Sincerity Begets Business: On the Effectiveness of Appreciation Letters in Inducing Repeat Online Purchase

Abstract

Consumers often switch between online retailers. Thus, increasing consumers’ repeat purchase has become crucial for online retailers. To induce repeat purchase, some online retailers adopt the practice of including an appreciation letter in the shipping package. This research investigates whether this practice can stimulate repeat purchase. We collaborated with an online retailer and conducted a randomized field experiment in which different versions of appreciation letters were sent to consumers. We tracked 2,000 consumers’ purchase behavior for 6 months after the manipulation. We found that, compared to the control condition in which no letters were sent, handwritten letters led to a higher repeat-purchase rate, whereas printed letters and photocopies of handwritten letters were not effective. Among handwritten letters, letters with bad-looking calligraphy were more effective than letters with ordinary-looking calligraphy and letters with good-looking calligraphy. In lab studies, we demonstrate that consumers infer that letters with poor calligraphy are likely to be written by sellers, whereas letters with good calligraphy written by professional copyists hired by the seller. Because consumers value sincerity, they infer stronger sincerity from letters written by the sellers than from letters written by others, and thus respond more positively to letters with poor calligraphy.