The Traditional Approach to Acquiring New Customers

 

The traditional approach to customer acquisition is well understood; find the right people (targeting) and sell them what they want (advertising). Here, we will focus on targeting.

Targeting has historically been performed by cross-tabulating newly acquired customers against a standard suite of demographics. Some practitioners also use tree-based techniques so that a map of purchase percentages can be built. The rationale behind both the univariate and multivariate techniques is identical: unacquired customers are likely to respond similarly to customers like them who have responded in the recent past.

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