Conventional wisdom assumes that a carefully planned premium offer will increase the response rate to a direct marketing offer. For this study, a direct mail program was designed in order to measure the impact of two premiums—one for prompt response and another for larger quantity ordered.
Twenty thousand pieces were mailed using a random split half sampling method, and responses to each offer were carefully monitored. The results were unexpected and provide important insights for the development of optimum direct marketing strategies. The quantity premium had an insignificant impact on order rate, while the prompt-response premium actually resulted in a reduced order rate.
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