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March 30, 2004
Capital Ones 80,000 Tests
Capital One just cant do enough market tests. Indeed, it conducted 80,000 of them in 2003 on everything from marketing copy to price points to credit lines. The company, which posted revenue of more than $9.8 billion and net income of more than $1.1 billion last year, relies on this extraordinary diligence to ensure it is effectively gauging customer priorities and preferences.
The company claims it differentiates its marketing operations on three dimensions: 1) state-of-the-art technology; 2) rigorous testing and analysis of products, segments and consumer behaviors; and 3) flexible operations and services that enable the organization to capitalize on the intelligence it generates and pursue new opportunities.
As a statistician, I love this because it gives us the rigor of testing appropriately and doing predictive modeling [to ensure success] going forward," said Dave Jeppesen, VP of Capital One's Direct Marketing Center in a recent keynote speech at the National Center for Direct Marketing winter conference in Orlando. "We are going after the holy grail of direct marketing -- to get the right product on the right terms to the right customer at the right time through the right channel. We believe we are pretty far along."
One sophisticated, data-driven campaign enabled the company recently to determine it was sensible to increase customer credit lines and offer an extremely low fixed rate (4.99 percent) on a new card. "We saw $3 billion come onto our books because of one offer in one quarter," says Jeppesen. "It was because of the insight we found through use of our technology."
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