Regression analysis pays off in the end - direct marketing - Folio: Plus - Brief Article

Folio: The Magazine for Magazine Management, Oct 15, 1993

With more emphasis being put on efficient direct marketing these days, publishers are trying out more variables. Testing should not be limited to copy, offers and lists, advises Robert Teufel, president of Emmaus, Pennsylvania-based Rodale Press. If you're going to spend money testing anything, it should be on regression analysis, he says.

Regression analysis is the statistical process of predicting customer behavior when customers receive promotional material. It estimates the probability of consumer response, pay-up, and sometimes even the monetary value of their response. Teufel contends that regression analysis is the most productive variable a direct-response marketer can approach. "Every once in a while you can do a copy test or try a new list that doubles response," he says, "but over a period of time you'll definitely see the most projectable and predictable and consistent gains in your direct marketing from regression analysis." On average, regression analysis will yield a 40 percent increase in response over time, he contends. Rodale uses the method on all of its magazines and book offerings and has been doing regression analysis for 15 years; Reader's Digest Association has been doing it even longer. While the big publishing companies are involved in regression analysis, the smaller ones aren't, and Teufel is not sure why. "Maybe they don't understand it or don't see the value in it," he says. "But so many service bureaus offer regression analysis now--and it's so accessible--that everyone should do it."