Abstract Modeling is useful for locating prospects. But, models only work if customer response is related to demographic factors which can be obtained about the prospects. In most cases, this is not true. For customer communications, using purchase history directly is preferable to modeling.
Purchase history includes the products or services bought, and the transaction history.
Product purchase history is used to make relevant offers to customers. Transaction history predicts which customers are most likely to respond to a promotion. The paper concludes with a detailed description of the information that can be learned from transaction history, and shows how its use produces profits far greater than could be produced by use of a model. Many companies are using models successfully to improve their response rates and profits in marketing to outside prospect lists. For example, if you are selling encyclopedias through the mail, you may rent a list of parents of high school students.