In an interview, Robert Käfert and Torsten Grüske share exciting insights on the topic of “Limitations in haptic vouchers”
The CMC print mailing study sets a new focus every year. This year’s focus: limitations. How do limited redemption quantities and periods affect the success of voucher campaigns? In an interview, Robert Käfert from the Collaborative Marketing Club and Torsten Grüske from Deutsche Post classify the results and draw conclusions for practice.
Limited vouchers significantly accelerate sales – this is one of the key findings of the new CMC print mailing study Deutsche Post and the Collaborative Marketing Club. Between the beginning of October 2023 and the end of February 2024, 45 online shops sent a total of over one million print mailings to existing customers. In order to test different limitation strategies, the recipients received different voucher variants: limited number of redemptions, three-week term, seven-week term, reduced discount after three weeks and a basic variant with no limitation.
In their limited campaigns, the limited vouchers achieved a conversion rate of up to 80 percent higher than the basic version. The Online Shop Bitterliebe For example, with the voucher variant, where the discount value decreases after three weeks, the company achieved an uplift of 60 percent in orders during this period. Looking at the entire four-month study period, however, the basic variant is ahead – with a conversion rate of 5.4 percent. The variants with a reduction in value after three weeks and a period of seven weeks follow with 4.8 percent and 4.4 percent.
Torsten Grüske, Vice President Product Management Dialogue Marketing at Deutsche Post, and Robert Käfert, Managing Director of the Collaborative Marketing Club, explain further results and practical implications in an interview.
Why did you choose to focus on “limitations” for the current CMC print mailing study?
Grüske: Limitations are a proven way of directing customer flows in marketing. It was therefore obvious for us to test how limitations work, especially in print mailings. Customers have also indicated that they would like more detailed information on this topic.
Many studies have already shown that limitations increase the desire to buy. The results of the CMC print mailing study confirm this. Were there any surprising findings?
Grüske: We were amazed by the strength of this effect in print mailings. The variant with a quantity limit achieved a 49 percent higher conversion rate in the first week than the basic variant. After three weeks, the three-week limited variant achieved a 58 percent higher conversion rate than the basic variant; the value reduction variant even performed 80 percent better. This proves that limitations are very effective in print mailings.
Although it starts off strong, the limited quantity coupon ultimately performs worst in terms of ROAS, conversion rate and shopping cart. Why?
Grüske: The limited availability of the offer initially creates a strong impulse to buy. But after a while, customers think that they are too late anyway and do not even try to redeem the discount code. Another deterrent effect occurs when customers try to redeem the discount code after a long time and are surprised to find that it is still valid. The assumed low demand may give the impression of an unattractive offer, which can lead to some customers spontaneously canceling the purchase.
In the first week, the “quantity limitation” variant achieved a conversion rate that was 49 percent higher than the basic variant
The seven-week limited voucher leads to a higher shopping cart value than the three-week limited voucher. Do customers shop more indiscriminately when discount offers are available for a shorter period of time, simply to get a bargain in time?
Käfert: I would agree with this thesis. Another factor influencing this result is that products with higher shopping baskets have longer decision cycles. Many people need more than three weeks to consider whether they want to spend 1,000 euros on a bed or a trip.
Print mailings without limitations perform best in terms of conversion rate and ROAS. It therefore seems to make sense to extend a campaign for as long as possible when the pressure to sell is low.
Grüske: After the first seven weeks, the study participants did not expect the tide to turn. But from January onwards, the basic variant overtook the “reduction in value” and “seven-week duration” variants, which had a considerable lead in terms of conversion rate and ROAS. Other studies confirm that limitations do have an effect in the short term, but in the long term they are overtaken by unlimited alternatives. This means that if there is short-term pressure to sell, such as with seasonal products or warehouse clearances, a limitation is worthwhile. If this pressure does not exist, we recommend a campaign lasting several months.
Why does print mailing remain permanently present?
Grüske: Over time, emails tend to slip further and further back in the inbox. Print mailings, on the other hand, are often attached or placed in clearly visible places in the home, such as on the refrigerator or desk. This means they remain visible and are picked up when the time is right to make a purchase.
For which target groups did the limited vouchers perform particularly well?
Käfert: First, a tip on customer segmentation: In the study, the shops categorized their existing customers using the RFM method. The three letters stand for recency, frequency and monetary value. The decisive factors are when a customer last ordered, how often they order and how much they spend. Each customer receives points for these criteria, which result in an overall score. This makes it possible to identify those customers who are more likely to buy again and at higher prices. We generally recommend this approach for dialogue campaigns with print mailings in order to increase performance.
Grüske: The conversion rate for all mailing variants reaches its peak among 50 to 59 year olds. However, the difference to the younger segments is small. The common assumption that only older target groups appreciate print mailings is refuted.
Print mailings are placed in clearly visible places in the home and picked up when the time is right to buy.
Torsten Grüske
How do limitations affect new customers?
Käfert: The psychological effect “fear of missing out” is universal, including for new customers.
What other recommendations can you give to marketers?
Käfert: We were excited to discover that print mailings with limitations can be successfully extended. For example, many companies offer large discounts for a short time on Black Friday. However, campaigns should not end after this day of action, but continue with a lower discount. This gives customers the chance to shop more cheaply during the Christmas season, for example.
How often should limitation strategies be used in order not to reduce the desirability effect?
Käfert: If you constantly use discounts, you are positioning your goods at a lower value. In addition, the marginal benefit for the customer and the shop is reduced. A/B tests are suitable for determining the optimal rhythm for such campaigns, in which the results are compared with a comparison group with an unlimited print mailing. It also makes sense to combine voucher campaigns with a special occasion, such as the launch of a new product. With a “reason why”, the campaign seems more coherent.
How should a limitation be integrated into the design of the print mailing?
Käfert: Experience from past campaigns shows that about one-sixteenth of the cover letter should be used to present the discount offer. The remaining space is used to provide the recipient with further information: Who is writing to me? Why are they writing to me? What do I need to do next? Only by appropriately classifying the advertising mail can trust be built up with the customer.
What topic will the next CMC print mailing study address?
Grüske: The focus will be on the envelope. It is one of the most important components of the print mailing, as it immediately catches the recipient’s eye. We are analyzing the influence of different envelope designs on performance.
