The multivariable techniques most prevalent in direct marketing research today for modeling response to a mailing (responders versus non-responders) are multiple regression, discriminant analysis, and AID (abbreviations are explained in the Introduction). This article shows why these traditional approaches may provide erroneous and misleading results for direct marketing use, which tend to be corrected by newer, more statistically appropriate methods, known as CHAID, logit, and log-linear models. We conclude with an application of the CHAID technique that resulted in a substantial lift in response for an Amoco Oil Company promotion to its credit card file.
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