IDEAS home Printed from https://ideas.repec.org/a/eee/joinma/v45y2019icp62-80.html
   My bibliography  Save this article

Calling Customers to Take Action: The Impact of Incentive and Customer Characteristics on Direct Mailing Effectiveness

Author

Listed:
  • Vafainia, Saeid
  • Breugelmans, Els
  • Bijmolt, Tammo

Abstract

This study investigates the effect of call-to-action (CTA) direct mailings (DMs) on customers' purchase behavior and how this effect is moderated by incentive type as well as customer characteristics. The authors analyze individual purchase behavior of a panel of 179,525 customers across 40 Dutch optical retailers over 9 years. The empirical results show that CTA DMs that include an incentive have a higher positive impact on customer's purchase probability compared with those without an incentive. Furthermore, non-monetary incentives, especially utilitarian ones, have a higher positive impact than monetary incentives. Our results also show that customer heterogeneity plays an important role in the influence of CTA DMs on purchase incidence. More specifically, CTA DMs have a higher impact on purchase incidence for customers with higher past purchase frequency, lower purchase recency, longer relationship duration and for customers who received DM more recently and frequently. The results of the study provide valuable insights for managers allocating their direct marketing budget: it is better to use non-monetary (preferably utilitarian) incentives and to target customers based on relationship history as well as DM history.

Suggested Citation

  • Vafainia, Saeid & Breugelmans, Els & Bijmolt, Tammo, 2019. "Calling Customers to Take Action: The Impact of Incentive and Customer Characteristics on Direct Mailing Effectiveness," Journal of Interactive Marketing, Elsevier, vol. 45(C), pages 62-80.
    • Handle: RePEc:eee:joinma:v:45:y:2019:i:c:p:62-80
    DOI: 10.1016/j.intmar.2018.11.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1094996818300707
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intmar.2018.11.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    2. Melis, Kristina & Campo, Katia & Breugelmans, Els & Lamey, Lien, 2015. "The Impact of the Multi-channel Retail Mix on Online Store Choice: Does Online Experience Matter?," Journal of Retailing, Elsevier, vol. 91(2), pages 272-288.
    3. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    4. Gilly, Mary C & Zeithaml, Valarie A, 1985. "The Elderly Consumer and Adoption of Technologies," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(3), pages 353-347, December.
    5. Itamar Simonson & Ziv Carmon & Suzanne O'Curry, 1994. "Experimental Evidence on the Negative Effect of Product Features and Sales Promotions on Brand Choice," Marketing Science, INFORMS, vol. 13(1), pages 23-40.
    6. Drèze, Xavier & Bonfrer, André, 2008. "An empirical investigation of the impact of communication timing on customer equity," Journal of Interactive Marketing, Elsevier, vol. 22(1), pages 36-50.
    7. Campbell, Margaret C & Keller, Kevin Lane, 2003. "Brand Familiarity and Advertising Repetition Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(2), pages 292-304, September.
    8. Peter Ebbes & Dominik Papies & Harald J. van Heerde, 2011. "The Sense and Non-Sense of Holdout Sample Validation in the Presence of Endogeneity," Marketing Science, INFORMS, vol. 30(6), pages 1115-1122, November.
    9. Füsun F. Gönül & Frenkel Ter Hofstede, 2006. "How to Compute Optimal Catalog Mailing Decisions," Marketing Science, INFORMS, vol. 25(1), pages 65-74, 01-02.
    10. Datta, H. & Foubert, B. & van Heerde, H.J., 2014. "The challenge of retaining customers acquired with free trials," Other publications TiSEM 7bc7f195-f655-43cd-9232-7, Tilburg University, School of Economics and Management.
    11. Feld, Sebastian & Frenzen, Heiko & Krafft, Manfred & Peters, Kay & Verhoef, Peter C., 2013. "The effects of mailing design characteristics on direct mail campaign performance," International Journal of Research in Marketing, Elsevier, vol. 30(2), pages 143-159.
    12. Karen Gedenk & Scott A. Neslin & Kusum L. Ailawadi, 2010. "Sales Promotion," Springer Books, in: Manfred Krafft & Murali K. Mantrala (ed.), Retailing in the 21st Century, pages 393-407, Springer.
    13. Ruth N. Bolton, 1998. "A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction," Marketing Science, INFORMS, vol. 17(1), pages 45-65.
    14. Roland T. Rust & Peter C. Verhoef, 2005. "Optimizing the Marketing Interventions Mix in Intermediate-Term CRM," Marketing Science, INFORMS, vol. 24(3), pages 477-489, December.
    15. Thomas, Suman Ann & Feng, Shanfei & Krishnan, Trichy V., 2015. "To retain? To upgrade? The effects of direct mail on regular donation behavior," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 48-63.
    16. Gavan J. Fitzsimons & Donald R. Lehmann, 2004. "Reactance to Recommendations: When Unsolicited Advice Yields Contrary Responses," Marketing Science, INFORMS, vol. 23(1), pages 82-94, September.
    17. Naik, P. & Piersma, N., 2002. "Understanding the role of marketing communications in direct marketing," Econometric Institute Research Papers EI 2002-13, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    18. Prins, R. & Verhoef, P.C., 2007. "Marketing Communication Drivers of Adoption Timing of a New E-Service among Existing Customers," ERIM Report Series Research in Management ERS-2007-018-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bao, Jingyuan & Durango-Cohen, Elizabeth J. & Levontin, Liat & Durango-Cohen, Pablo L., 2022. "Analysis of factors influencing recurring donations in a university setting: A compound poisson mixture regression model," Journal of Business Research, Elsevier, vol. 151(C), pages 489-503.
    2. Saeid Vafainia & Els Breugelmans & Tammo H. A. Bijmolt, 2021. "Evaluating the impact of VAT-free promotion: the role of loyalty program membership and category characteristics," Marketing Letters, Springer, vol. 32(4), pages 455-476, December.
    3. Liguo Lou & Yongbing Jiao & Joon Koh, 2021. "Determinants of Fan Engagement in Social Media-Based Brand Communities: A Brand Relationship Quality Perspective," Sustainability, MDPI, vol. 13(11), pages 1-17, May.
    4. Indrayani & Chablullah Wibisono & Sanni Aritra & Iskandar Muda, 2019. "Customer Satisfaction as Intervening Between Use Automatic Teller Machine (ATM), Internet Banking and Quality of Loyalty (Case in Indonesia)," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(6), pages 54-66, October.
    5. Goic, Marcel & Rojas, Andrea & Saavedra, Ignacio, 2021. "The Effectiveness of Triggered Email Marketing in Addressing Browse Abandonments," Journal of Interactive Marketing, Elsevier, vol. 55(C), pages 118-145.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Risselada, Hans & Verhoef, Peter C. & Bijmolt, Tammo H.A., 2010. "Staying Power of Churn Prediction Models," Journal of Interactive Marketing, Elsevier, vol. 24(3), pages 198-208.
    2. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    3. Blattberg, Robert C. & Malthouse, Edward C. & Neslin, Scott A., 2009. "Customer Lifetime Value: Empirical Generalizations and Some Conceptual Questions," Journal of Interactive Marketing, Elsevier, vol. 23(2), pages 157-168.
    4. Kim, Jungkeun, 2019. "The impact of different price promotions on customer retention," Journal of Retailing and Consumer Services, Elsevier, vol. 46(C), pages 95-102.
    5. Lesscher, Lisan & Lobschat, Lara & Verhoef, Peter C., 2021. "Do offline and online go hand in hand? Cross-channel and synergy effects of direct mailing and display advertising," International Journal of Research in Marketing, Elsevier, vol. 38(3), pages 678-697.
    6. George, Morris & Kumar, V. & Grewal, Dhruv, 2013. "Maximizing Profits for a Multi-Category Catalog Retailer," Journal of Retailing, Elsevier, vol. 89(4), pages 374-396.
    7. Gázquez-Abad, Juan Carlos & Canniére, Marie Hélène De & Martínez-López, Francisco J., 2011. "Dynamics of Customer Response to Promotional and Relational Direct Mailings from an Apparel Retailer: The Moderating Role of Relationship Strength," Journal of Retailing, Elsevier, vol. 87(2), pages 166-181.
    8. Jan Becker & Martin Spann & Timo Schulze, 2015. "Implications of minimum contract durations on customer retention," Marketing Letters, Springer, vol. 26(4), pages 579-592, December.
    9. Mengyuan Zhou, 2022. "Does the Source of Inheritance Matter in Bequest Attitudes? Evidence from Japan," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 867-887, December.
    10. Philipp Afèche & Mojtaba Araghi & Opher Baron, 2017. "Customer Acquisition, Retention, and Service Access Quality: Optimal Advertising, Capacity Level, and Capacity Allocation," Manufacturing & Service Operations Management, INFORMS, vol. 19(4), pages 674-691, October.
    11. Mengyuan Zhou, 2019. "The Effect of the Source of Inheritance on Bequest Attitudes: Evidence from Japan," Keio-IES Discussion Paper Series 2019-018, Institute for Economics Studies, Keio University.
    12. Miguel Godinho de Matos & Pedro Ferreira, 2020. "The Effect of Binge-Watching on the Subscription of Video on Demand: Results from Randomized Experiments," Information Systems Research, INFORMS, vol. 31(4), pages 1337-1360, December.
    13. Jakusch, Sven Thorsten, 2017. "On the applicability of maximum likelihood methods: From experimental to financial data," SAFE Working Paper Series 148, Leibniz Institute for Financial Research SAFE, revised 2017.
    14. Mercedes Esteban-Bravo & Jose M. Vidal-Sanz & Gökhan Yildirim, 2014. "Valuing Customer Portfolios with Endogenous Mass and Direct Marketing Interventions Using a Stochastic Dynamic Programming Decomposition," Marketing Science, INFORMS, vol. 33(5), pages 621-640, September.
    15. Jakusch, Sven Thorsten & Meyer, Steffen & Hackethal, Andreas, 2019. "Taming models of prospect theory in the wild? Estimation of Vlcek and Hens (2011)," SAFE Working Paper Series 146, Leibniz Institute for Financial Research SAFE, revised 2019.
    16. Ivan A. Guitart & Guillaume Hervet & Sarah Gelper, 2020. "Competitive advertising strategies for programmatic television," Journal of the Academy of Marketing Science, Springer, vol. 48(4), pages 753-775, July.
    17. Valendin, Jan & Reutterer, Thomas & Platzer, Michael & Kalcher, Klaudius, 2022. "Customer base analysis with recurrent neural networks," International Journal of Research in Marketing, Elsevier, vol. 39(4), pages 988-1018.
    18. Kivetz, Ran & Simonson, Itamar, 2003. "The Role of Effort Advantage in Consumer Response to Loyalty Programs: The Idiosyncratic Fit Heuristic," Research Papers 1738r, Stanford University, Graduate School of Business.
    19. Oliver J. Rutz & George F. Watson, 2019. "Endogeneity and marketing strategy research: an overview," Journal of the Academy of Marketing Science, Springer, vol. 47(3), pages 479-498, May.
    20. Alla Koblyakova & Larisa Fleishman & Orly Furman, 2022. "Accuracy of Households’ Dwelling Valuations, Housing Demand and Mortgage Decisions: Israeli Case," The Journal of Real Estate Finance and Economics, Springer, vol. 65(1), pages 48-74, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joinma:v:45:y:2019:i:c:p:62-80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-interactive-marketing/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.