BACKGROUND: Dynamic Resource Group (DRG) owns three publishing companies including Annie's Attic and The Needlecraft Shop, located in Big Sandy, Texas, and House of White Birches, based in Berne, Indiana. Together they specialize in craft and home markets with 20 consumer magazines, 20 continuity programs, 10 hardcover book series and two catalogs. DRG also owns the Strategic Fulfillment Group in Big Sandy, which handles all of the fulfillment for the three publishing companies and other outside clients.
PLATFORMS: DRG runs Model 1 from Group 1 Software on a 233 MHz laptop running Windows 98. We have three copies of the response module.
PROBLEM SOLVED: DRG markets numerous niche products that are in related markets with lots of cross-selling opportunities. DRG's challenge was to effectively select customers for direct mail offers based on detailed and varied order histories. It was imperative that the chosen solution allow the marketing staff to develop model-based selections since the IS staff is consistently backlogged with other requests. The solution needed to be easy to use and provide accurate models that actually worked in the field.
PRODUCT FUNCTIONALITY: Model 1's Response Modeler allows DRG's non-statisticians to build predictive models and assess the results for reasonableness prior to a field test. The modeling is quick and easy. Response Modeler automatically generates reports that provide in-depth understandings of customer behavior. Some reports are particularly useful for providing insight into new variable creation, which is facilitated by a robust set of mathematical and statistical macros. DRG's full customer files are on an AS/400. Mainframe scoring is well supported via the creation of a run-time model (RTM) file. The RTM contains the model and all variable transformations. It is easily exported by Model 1 and given to IS for the scoring process. Finally, a sample file of scored names is profiled to confirm the accuracy of the selection prior to implementing the full campaign.
STRENGTHS: Model 1 does what it's supposed to do it provides good results, is extremely easy to use and creates very useful reports. DRG has used Model 1 for dozens of mailings and is very happy with the results. In terms of usability, its wizards quickly walk the user through the entire modeling process from data import, variable profiling, model building and evaluation to file scoring. Model 1 also builds models very quickly. Old models can be quickly refreshed by simply opening a saved session and relinking the application to the new data file. New models are available in as little as five minutes.
WEAKNESSES: If new variables are added to a file, requiring a a revised data dictionary, the calculated variables have to be rebuilt when using a previously saved session to refresh a model. This, however, is only a problem if the saved session contained calculated or derived variables.
SELECTION CRITERIA: Model 1 is flexible and easy to use. While evaluating software solutions, I attended a Direct Marketing Association (DMA) sponsored data mining class. I learned that while many different types of algorithms can be used, it is best to keep it simple and use more straight-forward algorithms if they prove to work well. While Model 1 has multiple algorithms such as neural networks and decision trees, I have found that linear regression works very well for me. Some of the other applications I reviewed were limited to neural networks.
DELIVERABLES: DRG utilizes Response Modeler's Variable Profile Report two ways to learn more about their customers and to create and refine new predictive variables. The Model Sensitivity Report shows DRG which variables are most predictive. The Model Performance Report automatically shows the lift being provided by each model built. The RTM file allows DRG to quickly and easily score the mainframe-based customer file.
VENDOR SUPPORT: Group 1 did an excellent job representing Model 1's capabilities during the sales process. The software has an install wizard that makes installation a breeze. The technical support staff has been very responsive. If a problem occurs, they always find a solution that keeps me on schedule.
DOCUMENTATION: The software is so easy to use that there haven't been many times when I had to rely on the documentation. However, when I do, I find it is very helpful, easy to understand and covers 90 to 95 percent of my issues.
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