Dynamic catalog mailing policies

Published

Journal Article (Review)

Deciding who should receive a mail-order catalog is among the most important decisions that mail-order-catalog firms must address. In practice, the current approach to the problem is invariably myopic: firms send catalogs to customers who they think are most likely to order from that catalog. In doing so, the firms overlook the long-run implications of these decisions. For example, it may be profitable to mail to customers who are unlikely to order immediately if sending the current catalog increases the probability of a future order. We propose a model that allows firms to optimize mailing decisions by addressing the dynamic implications of their decisions. The model is conceptually simple and straightforward to implement. We apply the model to a large sample of historical data provided by a catalog firm and then evaluate its performance in a large-scale field test. The findings offer support for the proposed model but also identify opportunities for further improvement. © 2006 INFORMS.

Full Text

Duke Authors

Cited Authors

  • Simester, DI; Sun, P; Tsitsiklis, JN

Published Date

  • May 1, 2006

Published In

Volume / Issue

  • 52 / 5

Start / End Page

  • 683 - 696

Electronic International Standard Serial Number (EISSN)

  • 1526-5501

International Standard Serial Number (ISSN)

  • 0025-1909

Digital Object Identifier (DOI)

  • 10.1287/mnsc.1050.0504

Citation Source

  • Scopus