How Much is Too Much? The Effect of Offline Call Intensity on Online Purchase of Digital Services

Xingyue Zhang and Yuliang Yao

Production and Operations Management, 2020, vol. 29, issue 3, 509-525

Abstract: Use a unique dataset collected from a large classified ads website, we empirically examine the effect of the offline call intensity on the online consumer purchase probability of digital services and the carryover effect of the call intensity. We find that the online consumer purchase probability is increasing in the call intensity but at a decreasing rate. We further demonstrate that the decreasing rate is sizable enough that the relationship between the online consumer purchase probability and the call intensity is an inverted U‐shaped curve. In addition, there exists a strong carryover effect where the online call intensity in the past 4 weeks does not fade away but has a positive effect on recent consumer purchases. Our estimations show that both too much and too little call intensity will result in considerably worse outcomes. As compared with the call intensity at the optimal level, too much call intensity potentially reduces the online consumer purchase probability by 29.11%, and too little call intensity potentially reduces the online consumer purchase probability by 54.90%. Furthermore, making calls every week for 4 weeks can increase consumer purchase probability by 10.69 times as compared with just initiating calls with the consumers.

Date: 2020
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