An empirical measure of the availability, completeness and reliability of voluntarily disclosed personal information for direct marketing purposes

Received (in revised form): 11 July 2006

G.S. Robertshaw*
is a Marketing Manager and a Fellow of the Institute of Direct Marketing.

N.E. Marr
is Professor of Marketing at the Hudderseld University Business School.

Abstract The self-disclosure of individual-level consumer information for direct marketing purposes, such as interests, opinions, beliefs, competitor spending habits and future purchase intentions, is voluntary in nature. This raises the prospect that such information may be to some extent incomplete and unreliable. However, the availability, completeness and reliability of voluntarily disclosed personal information for direct marketing purposes has received little attention in the literature. This represents an important omission because all modern personalised targeting models such as neural networks, and all customer proling and data appending practices, typically incorporate voluntarily disclosed individual-level information. Accordingly, the ability of the direct marketing industry to gather and use such information will exercise an increasingly prominent role in sustaining and extending its competitive position. Using 256 personal interviews and a case study, this paper quanties typical levels of abstention from personal information disclosure, and omission and falsication of such disclosures, and considers the implications for direct marketing practice. Journal of Financial Services Marketing (2006) 11, 8594. doi:10.1057/palgrave.fsm.4760018

BACKGROUND
Market fragmentation and greater consumer eclecticism have accelerated the abandonment of mass marketing methods in favour of personalised marketing programmes that better meet the needs of the individual.13 In the post-modern era, attempting to match one umbrella positioning strategy to the needs of assumed amorphous consumer groups will inevitably be less successful than developing multiple personalised strategies.46

*Correspondence: 15 Heron Close, Mountain, Queensbury, Bradford, West Yorkshire BD13 1NR, UK

This shift towards personalised forms of marketing has been accentuated by the advent of digital communication channels, including the internet, interactive television and mobile telephones, allowing the direct marketing industry to increasingly communicate and interact with individual consumers on a real-time basis.7,8 In tandem, rapidly improving database technology has facilitated the faster storage, processing and modelling of vast amounts of complex individual-level consumer information.9,10 Single decisions to target one market segment are now being superseded by millions of independent automated decisions

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to communicate with individual consumers at an appropriate time. Mass marketing communications in single batches personalised to meet the specic requirements of the individual consumer are now both possible and protable.1113 Given its unique ability to recognise, acknowledge, appreciate and serve the interests and needs of selected consumers whose individual identities and proles can be acquired, fragmenting markets have become a source of incremental competitive advantage for the direct marketing industry.14 The evolution of personalised marketing programmes is, however, dependent on the availability of up-to-date and detailed, individual-level consumer information. While individual-level transactional data can be obtained from customer records, the acquisition of detailed non-transactional information relating to interests, beliefs, values, opinions, competitor spending habits, future purchase intentions, religion, political afliation, television viewing habits and a multitude of other lifestyle characteristics essentially relies on voluntary consumer disclosure. LIMITATIONS IN THE AVAILABILITY OF VOLUNTARILY DISCLOSED PERSONAL INFORMATION The collection of non-transactional, individual-level information for direct marketing purposes is based on the premise that consumers can be persuaded to voluntarily disclose personal details as a result of some type of marketing exchange process. This is usually in anticipation of some perceived benet. These exchanges include surveys and questionnaires, direct mail and telephone orders, loyalty cards, product warranty cards, replies to direct response ads, sweepstake promotions, rebate and redemption offers.15 The experience of companies collecting individual-level consumer information within the UK market has demonstrated that a

majority of consumers are prepared to disclose such information in various different forms,1619 subject to adequate data protection safeguards and evidence of benets arising from disclosure.20 In terms of benets sought, a recent DMA report21 revealed these to be principally more relevant offers and personalised levels of service. In the UK alone, millions of consumers voluntarily disclose personal information for direct marketing purposes each year, and the size and wealth of the accumulated information continues to grow. Although the amount and depth of individual-level consumer information being gathered by businesses continues to expand, this still represents only a proportion of the consumer universe. Clearly, there exists an inherent limitation on the number of consumers who are prepared to voluntarily disclose personal information for direct marketing purposes, which places a limit on the ability of the direct marketing industry to engage in personalised consumer communications. INCOMPLETE AND SPURIOUS PERSONAL INFORMATION DISCLOSURES Companies offering credit facilities, including retailers, credit card and mail order companies, often set initial credit limits on new applicants based on self-reported income and other variables such as date of birth, marital status, employment status, time at current address, residential status, occupation, time in occupation and other credit cards held. A company using individual-level consumer information that is to some degree incomplete or spurious may encounter increased bad debt and payment default propensities as a consequence of inaccurate initial credit limits from incorrectly targeted communications.22 Specialist motor insurance companies also depend on the reliability of voluntarily disclosed personal information when

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targeting new customers according to specic underwriting criteria. These underwriting criteria are used to establish insurance premium levels and include an individuals postcode, vehicle make and model, occupation and date of birth. The use of incomplete or spurious information leads to the targeting of misclassied market segments, thereby reducing the effectiveness of the direct marketing communication. The adverse effects of spurious and omitted personal information disclosures on company protability are not limited to the targeting of new customers. Transactional data alone are insufcient in understanding purchase behaviours because that data provide little insight into the needs that motivate and shape the purchase process, and lack detail such as competitor spend and future purchase intentions.23 Accordingly, many companies are now appending externally acquired individual-level information to their transactional databases in an attempt to learn more about their customers. Again, omissions and inaccuracies in the acquired information potentially lead to misclassication of customers in the database and personalisation error. As a consequence, companies cannot be as precise in their customisation, which ultimately diminishes the efciency of the direct marketing effort. The importance of the completeness and reliability of personal information must also be counterbalanced with the need to ensure that the information gathered improves strategic thinking. Redundant and irrelevant information can further dilute the effectiveness of targeted marketing campaigns.24,25 METHODOLOGY The objectives of this study were to quantify typical levels of abstention from the voluntary disclosure of personal information for direct marketing purposes, and to quantify the incidence of omission and falsication of such disclosures.

It was noted that those consumers who abstained from the disclosure of personal information for direct marketing purposes were naturally least likely to respond to mail and telephone surveys; the results of such surveys would tend to be biased towards contributors of personal information.26 While in-depth, multi-culture interviews with less direct questioning may have yielded more detailed and insightful results, personal interviews were chosen as a data collection method given their ease of use and suitability for target population stratication, while facilitating complete and clear question responses. The personal interviews were conducted in a busy West Yorkshire city centre. Throughout, reassurance of condentiality of the results was emphasised and the interviews proceeded in a conversational manner. Responses were collected in writing during the interviews and consistency in manner of question presentation and surroundings was maintained to reduce the context dependency of responses; for example, the immediate environment, interviewee mood, comfort and recent experience. All individuals who disclosed personal information for direct marketing purposes formed the basis of the target population. In recognition that personal interviews typically have a higher degree of geographic respondent locality and the potential for introducing non-coverage issues such as response-bias,27 the target population was dened using a proportionately stratied, nationally representative sampling frame. The target population was stratied based on three age bands and gender, comprising a total of six strata. Approximately, one-third of the target population was assigned to each age band to ensure that the six strata were similar in size. This allowed interviewees to be assigned to each stratum without the requirement for weighting. Quota sampling as a method of stratication was dismissed because the

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selection process within strata relies on the discretion of the interviewer. While being an easier method of conducting interviews, this method is more unreliable and prone to bias because it is essentially non-random in nature. Individuals were therefore approached as potential interviewees on a random basis, regardless of gender, age, outward appearance and whether alone or in a group. In those cases where an interview commenced and the interviewee stated that he or she did not disclose personal information for direct marketing purposes, no further questioning in respect of omission and falsication was undertaken. Where a group of two or more individuals was approached, the rst individual electing to participate was chosen and this individual was then asked to answer questions in isolation and far enough in distance that responses could not be heard, preventing third-party inuence. This was an important procedure, because respondents may otherwise have been tempted to answer in a manner that gave them credibility in the presence of onlookers, rather than providing truthful responses. A total of 256 personal interviews were conducted to ensure that an adequate, proportionately stratied sample frame was obtained. Table A1 shows the national proportion of individuals within each genderand age-dened stratum, and Table A2 shows the actual proportion of interviewees obtained per stratum. As expected, the proportions of interviewees per stratum broadly corresponded to that of the national population. It was noted that nationally representative results typically involve sample sizes in excess of 1,000 respondents.28 The results obtained from this study, therefore, involved a sample size that could not be generalised across the national population. Accordingly, the results of this study must be regarded as indicative in nature rather than conrmative.

The personal interviews began by informing interviewees of common direct marketing data gathering practices, including consumer surveys and questionnaires, warranty card surveys, telephone and internet registrations, and loyalty card applications. Interviewees were then asked Do you disclose personal information for direct marketing purposes? allowing the relative proportions of contributors and abstainers to be established. Those interviewees who indicated that they did disclose personal information for direct marketing purposes were asked to rate their typical frequency of omission on a vepoint scale through the question: When disclosing personal information, how many of the questions do you typically complete? (i) All of them, (ii) More than half, (iii) Roughly half, (iv) Less than half and (v) Hardly any. In determining the number of scale points to employ in the measurement process, the ability of interviewees to make discriminations on the construct was a major consideration since too many scale points can become unwieldy, thereby losing relevance. It is also the case that too many points can become burdensome to respondents in multiple measures of a construct increasing the likelihood of response error. A further consideration was the decision on whether to employ an odd or even number of scale points, since the absence of a mid-point on even number scales fails to provide respondents with an expression of neutrality. The benets of employing a ve-point scale included a mid-point for the expression of neutrality and an acceptable level of construct discrimination that minimised the potential for response error. Next, interviewees were reassured of condentiality at this stage due to the sensitive nature of the questioning, and were encouraged to be as truthful as possible in their responses, before being asked to rate

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their level of falsication on a ve-point scale through the question: How often do you knowingly provide false information? (i) Never, (ii) Not very often, (iii) Sometimes, (iv) Often and (v) Very often. RESULTS AND DISCUSSION Incidence of abstention from personal information disclosure A total of 157 interviewees (61 per cent) reported that they voluntarily disclosed some form of personal information for direct marketing purposes, while 99 interviewees (39 per cent) abstained. Although the results could not be generalised across the national population due to the sample size employed, this nding suggested that there existed a substantial proportion of consumers within the general population who were unwilling to voluntarily disclose personal information. It should be noted that incidences of personal information omission and falsication could only be measured against the 157 interviewees who stated that they voluntarily disclosed such information for direct marketing purposes. Prevalence of omissions Table A3 shows that only a minority (15 per cent) of interviewees typically disclosed all information requested. While 78 per cent completed half or more of the questions posed, a small minority (9 per cent) reported that they completed hardly any questions. Essentially, these ndings indicated that the majority of personal information disclosed for direct marketing purposes is, to varying degrees, incomplete. The hypothesis that there is a skew in consumers propensity to omit specic details when disclosing personal information for direct marketing purposes was assessed using the goodness-of-t 2 test.

Null hypothesis (H0):

There is no skew in consumers propensity to omit specic details when disclosing personal information for direct marketing purposes. There is a skew in consumers propensity to omit specic details when disclosing personal information for direct marketing purposes.

Alternative hypothesis (HA):

Table A3 provides a 2 value of 36.3. Two levels of signicance ( ) were assessed: 5 and 1 per cent, using 4 degrees of freedom ( ) calculated as k 1, where k is the number of categories. The following critical values ( ) were obtained:
20.05, 4 = 9. 5 20.01, 4 = 13 .3

At both levels of signicance the null hypothesis was rejected, supporting the alternative hypothesis that there is a skew in consumers propensity to omit specic details when disclosing personal information, towards lower levels of such information typically being omitted. Prevalence of falsication Table A4 shows that only a minority (46 per cent) of interviewees never knowingly disclosed false personal information. However, a total of 76 per cent of interviewees either never or not very often falsied personal information, indicating that the general incidence of corrupted information was relatively low. The hypothesis that there is a skew in consumers propensity to falsify specic details when disclosing personal information for direct marketing purposes was assessed using the goodness-of-t 2 test.

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Null hypothesis (H0):

There is no skew in consumers propensity to falsify specic details when disclosing personal information for direct marketing purposes. There is a skew in consumers propensity to falsify specic details when disclosing personal information for direct marketing purposes.

(1.96) and the 1 per cent level (2.58) using the formula:
r(n-2) (1-r2)

Alternative hypothesis (HA):

Table A4 provides a 2 value of 98.9. Two levels of signicance ( ) were assessed: 5 and 1 per cent, using 4 degrees of freedom ( ) calculated as k 1 where k is the number of categories. The following critical values ( ) were obtained:

0.05, 4 = 9. 5 20.01, 4 = 13 .3 2

where r is Pearsons correlation coefcient and n is the sample size. A result of + 7.00 was obtained, conrming a strong correlation between the propensity to omit and falsify personal information; where there was a high incidence of omitted information, there was a correspondingly greater level of falsication. Hypothetical illustration of the effect on company protability The quantitative ndings from the study were applied to an actual targeting model used by a UK motor insurance company to determine what effect limitations in the gathering of individual-level consumer information had on the companys protability. For reasons of commercial condentiality, the identity of the company is not disclosed. Consistent with standard practice across the industry, the company relied on buying external lists containing detailed, voluntarily disclosed personal information to target new customers whose characteristics met specic underwriting criteria. These criteria were used to establish premium levels based on risk and included the drivers occupation, postcode, vehicle make and model, date of birth and insurance renewal date. Inaccuracy in the individual-level consumer information that the motor insurance company used to target new customers was directly manifested as reduced company protability. For example, the drivers age and occupation were key determinants of motor insurance risk and claim propensity. An inaccurate date of birth or occupation would result in the quoting an incorrect insurance premium. Where

At both levels of signicance the null hypothesis was rejected, supporting the alternative hypothesis that there is a skew in consumers propensity to falsify specic details when disclosing personal information for direct marketing purposes, towards lower levels of such information being falsied. Incidences of personal information falsication were much lower than that for omission. Relationship between omission and falsication of personal data Pearsons correlation coefcient was used to ascertain if a relationship existed between interviewee propensity to omit and falsify personal information. This correlation has a range of + 1 indicating a perfectly positive relationship and 1 a perfectly negative relationship. A result of + 0.49 was obtained. This positive correlation was tested for statistical signicance at the 5 per cent level

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inaccuracy pervaded, several aspects of the acquired individual-level consumer information, for example, incorrect date of birth, occupation and vehicle type, then the problem was further exacerbated. Conversion rates, as dened by number of policies sold against premium quotations, were 28 per cent within the companys targeted competitive segment. Outside of this segment, conversion rates stood at just 7 per cent. The company concerned typically mailed 3,200,000 prospective new customers by post over a 12-month period using acquired individual-level consumer information timed to coincide with the recipients stated motor insurance renewal date. The total volume of individual-level consumer information bought from external lists stood at 5,350,000 records. Duplicate records, existing customers and mailing preference service registered individuals were then removed. Records where the drivers occupation, postcode, vehicle make and model, date of birth or insurance renewal date had been omitted were also removed. Following these procedures, the volume was reduced from 5,350,000 to a net of 3,200,000 records. Response rates to the mailing were typically 2 per cent. Hypothetically, if all 3,200,000 million prospective customers fell within the companys most competitive market segment based on the assumption that the individuallevel consumer information used was wholly accurate and complete, the company would have expected to acquire the following number of policies:
3,200,000 x 2% x 28% = 17,920

The mean policy premium stood at 325, equating to a gross written premium of 5,824,000. The ndings of this study suggest that only 61 per cent of consumers voluntarily disclose personal information for direct marketing purposes. Ignoring the omission of specic types of information such as date of birth, the

incidence of abstention from voluntary disclosure of personal information alone would have reduced the total available mailing universe from 5,245,902 to 3,200,000, a 61 per cent reduction. Theoretically, unavailable individual-level consumer information therefore reduced the potential mailing universe by 2,045,902. Applying the same 2 per cent response rate and 28 per cent conversion to policy rate, this represented 11,457 fewer potential policies and a reduction in gross written premium of 3,723,525. Clearly, the willingness of consumers to voluntarily disclose personal information coupled with the omission of specic types of information directly inuenced the companys potential policy revenues. Unavailable and incomplete personal information essentially represented lost opportunities. The insurance company also relied on the integrity of the individual-level consumer information it used to target new customers, a practice common to other companies operating in this area. This study suggests that 12 per cent of consumers often or very often falsify voluntarily disclosed personal information for direct marketing purposes. Although not directly provable, it would be reasonable to assume that this falsication would apply to some element of the underwriting criteria of drivers occupation, postcode, vehicle make and model, date of birth and insurance renewal date. This being the case, 12 per cent of the 3,200,000 mailed records would not fall within the companys target market, equating to 384,000 records. As these 384,000 records would fall outside of the companys most competitive segment, these would convert from quotation to policy at a rate of just 7 per cent. Under these conditions, the following number of policies would be acquired:
[(3,200,000 x 88%) x 2% x 28%] + [(3,200,000 x 12%) x 2% x 7%)] = 16,307

At a mean policy premium of 325, the gross written premium would then become

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5,299,775. This represents a reduction of 1,613 policies and a loss of 524,225 gross written premium, compared to the situation whereby the personal information used was wholly accurate. If the personal information used to target prospective customers was less than 88 per cent accurate, then the reduction in protability would obviously be more pronounced. A summary of the hypothetical implications is shown in Table A5. While this study has indicated that most voluntarily disclosed personal information typically has low levels of omissions and even lower levels of falsication, these deciencies can correspond to considerable reductions in the efciency of the direct marketing effort. As an illustration, if the availability of complete personal information increased from 61 to 65 per cent and the incidence of falsication was reduced from 12 to 8 per cent, then the expected loss of gross written premium in Table A5 would decrease from 4,247,766 to 3,516,164. Companies offering credit facilities, including retail, credit cards and mail order, often set initial credit limits on new applicants based on self-reported income and other variables. Morgan Stanley, for example, used the following variables to establish initial credit card limits for new customers: date of birth, marital status, employment status, time at current address, residential status, occupation, time in occupation, income, other credit cards held, hobbies and interests.29 Falsication of one or more of these variables has a direct inuence on company protability because increased bad debt and payment default propensity are consequences of inaccurate initial credit limits.30 Another example of the deleterious effect of incomplete and unreliable voluntarily disclosed personal information affecting company protability is falsication or omission of date of birth, a variable that is not available through geodemographic classication systems. Date of birth and life

stage are important determinants of purchase behaviour.31 In particular, mail order companies use voluntarily disclosed personal information to target new customers with catalogue offers reecting specic age groups, since these different age groups often exhibit distinct life-stagebased purchase behaviours. Catalogues are printed and inventory ordered in anticipation of demand from different age groups, representing a signicant advance commitment. The mail order company Redcats, for example, offers the Empire brand to middle-aged consumers, Vertbaudet to young families, Redoute to younger, afuent consumers and Daxon to retired consumers. Misclassication of individuals due to omitted or falsied date of birth affects the relevance of the catalogue offer and sales volumes and subsequent protability.32 CONCLUSION The nding that a sizeable minority (39 per cent) of consumers abstain from voluntarily disclosing personal information for direct marketing purposes is in broad agreement with prior studies and with that of industry practitioners. Among those consumers who do volunteer personal information for direct marketing purposes, there is a signicant skew towards typically lower levels of information omission and falsication. Within this, consumers appear much more likely to omit than to falsify such information. Overall, however, 85 per cent of interviewees typically omitted some information, 54 per cent acknowledged some degree of falsication, and in combination, only 7 per cent of voluntarily disclosed personal information was wholly complete and reliable. A proportion of what is derived from individual-level consumer information thus appears to be uncertain and erroneous, challenging the assumption among industry practitioners that individuals generally

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contribute full and reliable personal information. In addition, the incidence of personal information omission appears to be directly related to the incidence of falsication. Levels of omitted personal information can therefore serve as a useful indicator of levels of falsication. This is an important point because, while it is relatively easy to determine levels of omitted information, no obvious mechanism exists for establishing reliability. Where companies encounter higher levels of omission, it is more likely that the information will also be spurious. Finally, the current study reveals that even modest changes in consumer willingness to voluntarily disclose personal information, and omission and falsication of such information, can have a signicant adverse affect on the efciency of the direct marketing effort. LIMITATIONS The following limitations in the study should be noted. First, since the personal interviews were conducted at a single point of time, the ndings do not reect future-isolated events or changes in social forces that may affect the willingness of consumers to voluntarily disclose personal information, or to omit or falsify disclosures of such information. As a consequence, the results have a limited period of applicability and should be re-tested before being applied to areas of further study. Secondly, the ndings cannot be generalised across the national population due to the sample sizes used. Accordingly, the studys ndings are indicative in nature, rather than laying claim to being conclusive or conrmative. The study thus identies an overlooked problem and provides an indication of the scope of this problem. However, a more detailed quantitative analysis of the relationship between requests for particular types of personal information and abstention, omission and falsication propensity would facilitate a better

understanding of the extent to which these limitations are sector specic. FURTHER RESEARCH A more detailed quantitative analysis of the relationship between requests for particular types of personal information and abstention, omission and falsication propensity would facilitate a better understanding of the extent to which these limitations are nancial services specic. An inter-disciplinary qualitative collaboration with the eld of consumer psychology is advocated to gain added insights into the motivations and beliefs that led consumers to abstain from disclosing personal information, and to omit and falsify specic types of information. REFERENCES
1 Wind, J. and Rangaswamy, A. (2001) Customerisation: The next revolution in mass customisation, Interactive Marketing: The International Journal of the Institute of Direct Marketing, Vol. 15, No. 1, pp. 1332. Dibb, S. (2002) Banks, customer relationship management and barriers to the segment of one, Journal of Financial Services Marketing, Vol. 6, No. 1, pp. 1024. Radford, M. (2004) Personal nancial services in a digital age, Journal of Consumer Behaviour, Vol. 2, No. 3, pp. 287296. Dawes, J. and Swailes, S. (1999) Retention sans frontieres: Issues for nancial service retailers, International Journal of Bank Marketing, Vol. 17, No. 1, pp. 3643. Peltier, J. and Schribrowsky, J. A. (1997) The use of needbased segmentation for developing segment-specic direct marketing strategies, Journal of Direct Marketing, Vol. 11, No. 4, pp. 5363. Pitta, D. A. (1998) Marketing one-to-one and its dependence on knowledge discovery in databases, Journal of Consumer Marketing, Vol. 15, No. 5, pp. 468480. Courtheoux, R. J. (2000) Database marketing connects to the internet, Interactive Marketing: The International Journal of the Institute of Direct Marketing, Vol. 2, No. 2, October/ December, pp. 129137. Dibb, ref. 2 above. Harrison, T. (1994) Mapping customer segments for personal nancial services, International Journal of Bank Marketing, Vol. 12, No. 8, pp. 1725. Kahan, R. (1998) Using database marketing techniques to enhance your one-to-one marketing initiatives, Journal of Consumer Marketing, Vol. 15, No. 5, pp. 491493. Zineldin, M. (2000) Beyond relationship marketing: Technologicalship marketing, Marketing Intelligence and Planning, Vol. 18, No. 1, pp. 923.

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Wind and Rangaswamy, ref. 1 above. Dibb, ref. 2 above. McCorkell, G. (1998). How Marketing Went Direct. The Direct Marketing Guide, The Institute of Direct Marketing, Volume 1, Teddington. Fairlie, R. (1998). Using Customers Demographic and Psychographic Proles. The Direct Marketing Guide, The Institute of Direct Marketing, Volume 1, Teddington. The Henley Centre. (1995) Quoted in The Direct Marketing Guide, Vol. 1, Chapter 1.1, p. 9. Croft, M. (1997) Facts of life (lifestyle databases), Marketing Week, May 1, pp. 4345. Reed, D. (1999) Consumer lifestyle data, Precision Marketing, 8th February. Gofton, K. (1999) Data rms react to survey fatigue, Marketing, 29th April. Kleinman, M. (1999) News analysis, Precision Marketing, 16th November. Direct Marketing Association. (2004) DMA launches top line ndings of its survey into consumer attitudes towards direct marketing. dma.org.uk14th December. Robertshaw, G. S. (2005) What are the Limitations in the Gathering of Individual-level Consumer Information for Direct Marketing Purposes?, PhD Thesis, Hudderseld University Business School, Hudderseld.

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Peltier and Schribrowsky, ref. 5 above. Mintzberg, H. (1994) The rise and fall of strategic planning, Harvard Business Review, JanuaryFebruary, pp. 107114 Stone, M., Foss, B., Henderson, I., Irwin, D., ODonnell, J. and Woodcock, N. (2003) The quality of customer information management in customer life cycle management, Journal of Database Marketing, Vol. 10, No. 3, pp. 240254. Lehman, D. R., Gupta, S. and Steckel, J. H. (1998). Marketing Research. Addison-Wesley, New York. Ibid. Ibid. Morgan Stanley. (2004) On-line Credit Card Application, www.morganstanleycard.co.uk. Robertshaw, G. S. (2000) The segmentation and targeting of consumers within the fragmenting UK mail order market, Journal of Segmentation in Marketing, Vol. 4, No. 1, pp. 2751. Wilkes, R. E. (1995) Household life-cycle stages, transitions, and product expenditures, Journal of Consumer Research, Vol. 22, June, pp. 2743. Redcats. (2004) Unpublished Customer Acquisition Plan.

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Table A3 Incidence of omissions in disclosed personal data Response All of them More than half Roughly half Less than half Hardly any Total Observed number 24 49 50 20 14 157 Percentage 15 31 32 13 9 100 Expected number 31.4 31.4 31.4 31.4 31.4 157.0

APPENDIX
Table A1 National proportion of individuals per stratum Age group 1834 3554 55 and over Male (%) 14 18 16 Female (%) 16 18 18

Table A4 Table A2 Actual proportion of interviewees per stratum Age group Male Percentage Female Percentage of total of total (%) (%) 13 17 17 42 49 44 17 19 17 Response

Incidence of personal data falsication Observed number 8 12 17 47 73 157 Percentage 5 7 11 30 46 100 Expected number 31.4 31.4 31.4 31.4 31.4 157.0

1834 33 3554 44 55 and over 44

Very often Often Sometimes Not very often Never Total

Table A5 Hypothetical effect on gross written premium Gross written premium Potential mailing universe Actual mailing universe due to abstainers and omissions Falsication of personal information Missed customisation opportunities as a consequence of ignoring intra-demographic values variation Expected loss of gross written premium 5,245,902 3,200,000 9,547,541 5,824,000 Loss of gross written premium 3,723,541 524,225 Not directly quantiable 4,247,766

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