They don't allow financial criteria to dominate the reviews, and they recognize that the best people to launch a business may not be the ones who developed the idea. If your innovation pipeline is dry, your promising projects are being strangled for lack of a speedy payback, or someone else has made a fabulous business out of a slightly altered idea that you abandoned, consider the value captor's path.     

Standard promotion practices versus up‐or‐out contracts

This article develops a theory concerning the choice between standard promotion practices and up‐or‐out contracts. Our theory is based on asymmetric learning and promotion incentives. We find that firms employ up‐or‐out contracts when firm‐specific human capital is low and standard promotion practices when it is high. We also find that, if commitment to a wage floor is feasible and effort provision is important, up‐or‐out is employed when low‐ and high‐level jobs are similar. These results are consistent with many of the settings in which up‐or‐out is typically observed, such as law firms and academia.     

Online advertising and privacy

An online platform auctions an advertising slot. Several advertisers compete in the auction, and consumers differ in their preferences. Prior to the auction, the platform decides whether to allow advertisers to access information about consumers (disclosure) or not (privacy). Disclosure improves the match between advertisers and consumers but increases product prices, even without price‐discrimination. We provide conditions under which disclosure or privacy is privately and/or socially optimal. When advertisers compete on the downstream market, disclosure can lead to an increase or a decrease in product prices depending on the nature of the information.     

The impact of advertising regulation on industry: the cigarette advertising ban of 1971

This article studies the impact of the 1971 TV/radio advertising ban on the cigarette industry. Data indicate that industry advertising spending decreased sharply immediately following the ban but recovered and actually exceeded the preban level within five years. A dynamic oligopoly model of advertising is developed to incorporate two potential explanations. The estimated model fully accounts for the puzzling trend, with 74% of the postban advertising spending increase explained by industry dynamics, and 26% explained by learning. Furthermore, this article uses the new concept of nonstationary oblivious equilibrium to handle intractable state space and accelerate equilibrium computation.     

Getting the attention you need

Employees have an enormous amount of business information at their fingertips--more specifically, at their desktops. The floodgates are open; profitable possibilities abound. But having to handle all that information has pushed downsized staffs to the brink of an acute attention deficit disorder. To achieve corporate goals, business leaders need their employees' full attention--and that attention is in short supply. Authors Thomas Davenport and John Beck have studied how companies manage the attention of their employees and their site visitors. In this article, they analyze the components of attention management through three lenses--economic, psychobiological, and technological--and offer guidelines for keeping employees focused on crucial corporate tasks. Their lessons are drawn from the best practices employed by today's stickiest Web sites and by traditional attention industries such as advertising, film, and television. The authors say executives must manage attention knowing that it's a zero-sum game (there's only so much to go around). Managers should also consider capitalizing on the basic survival and competitive instincts we all have that help determine how much attention we pay to certain things. For instance, the threat of corporate demise--and the consequent loss of jobs and livelihoods--undoubtedly focuses workers' attention on the need to change. Likewise, internal competition among business units may give employees added incentive to pay attention to a profit or sales goal. Leaders today need to pay more attention to attention because it's widely misunderstood and widely mismanaged, the authors conclude.     

Product market advertising and corporate bonds

Research shows that by enhancing visibility, advertising improves stock liquidity and returns. Unlike stock holders, bond holders may view advertising skeptically. Without proven effectiveness in improving revenues, large pre-interest advertising expenditures can be seen as eroding a firm's ability to meet its debt service obligations. We find that although greater advertising by a firm improves liquidity of its bonds in the market, it does not lower the firm's cost of debt. However, firms with ineffective advertising experience reduced bond market liquidity and a higher cost of debt. Without a real positive economic impact, advertising has little or no value for bond investors.     

Making the most of on-line recruiting

Ninety percent of large U.S. companies are already recruiting via the Internet. By simply logging on to the Web, company recruiters can locate vast numbers of qualified candidates for jobs at every level, screen them in minutes, and contact the most promising ones immediately. The payoffs can be enormous: it costs substantially less to hire someone on-line, and the time saved is equally great. In this article, Peter Cappelli examines some of the emerging service providers and technologies--matchmakers, job boards, hiring management systems software, and applicant-screening mechanisms that test skills and record interests. He also looks at some of the strategies companies are adopting as they enter on-line labor markets. Recruiting needs to be refashioned to resemble marketing, he stresses. Accordingly, smart companies are designing Web pages, and even product ads, with potential recruits in mind. They're giving line managers authority to hire so that candidates in cyberspace aren't lost. They're building internal on-line job networks to retain talent. Integrating recruiting efforts with overall marketing campaigns, especially through coordination and identification with the company's brand, is the most important thing companies can do to ensure success in on-line hiring. Along the way, Cappelli sounds two cautionary notes. First, a human touch, not electronic contact, is vital in the last steps of a successful hiring process. Second, companies must make sure that on-line testing and hiring criteria do not discriminate against women, disabled people, workers over 40, or members of minority groups. When competition for talent is fierce, companies that master the art and science of on-line recruiting will be the ones that attract and keep the best people.     

Getting the truth into workplace surveys

There's no doubt that companies can benefit from workplace surveys and questionnaires. Good surveys accurately home in on the problems the company wants information about. They are designed so that as many people as possible actually respond. And good survey design ensures that the spectrum of responses is unbiased. In this article, the author, a former research scientist at the University of Michigan and currently the president of a survey design firm, explores some glaring failures of survey design and provides 16 guidelines to improve workplace assessment tools. Applied judiciously, these rules will not only make a tangible difference in the quality and usefulness of the data obtained but will also produce an increased response rate. The guidelines--and the problems they address--fall into five areas: content, format, language, measurement, and administration. Here are a few examples: Survey questions should require people to assess observable behavior rather than make inferences; each section should contain a similar number of items and each item should have a similar number of words; words with strong associations to gender, race, or ethnicity should be avoided; the wording in one-third of the questions should be changed so that the desirable answer is a negative one; and response scales should provide a "don't know" or "not applicable" option. Following the guidelines in this article will help you get unbiased, representative, and useful information from your workplace survey.     

Getting it right the second time

Once a business performs a complex activity well, the parent organization often wants to replicate that success. But doing that is surprisingly difficult, and businesses nearly always fail when they try to reproduce a best practice. The reason? People approaching best-practice replication are overly optimistic and overconfident. They try to perfect an operation that's running nearly flawlessly, or they try to piece together different practices to create the perfect hybrid. Getting it right the second time (and all the times after that) involves adjusting for overconfidence in your own abilities and imposing strict discipline on the process and the organization. The authors studied numerous business settings to find out how organizational routines were successfully reproduced, and they identified five steps for successful replication. First, make sure you've got something that can be copied and that's worth copying. Some processes don't lend themselves to duplication; others can be copied but maybe shouldn't be. Second, work from a single template. It provides proof success, performance measurements, a tactical approach, and a reference for when problems arise. Third, copy the example exactly, and fourth, make changes only after you achieve acceptable results. The people who developed the template have probably already encountered many of the problems you want to "fix," so it's best to create a working system before you introduce changes. Fifth, don't throw away the template. If your copy doesn't work, you can use the template to identify and solve problems. Best-practice replication, while less glamorous than pure innovation, contributes enormously to the bottom line of most companies. The article's examples--Banc One, Rank Xerox, Intel, Starbucks, and Re/Max Israel--prove that exact copying is a non-trivial, challenging accomplishment.     

试论市场经济条件下的高校毕业生就业工作

对高校毕业生就业应如何适应市场发展进行了探讨，并提出各高校对毕业生就业应采取推荐和自身建设相结合的做法，帮助学生了解自己与社会需求，根据学生的专长，为社会输送适应市场发展规律的合格人才。     

Getting out from between a rock and a hard place: Can china use its foreign exchange reserves to save its banks?

Recently, the central bank of China lent part of its enormous reserve of foreign exchange to two of its largest banks in difficulty. This seemed to be a very clever policy response since the capital infusion did not affect the money supply nor sacrifice the currency peg as has traditionally been the case. This paper considers the viability of this policy and asks why other Southeast Asian countries with large reserves of foreign exchange did not adopt a similar approach to combat their bank problems in the 1990s.