How does Retargeted Direct Mailing influences customer churn among independent opticians in the Netherlands, considering the moderating effects of customer characteristics?

Abstract

Reducing customer churn is crucial for business profitability, with personalized marketing strategies playing a key role. Despite the rise of digital marketing, traditional methods like Direct Mailing (DM) remain effective due to their tangible presence and high response rates. Retargeted Direct Mailing (RDM) leverages customer data to create personalized and well-timed mailings, re-engaging lost or at-risk customers. Understanding different customer types and their responses to various incentives within RDMs significantly influences campaigns effectiveness. Tailoring RDM strategies to individual preferences and characteristics optimizes customer retention. This thesis investigates the impact of RDM on customer churn among independent opticians in the Netherlands, considering customer characteristics. Panel data from 7,839 customers across 13 optical retailers over 8 years were analyzed using panel and logistic regression models. RDM effectively reduces customer churn by shortening purchase intervals, increasing purchase likelihood, and boosting spending. Responses to incentivized RDMs vary by customer characteristics, significantly improving purchase intervals and spending. Additionally, lower churn rates are observed across different customer segments, with older customers, female customers, and frequent buyers exhibiting the lowest churn rates. Limitations of the study include data sparsity, potential biases due to zero entries, and limited generalizability beyond the Dutch optical retail market. This research offers insights for retail marketing, particularly for the optician industry, in designing effective RDM (with and without incentives) campaigns tailored to customer characteristics to improve retention and increase spending.

Date of Award	2 Jul 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Saeid Vafainia (Supervisor) & Peter V. Rajsingh (Co-Supervisor)