Mail Stream as a Platform: Patterns of Recipients? Reactions

Letter volumes in advanced economies decreased significantly in the past decade, and postal operators are reconsidering their pricing strategies in light of the mail?s value compared to its electronic substitutes. This paper examines the interdependencies be-tween various types of mail in terms of the recipients? reaction to their mail by means of an empirical analysis based on a Swiss data set of 2016. It shows that a balanced mail mix of advertisement and transactional mail significantly increases the probability of the recipient reacting positively to addressed advertisement (direct mail). For example, higher shares of non-advertisement as well as private mail in the recipients? mailbox in-crease positive response rates to advertisement, thereby increasing the advertisers? will-ingness to pay for postal services. Moreover, we find that females show a significantly lower odd of showing a positive reaction conditional on the mail mix than men do and that the odds of a firm using advertisement mail to attract customers being contacted are significantly higher for recipients with a positive mail mix. A similar finding holds for the odds of searching the internet for more information on advertised goods. Our find-ings suggest significant interdependencies between various types of mail which postal operators should take into account in their product development and pricing strategies.