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A B D E F G H I J 1 2 Customer Classification and Selection: RFM Analysis 3 4 Suppose you have the following pieces
A B D E F G H I J 1 2 Customer Classification and Selection: RFM Analysis 3 4 Suppose you have the following pieces of information about two possible coupon mailing strategies attempting to acquire new customers: 5 6 Strategy A: "Announce upcoming sale" Strategy B: "We Miss You" 7 Total number of prospects Net profit per sale Cost per mailer 8 200,000 $15 $0.75 200,000 $4 $0.25 9 10 11 A. 12 Calculate the break-even response rate for each strategy. Format this as a percent. 13 Strategy A Strategy B Break-even response rate 14 15 Based on your answer to part A, how many out of every 1,000 mailings need to result in sales in order to "break even" on the cost of mailing? Answer for each campaign. 16 B. 17 18
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