| 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. |