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Abstract
This research looks at whether a local, service-based
professional can successfully use the internet to recruit
clients and increase the purchase intent of prospects. In
particular, this study looked at whether an interactive
personality or knowledge assessment tool would increase
desire for sales information about a service more than a
free information product would. In addition, the purchase
intent was measured for these respondents. It was found that
an interactive assessment created a higher proportion of
prospects registering for an opt-in marketing campaign than
did the free information product. It was also found that
respondents who participated in an interactive survey
expressed higher purchase intent and perceived pricing than
did respondents who received a free e-book. These results
suggest that interactive assessments may be a meaningful
alternative for on-line marketers looking to increase opt-in
and purchase intent.
Introduction
Interactive marketers are constantly looking for ways to
increase permission to send e-mails as well as increasing
the likelihood of purchase among prospects. Interactive
marketers often provide information to prospects as a way to
garner permission to send future e-mails to the prospect
(i.e., "opting-in"). One highly effective way that
interactive marketers have used to is to offer a free
information product (e.g., an e-book) to the prospect in
return for permission to send e-mails about the firm’s
product or service, with the hope that these consumers will
purchase the product or service at that time or in the
future.
It is generally thought that the more involvement a prospect
has with a purchase decision, the more likely he/she is to
review information associated with the product or service.
This increased level of involvement can lead to an increased
liking of the product or service, as well as an increased
probability of purchase. This study investigated these
issues by exploring whether an interactive assessment would
garner more goodwill and purchase intent for an
internet-based service provider than would a free
information product.
Background
While many businesses now use the internet for marketing
purposes, this trend is not as prevalent with small
service-based professionals. Many small businesses in
general, and service providers in particular, are very
proficient at their respective specialty (e.g., accounting,
physical therapist, counseling, coaching) yet not many are
well-versed in business and marketing skills. It has been
shown that many small and medium enterprises do not use
strategic marketing planning when they conduct their
business (Lancaster and Waddelow 1998). Many small, local
businesses see their competitive advantage in serving a
niche market while trying to maintain current customers
(O'Donnell et al. 2002), and don’t necessarily have a
cohesive strategic plan for attaining new customers. Still,
an integrated internet component in a small service firms’
marketing strategy can be very advantageous to the firm
(Banta 2004).
Compounding this problem is the fact that consumers today
are both developing more resistance to any types of
persuasion attempts (Friestad and Wright 1994) as well as
becoming more wary of any electronic communications from
business in general (Godin 1999; MacPherson 2001). A main
concern for many marketers today is how to build trust with
an increasingly wary consuming public (Lewis and Bridger
2001). In addition, the regulatory environment is making the
sending of e-mails for commercial purposes more restrictive
(Johnson 2004). To overcome these issues, it has been argued
that when marketing on the internet, it is better for
potential customers to identify themselves to the business
and agree to have marketing information sent to them
(opting-in) (D'Souza 2003; Godin 1999; Tezinde et al. 2002).
As many on-line marketers are aware, a key method to create
interest and opt-in is by offering free information, such as
e-books, about the topic in which the sold product is a
part. However, reading e-books is essentially a passive
activity, and while providing information is a very
effective marketing technique for establishing trust and
credibility, there could come a point of diminishing returns
when many, if not most, on-line marketers choose this route.
While free e-books serve the role of providing information
to people browsing the internet, many studies show that the
internet is used as an entertainment vehicle as well (Barwise
et al. 2002). It is becoming increasingly important for
businesses to be able to build trust and differentiate
themselves from each other, especially on the internet, if
they don’t want to be perceived as a commodity (Pine and
Gilmore 1999). Marketing on the internet needs to be seen as
a compelling on-line experience if a business is to appear
different from its competitors. Creating compelling
experiences have been shown to be positively correlated with
fun, recreational and experiential uses of the web (Novak et
al. 2000) as well as by having a highly interactive website
(Ghose and Dou 1998) or providing enjoyable information (Eighmey
1997).
It has been demonstrated that the more involved a person is
with a website, the more positive his/her experience is
likely to be. This can be as simple as an involved consumer
paying more attention to the content of a website (Webster
1988) to a person taking on a role within the website that
enhances his/her experience (Edwards and Ferle 2003).
In addition, past research has shown that the more
involvement a person has with a product, the more likely
he/she will be to express higher purchase intent. This
effect has been demonstrated in both off-line (Singh et al.
2000) and on-line (Raney et al. 2003) media where the
effects of infomercials and on-line mini-movies,
respectively, were studied. However, these studies have
looked at involvement and purchase intent based upon a
person watching a long message. The author has not found any
research conducted on interactive exercises and purchase
intent.
Study Introduction
This study looked at methods for increasing opt-in to future
e-mail marketing messages from a small service provider, as
well as increasing the stated purchase intent of the service
by the respondent. A traditional method on-line marketers
use to garner opt-in (and purchase) is to offer an incentive
to the prospect, traditionally some form of e-book or other
free electronic publication. This method is very desirable
in that the cost of delivery is free and the entire delivery
and subscription process can be handled automatically. Yet,
it is believed that while free information is an effective
incentive, another type of incentive might be even more
effective at inducing opt-in among prospects.
Consumers tend to use the internet as a source of
information as well as entertainment (Barwise et al. 2002;
McKeown 2002; Siegel 2004). Free information, such as
e-books, help fulfill the information need consumers seek
when browsing the internet. However, the downloading and/or
reading of an information product are relatively passive
events and may not be enough incentive to induce consumers
to trust a commercial website or purchase a product from the
site. In particular, how can a business help build enough
trust with a consumer to induce him/her to give the marketer
permission to market? It is believed that the more
entertaining and experiential the website is, the more
likely it is that the consumer will view the site and the
provider in a favorable light (Bharati and Chaudhury 2004;
Hill and Gardner 1987; Ko et al. 2005; McKeown 2002). It is
also fairly well-accepted that the more highly involved a
consumer is with a purchase, the more favorably they are
likely to view the experience and purchase decision (Bharati
and Chaudhury 2004; Lewis and Bridger 2001; Pine and Gilmore
1999; Prahalad and Ramaswamy 2004).
Based on this idea, this study compares the marketing
effectiveness of these two well-known types of internet
behavior (i.e., seeking of information compared to being
entertained). Two unique incentives are compared for their
ability to increase opt-in to permission marketing, as well
as any possible influence on the perceptions of the business
and likelihood to purchase from the service provider. The
first incentive tested is an information product (free
e-book) compared against the alternative incentive of a free
personality or knowledge assessment offered to the prospect.
The personality assessment was chosen to be an interactive,
experiential exercise for the consumer.
The human desire for involvement and self-discovery would
suggest that an assessment incentive improves opt-in rates
for permission marketing and perceptions of the business
compared to a free e-book incentive. It was hypothesized
that a more interactive technique might better establish
trust and credibility thereby increasing the desire to
receive further information from the on-line marketer. One
of the main purposes of this study was to explore whether a
short, interactive survey would garner more opt-ins to
receive information than would a free information product.
The study also explored whether respondents who choose to
take the interactive assessment would state a higher
likelihood of purchasing the service than would those
respondents who chose the free e-book. Because the internet
lends itself very easily to truly interactive exercises,
this study also explored the effect of an interactive
exercise on purchase intent as compared to a more passive
exercise (i.e., reading a book).
Methods
Sample
This experiment compared two websites for a personal
services coach to see which one would produce the higher
opt-in rate. A pilot study was conducted with participants
selected from an e-mail list of the general population who
had agreed to receive promotional and study-related e-mails.
A sample of 5000 e-mail addresses was obtained for this
study. Of these 5000 e-mails sent, 437 were undeliverable
and 12 people asked to be removed from the list. 81
respondents completed the study over a three-day period.
While the response rate for the pilot study was very low, it
is not believed that there was any non-response bias, for
several reasons. First, the respondents were told that in a
welcome e-mail that they were being asked to participate in
an academic research project about their perceptions of a
web page. There was no discussion about the experimental
conditions being studied, and any respondents who chose to
not participate would be choosing not to do so based solely
on their desire to not review a website for a research
project. This in and of itself did not have anything to do
with the experiment, and so any conclusions drawn from the
actual respondents regarding the experimental conditions
could be seen as “real” in that the actual purpose of the
study was masked from the entire sample (both respondents
and non-respondents). Second, at the end of the survey, the
respondents were allowed to express their opinions of the
website they had reviewed as well as any general comments.
From reading these responses, it was seen that the focus was
on the web page itself, and not to do with the experimental
conditions. Third, any bias that might be introduced in this
study would be from the fact that some people chose to not
participate in the research. However, as this study was
concerned with how to increase opt-in and purchase intent
for people who do read these type of websites (service
providers), non-respondents would not be a part of this
population anyway. Because respondents who did choose to
participate in this study were randomly assigned to
treatment groups, it is believed that there is no selection
threat present.
The original sample of 81 respondents associated with the
pilot study did yield some interesting directional findings
in all areas under investigation. However, there was not
enough power associated with this sample to draw
statistically significant findings on the dependent
variables of interest (e.g., purchase intent). In order to
increase the power of this study, the original sample was
supplemented with a second, convenience, sample of
undergraduate students from two marketing principles classes
(n=47) for a total of 128 completed surveys. The study
procedures were identical for both samples.
There was some concern that there might be a difference in
the responses of the two samples (original and student
supplement) on the dependent variables due to the fact that
the two groups were demographically different. For the
original sample, the average age of respondents was between
thirty-five and forty-five, the majority was married, and
they had an average household income of $45,000. The
supplemental student sample had an average age between
eighteen and twenty-four, with the majority being single and
from middle to upper-middle class familes. In addition, the
majority of respondents in the original sample worked
full-time, whereas the student sample was mostly comprised
of full-time students. Because of these obvious demographic
differences between the two samples, each sample was
analyzed separately on all of the experimental variables
before they were aggregated. This analysis showed that there
were no statistical differences across the two groups on the
variables of interest (i.e., likelihood of opting-in,
attitudes towards coach and website, propensity to purchase
the coaching product, and amount likely to spend on the
coaching product), indicating no readily apparent selection
threat to internal validity. Therefore the two samples were
combined for analysis.
Procedure
The procedure for this study was identical for both sample
groups. Upon agreeing to participate in the study,
respondents were first directed to an introductory web page
where they were told that they were being asked to evaluate
the website of a personal services provider. The respondents
were told to explore the website at their leisure, and to
feel free to follow any links that they came across. They
were further instructed that when they were finished
reviewing the website they would be taken to the survey. As
compensation for completing the experiment, the respondents
were offered a free e-book on success principles that had
previously been sold on-line. This introductory web page was
the same for all study participants.
After reading this introductory web page, the respondents
were randomly directed to one of two websites to test the
experimental conditions. The two websites were identical in
nature and presentation, except for the independent variable
of interest (the offering of a free e-book vs. free
assessment). The website was designed to look like it was
offering the services of a personal services coach offering
a “Perfect Life” program (created by Thomas Leonard, one of
the founders of modern life and business coaching). At the
bottom of both web pages, the respondents were asked if they
would give permission to receive further information from
this coach (the opt-in portion). As an inducement to provide
their name and e-mail address for future correspondence (the
opt-in portion of the experiment), the respondents were
offered either a free e-book explaining more about attaining
a perfect life, or the opportunity to take a free assessment
on “The 15 Human Conditions,” depending on which website
they had been randomly redirected to. There was no directive
to download the book or take the assessment, and these
options were fully integrated into their respective web
pages.
At the bottom of the web pages, the respondents were asked
to take a survey. When they clicked on this link the
respondents were directed to the survey portion of the
website where they were asked questions about the website in
general, attitudes towards the “coach,” as well as several
pricing and purchase intent questions based upon a Van
Westendorp pricing model (MarketVision 2003). General
comments were then solicited and demographics were
collected. The survey for both experimental conditions was
identical, with the exception of the e-book group being
asked about e-books and the assessment group being asked
about assessments for that portion of the survey (e.g., “Did
you download the free e-book?” vs. “Did you take the free
assessment?”). The researcher developed all websites used in
this study, which were identical in nature except for the
variable of interest.
Study Results
54 respondents were randomly directed to the website
offering the free e-book incentive and 74 were randomly
directed to the site offering the opportunity to take the
free assessment. As part of their review of the website, the
respondents were offered either the chance to take the
assessment or receive the e-book as an incentive to give
permission to the “coach” to send future e-mails. A
significantly greater proportion of respondents opted-in by
choosing to take the assessment, than did those who
downloaded the free e-book, with more than twice as many
respondents taking the assessment compared to downloading
the e-book (28% compared to 13%, respectively; z = 2.084, p
< .05).
Respondents who elected to receive the free e-book (i.e.,
opted in) were then compared to respondents who did not
elect to receive the free e-book for the first website, and
respondents who took the free assessment (i.e., opted in)
were compared to respondents who did not take the free
assessment (for the second website). Several questions were
asked about the perceived professionalism of the coach and
website, as well as about interest in receiving further
communication from the coach. In all cases, those
respondents who opted-in (whether by selecting an e-book or
assessment) gave higher scores for their perceptions and
willingness to receive follow-up e-mails than those who did
not opt-in. Respondents who opted-in by taking the free
e-book were significantly more likely to be “interested in
receiving follow-up e-mails” from the coach informing them
about products and services than were those respondents who
did not download the free e-book (6.86 vs. 4.40 on a
10-point mean agreement scale). The same finding was true
for those respondents who chose to take the interactive
assessment compared to those who did not take the assessment
(5.81 vs. 4.28 on a 10-point mean agreement scale). For this
same group, (took assessment compared to did not take
assessment), there were also significant findings for the
statements, “The website appeared to be professional in
layout,” and “I would be interested in receiving follow-up
e-mails from this coach.”
Those respondents who opted-in by
receiving the free e-book or taking the assessment were then
asked their perceptions of the product. Respondents who
took the assessment gave higher favorability scores (on a
10-point scale) on all dimensions compared to respondents
who downloaded the free e-book. However, while these
results appear interesting from a directional perspective,
none of these findings were statistically significant (most
likely due to the very small sample of respondents who
actually downloaded the free e-book).
The last part of this study looked at the purchase
intent and pricing estimates for those who opted-in compared
to those who did not. The first set of comparisons was for
those who selected the free e-book compared to those who did
not select the free e-book. Due to the small sample size of
respondents who actually chose to download and opt-in via
the free e-book (n = 7), none of these findings were
statistically significant. Nonetheless, there were some
interesting directional findings in that those respondents
who did choose to download the free e-book stated a higher
likelihood of purchasing the program than did those
respondents who chose to not download the free e-book.
Another interesting finding was that the average floor price
for this program for both of these groups was the same,
i.e., both groups of respondents (e-book downloads or
non-e-book downloads) valued this product the same.
When comparing those respondents who took the free
assessment against those who did not take the free
assessment, statistically significant findings were observed
for purchase intent. When asked to set the lowest price
they would expect to pay for a product where they would
question the quality if it were any lower (floor price) and
then state the likelihood of buying the product at this
price, those respondents who took the assessment stated an
average 59% probability of buying the product at their
self-selected floor price compared to those respondents who
did not take the assessment (with an average 40% probability
of buying the service at their average self-selected floor
price). A very interesting finding was observed in that
those respondents who took the assessment stated a lower
average floor price for the service ($73) than did those
respondents who did not take the assessment ($164).
However, the average price for both of these groups was
higher than the average stated floor price for both e-book
groups ($36).
Discussion
The results of this study appear
quite encouraging for on-line businesses wishing to use
interactive assessments. It can be seen that the percentage
of people who elected to opt-in by taking the assessment was
over twice the percentage of people who opted-in with the
free e-book (28% vs. 13%). Respondents who opted-in were
more likely to be favorably predisposed to receiving
follow-up communications from the coach than those who did
not opt-in, regardless of the opt-in incentive. This
suggests that the interactive assessment tool creates a
higher involvement and liking of the coach/service and
therefore leads to more prospects for future communication
from the marketer.
In addition, those respondents who
chose the assessment were more likely to be interested in
reading additional e-mails from this coach as well as
believing that the website was professional in nature,
whereas those respondents who received the e-book were not
as strong on this measure. This is most likely mitigated by
the fact that such a small number of respondents actually
chose to download the free e-book, because there does appear
to be directional evidence that the e-book opt-ins were more
favorable towards the coach and website than the e-book
non-opt-ins. This suggests that while involvement of any
kind is a good thing for the on-line service provider to
include in his/her website, the more interactive nature of
the assessment appears to be a somewhat stronger effect.
Directional evidence also suggests
that the interactive assessment received higher scores for
it being interesting, informative, and fun compared to the
e-book. Considering that e-books typically cost more time
and money to create than an assessment, these results would
appear to bode well for using interactive assessments as an
opt-in tool in terms of generating interest in the service
provider and the service being offered.
Of special importance to the
on-line services marketer is the propensity to purchase
something as well as how much a prospect would be willing to
pay for the service. Here, several interesting results and
implications can be found. Regardless of involvement type
(i.e., downloading free e-book or taking interactive
assessment), those respondents who were more involved with
the website consistently reported a higher purchase intent
than did those respondents who were not as involved with the
website. When asked to set a floor price and then report
purchase intent based upon the floor price, those
respondents who took the interactive survey reported
purchase intent that was 19% higher on average than those
respondents who did not take the interactive survey.
When asked about the minimum price
a respondent would be willing to pay for this service, two
interesting findings appear. First, the specified minimum
price was higher on average for the assessment option group
than for the e-book option group ($138 compared to $36
averages, respectively). When the two groups were divided
into the opt-ins and the non-opt-ins, the same trend held
(i.e., the assessment-takers reported a higher minimum price
than the e-book takers, and the non-assessment takers
reported a higher minimum price than the non-e-book
takers). This implies that, overall; the interactive
exercise option (assessments) is associated with higher
purchase intent and pricing than the free information
(e-books). With information becoming the “currency” of the
internet, perhaps people are beginning to devalue e-books
when compared to other involvement options. Namely, it is
entirely possible that the prevalence of information in
general, and e-books in particular, makes people expect this
as a tables-stake of a website, and do not lend its presence
any additional value other than what is customarily
expected.
Second, and perhaps somewhat counter intuitively, it was
found that for those respondents who had the option of
taking the assessment, those respondents who took the
assessment were more likely to purchase the product, but at
a lower price ($164 for the non-assessment takers compared
to $73 for the assessment takers). This can be compared
against the e-book option group where the average minimum
price the respondents would pay was the same for both the
e-book takers and the non-e-book takers. There are several
interesting implications that can be drawn from this. It
might be suggested that taking the interactive assessment
somehow de-values the worth of the program in the minds of
the prospects. However, it should also be noted that even
the lower average minimum price of $73 for the assessment
takers was higher than the average of both e-book option
groups ($36). It might also be the case that there are some
demographic and/or psychographic differences among the
assessment-takers and the assessment-non-takers, although a
preliminary analysis of the collected demographics did not
reveal this. Perhaps, the increased involvement on the part
of the assessment-takers leads them to be more
price-sensitive, as many consumers expect internet-based
businesses to be more price-competitive (Verma and Varma
2003). It could also be the case that people who are more
involved with a website are spending more time focusing on
the content and are more favorably inclined to evaluate the
website (Hill and Gardner 1987; Ko et al. 2005). If this is
happening, it could be the case that assessment takers are
giving a more reasoned (and perhaps more accurate) answer
than the non-assessment takers. In short, this is an
interesting question for future research.
Limitations, Future Research, and Marketing Implications
While this study lends support to the notion that an
interactive assessment can increase opt-ins, purchase intent
and minimum purchase price for a service provider marketing
on-line, some limitations should be noted. First, while it
appears clear that the interactive assessment led to more
opt-ins than the information product, many of the findings
for the e-book takers are limited in power due to the small
number of respondents who actually downloaded the free
e-book. Based on the directional results obtained here, a
larger number of people exposed to the e-book option would
increase the power of these tests and most likely show
significant involvement features such as liking and
credibility.
Also, as most market researchers will verify, stated
purchase intent does not necessarily lead to actual purchase
(e.g., (Newberry et al. 2003). Therefore, the purchase
intent numbers shown here would most likely represent the
upper-bound of what would actually be sold.
This study also suggests several areas of future research
that would be interesting to explore. For example, are there
demographic and/or psychographic differences among people
who choose to become more involved with a website than those
who choose not to? Does increased involvement with a website
lend itself to more price-sensitivity on the part of the
browser? What would the actual purchase behavior be in this
type of scenario (as compared to stated purchase intent)?
Would the findings of this study translate to other types of
services and products that are sold on the internet, and if
so, which type of product appears to benefit the most from
interactive involvement? And lastly, does the nature and
duration of the interactive involvement have any bearing
upon the questions that were addressed in this study?
As can be seen, this research does have practical and
theoretical implications for the on-line marketer. The
results of this study would suggest that on-line service
providers consider using a more interactive involvement
technique, such as an assessment, either in addition to or
in lieu of free information.
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