How the ‘New’ Fingerhut Refurbished its Customer Database
Last year, Fair Isaac built a prospect database for Fingerhut, which gave the cataloger “a wealth of information it didn’t have before,” Johnson said. As a result, Fingerhut will mail more than 65 million new customer acquisition catalogs this year. The company has doubled its circulation and acquisition rate without negatively impacting response.
Fingerhut increased its growth of names, acquiring 62 percent last year and 41 percent this year, Johnson revealed. New customer sales as a percentage of the cataloger’s total sales were 28 percent last year and 32 percent this year.
“The best part of a prospecting database,” Fingerhut’s Schlundt said, “is you don’t use just one piece of information, but two, three or four pieces and a model that’s been very successful. We have that added variable because we sell on credit. And for most of our customers, the credit offer is the enticing thing. We define people, then give them the offer associated with their credit risk. Then we capture the transaction amount based on their risk profile.”
Fingerhut’s next step is optimization. Fair Isaac is building out contact streams, building a decision model to optimize profitability, Johnson pointed out. “The big thing with optimization,” she noted, “is to understand action/reaction dynamics.”