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Assessing Direct Marketing Effectiveness at a Retailer’s: a Mixed-Effects Model of Heterogeneous Responsiveness to Personalized Promotions

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  • Roko Pedisic

Abstract

This study proposed a mixed linear modeling framework for revealing the average treatment effects of coupon promotions as well as for figuring out what kind of customers are more responsive to coupon promotions. The analysis used detailed data on 2,469 households who are frequent shoppers at a retailer over one year. A series of models starting from fixed parameters OLS regression to more flexible random coefficient models were built. The results showed that receiving more coupon promotions does not lead to higher spending among households. None of the available demographic characteristics was significantly linearly related to the responsiveness to coupon promotions according the initial model with cross-level interaction terms. However, exploratory analysis of random slopes with the help of a regression tree allowed to correct the specification, which allowed confirming that people aged 25+ with annual household income exceeding $25,000 are more responsive, yet their response is insignificantly different from zero. Â

Suggested Citation

  • Roko Pedisic, 2021. "Assessing Direct Marketing Effectiveness at a Retailer’s: a Mixed-Effects Model of Heterogeneous Responsiveness to Personalized Promotions," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 10(1), pages 1-2.
    • Handle: RePEc:spt:stecon:v:10:y:2021:i:1:f:10_1_2
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    References listed on IDEAS

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    3. Julia Hoffmann & Julia Bronnmann, 2019. "Bottle size matters: Heterogeneity in the German carbonated soft drink market," Agribusiness, John Wiley & Sons, Ltd., vol. 35(4), pages 556-573, October.
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