9. Table 3 below summarizes key results for two groups: MAIL = No for those customers

whose predicted probability of buying 'The Art History of Florence' was less than the

breakeven rate, and MAIL = Yes for those customers whose predicted probability is

greater than or equal to the breakeven response rate. Included in the table are:

i) the number of customers in each group

ii) the number of buyers of "The Art History of Florence" in each group

iii) the response rate (equal to #buyers divided by # customers) for each group

iv) % of total customers - shows the % of total customers in each group

v) % of total buyers - shows the % of total buyers in each group

What would the gross profit (in dollars, and also as a % of gross sales) and return on

marketing have been if BookBinders had mailed the "The Art History of Florence" offer

only to customers with a predicted probability of buying greater than the breakeven rate

(i.e. those in the MAIL = Yes group)?

Table 3: Summary Statistics by Group (Profitable vs. Not-Profitable to Target)

Bought "Art History of Florence?"

MAIL Customers

No

Yes

Total

34435

15565

50000

# Buyers

1198

3324

4522

Response

Rate

.03

.21

.09

% of Total

Customers

68.9%

31.1%

100.0%

% of Total

Buyers

26.5%

73.5%

100.0%