Measuring the Effects of Marketing Solicitations

Jialie Chen () and Vithala R. Rao ()
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Jialie Chen: University of Arkansas
Vithala R. Rao: Cornell University

Customer Needs and Solutions, 2021, vol. 8, issue 4, No 3, 122 pages

Abstract: Abstract This research examines the effectiveness of marketing solicitations to customers by a commercial bank. For financial products, a customer might respond to marketing solicitations by either adopting the products directly or contacting the bank for additional information before deciding whether or not to adopt the products. Consequently, whether a customer adopts a product depends not only on the marketing solicitations themselves (the direct effect) but also on the amount of information (the indirect effect) obtained from contacts initiated by customers before potential product adoption. Decomposing the two effects is important in designing effective marketing campaigns. For this purpose, we develop a model of customers’ contact and product adoption decisions in response to marketing solicitations. We further evaluate the statistical significance associated with indirect effects using Bayesian mediation analysis. Our model estimates suggest significant direct and indirect effects of marketing solicitations. The indirect effects, though smaller in magnitude, lead to sizable economic value, in terms of targeting. This result underscores the importance of understanding the indirect effects of marketing solicitations. In addition, we discuss the insights derived from our model for marketing resource allocation among direct solicitations and experiences associated with customer-initiated contacts.

Keywords: Marketing solicitations; Attributions; Financial products; Direct effects; Indirect effects; Bayesian mediation analysis (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s40547-021-00118-9

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