Do Offline and Online Go Hand in Hand? Cross-Channel and Synergy Effects of Direct Mailing and Display Advertising

Despite the rise of digital, direct mailing as a marketing communication tool remains relevant and widely applied in practice. Nevertheless, research into the effectiveness of direct mailing in the online environment is scant. Key questions that remain entail how direct mails affect different online and offline consumer activity metrics throughout the purchase funnel and how they interact with digital marketing communication tools. The current paper, therefore, investigates these two questions by conducting two studies. First, we focus on the effect of direct mailing on zip-code level upper, middle, and lower funnel performance metrics over time by analyzing quasi-experimental data from a large European insurance firm. The results reveal that direct mailing significantly influences consumer activity metrics in the online channel (i.e., online search and clicking behavior), in support of cross-channel effects of direct mailing. Moreover, direct mailing is shown to be effective throughout the purchase funnel, both directly and indirectly, with a positive net sales effect. Second, we study the joint effect of direct mailing and display advertising by analyzing field experiment data from the same insurance firm. The results show positive synergy between direct mailing and display advertising. Therefore, despite the rise of digital, direct mailing still serves as an effective marketing tool, both by itself and in combination with digital marketing

Sustainability Claims and Perceived Product Quality:The Moderating Role of Brand CSR

In this research, we focus on the presumed negative effect of a sustainability claim on product quality. We propose that a brands' corporate social responsibility (CSR) can reduce this negative effect. We conduct an experiment to test our hypotheses for a newly introduced detergent brand with an ecolabel vs. without one for high and low brand CSR levels. The experiment was conducted among 304 participants. Our results show that the ecolabel of the detergent can indeed trigger quality concerns. These quality concerns are reduced for brands high in CSR. This suggests that a brand's sustained commitment to sustainability is important in overcoming negative effects of sustainability claims on product quality

The effect of permanent product discounts and order coupons on purchase incidence, purchase quantity, and spending

This paper examines the influence of a permanent discount strategy on customer purchase behavior, i.e., purchase incidence in each week, purchase quantity (in units), and total order spending (in CNY). Permanent discounts are defined as discounts continuously provided by retailers. We identify two types of permanent discounts, namely, product-specific price discounts (PD) and order coupons (OD, which can be redeemed for a total order). We collect transactional data from a Chinese online retailer and empirically examine the effects of the two types of permanent discounts and customers’ expectations of PD and OD. We find nonlinear relationships between permanent discounts and customer purchase behavior. PDs negatively influence spending when they are lower than 19% but show a positive effect beyond this threshold, hence depicting a U-shaped relationship. They also affect purchase quantity positively but at a decreasing rate. Customer expectations of PD influence purchase incidence, spending, and purchase quantity following a U-shaped patter with a positive influence appearing when PD expectations are high than 31%, 27%, and 18% respectively. On the other hand, ODs influence spending and purchase quantity positively at an increasing rate. Customer expectations of OD influence purchase incidence, spending, and purchase quantity following a U-shaped relationship where the positive influence on purchase incidence shows beyond OD expectations of 426 CNY, and the positive effect appearing on spending and purchase quantity when these expectations are higher than 34 CNY. We also find that customer expectations of discounts interact with current discount levels in their influence on spending. Combining these results and considering that order coupons negatively affect the profit margin of the total basket, we suggest that retailers should offer order coupons with relatively low value but product-specific price discounts with high discount depth

The effects of cultural differences on consumers' willingness to share personal information

Consumer information is an increasingly valuable resource in the digitally interconnected modern world. Globally, the number of firms collecting and exploiting consumer information to optimize their marketing efforts is increasing rapidly. The authors determine how four cultural dimensions—power distance, masculinity, uncertainty avoidance, and long-term orientation—affect consumers’ willingness to share their personal information with firms (WTS). The authors empirically test the direct effect of national culture on WTS, as well as its moderating effect on the link between WTS and two of its key drivers, privacy concerns and perceived benefits. Drawing on regulatory focus theory, the authors develop a conceptual framework and test it using multilevel modeling on data from 15,045 consumers across 24 countries. The empirical findings demonstrate that national culture directly affects WTS and moderates the effects of both privacy concerns and perceived benefits on WTS. These results highlight the need for managers and marketers to consider international cultural differences when collecting consumer information

No Future Without the Past? Predicting Churn in the Face of Customer Privacy

For customer-centric firms, churn prediction plays a central role in churn management programs. Methodological advances have emphasized the use of customer panel data to model the dynamic evolution of a customer base to improve churn predictions. However, pressure from policy makers and the public geared to reducing the storage of customer data has led to firms' self-policing' by limiting data storage, rendering panel data methods infeasible. We remedy these problems by developing a method that captures the dynamic evolution of a customer base without relying on the availability past data. Instead, using a recursively updated model our approach requires only knowledge of past model parameters. This generalized mixture of Kalman filters model maintains the accuracy of churn predictions compared to existing panel data methods when data from the past is available. In the absence of past data, applications in the insurance and telecommunications industry establish superior predictive performance compared to simpler benchmarks. These improvements arise because the proposed method captures the same dynamics and unobserved heterogeneity present in customer databases as advanced methods, while achieving privacy preserving data minimization and data anonymization. We therefore conclude that privacy preservation does not have to come at the cost of analytical operations. (C) 2016 Elsevier B.V. All rights reserved.</p