KEVIN F. MC CROHAN & LARRY S. LOWE

This research was designed to reveal whether four postagealternatives resulted in differing response rates, responsesto dependent variable questions, and/or elicited responsesfrom different demographic groups. To determine this, aquestionnaire was mailed to a national probability sampleof 1,000 newautomobile registrants. There were no significantdifferences found in response rates, responses, or demo-graphic groups responding. The authors concluded that theoptimal mailing strategy uses third class postage on thesending envelopes and a business reply permit on the returnenvelope.

A COST/BENEFIT APPROACHTO POSTAGE USED ON MAIL

OUESTIONNAIRES

THERE is an extensive body of literature dealingwith mail questionnaire construction and re-

sponse rates (Kanuk and Berenson 1975; Linsky1975) since many are concerned that non-respon-dents may differ systematically from respondentson some relevant criteria. The higher the responserate, the greater our abihty to generalize from thesample to the population.

In an effort to increase response rates, re-searchers have studied the impact of notificationof respondents prior to the receipt of the question-naire by telephone (Jolson 1977) or postcard (Walker

Kevin F. McCrohan is Chief Economist, Internal RevenueService (AACSB Federal Faculty Fellow) and AssociateProfessor of Marketing and International Business, Uni-versity of New Haven. Larry S. Lowe is Associate Profes-sor of Marketing, Western Kentucky University. Financialsupport from the School of Business Administration,University of New Haven, is gratefully acknowledged.The authors also thank Thomas Daley for his assistancein the preparation of this paper.

and Burdich 1977), personally signed cover letters(Dillman and Frey 1974), questionnaire appearance,e.g., color of signature (Smith 1977), letter size,as opposed to legal size paper (Childers and Ferrell1979), small monetary incentives (Armstrong 1975),promised monetary incentives (Schewe and Cour-noyer 1976), contributions to charity (Robertson andBellenger 1978), and various postage altematives(Jones and Linda 1978; Labrecque 1978; Vocino1977). All have usually been found to be somewhateffective in increasing the initial response rate.

Postage and Response RatesThe effectiveness of high powered postage, inparticular, comes at an increasingly high price, andthe literature supporting its use is somewhat equivo-cal. With the exception of rather unique studieswhich used special delivery as opposed to first class(Kephart and Bressler 1958; Gullahom and Gulla-hom 1963) and air mail special delivery as opposedto first class (Clausen and Ford 1947), most of the

130 / Journal of Marketing, Winter 1981Journal of Marketing

studies have been contradictory. It should also benoted that air mail special delivery is no longeravailable and special delivery now costs $2.00 plusfirst class postage, making its use very expensive.

Slight advantages from using first class over thirdclass on the sending envelope were found by Watson(1965) but not by Keman (1971). Commemorativestamps were found to increase response shghtlyby Labrecque (1978) but not by Watson (1965).Robinson and Agism (1951) found stamps moreeffective than metered postage. However, Clausenand Ford (1947), Dillman (1972), and Vocino (1977)did not.

The prepayment of postage on the return enve-lope was shown to be very effective by Price (1950),and its necessity is accepted. What is in questionis the class of postage required. Business replypermits have been found to be more effective thanfirst class (Peterson 1975). However, Watson(1965),Wiseman (1973), Harris and Guffey (1978), andJones and Linda (1978) all found first class postageto be more effective than permits, although in thelatter two studies the advantage was slight. Themajority of these response rate studies seem toassume that the higher response rate and resultantdecline in non-response bias justifies the increasedcosts.

The study reported here suggests that this maybe incorrect. Within any sample there will be re-spondents and non-respondents. In effect, the re-searcher is faced with two segments—one measur-able and one nonmeasurable. If these segments wereto give equal responses then the questionnaire'sfindings will be similar if a 10% or 50% responserate is achieved.

Of the hundreds of response rate studies con-cerning postage conducted, none seem to havefocused on this issue. However, research into thequestion of incentives eliciting responses from dif-ferent groups of respondents has shown that thereare no significant differences among segments re-gardless of receipt of a monetary incentive on thebases of sex, marital status, educational back-ground, and annual household income (Robertsonand Bellenger 1978) or, when using an inexpensivekeychain as the incentive, on the bases of 82 outof 83 variables such as age, type of dwelling,occupation, number of children, and reportedmagazine exposure (Whitmore 1976). This providessome bases for the hypothesis that the postagetreatment will not generate responses from signifi-cantly different groups. Also, it would seem toindicate that the optimal postage strategy wouldbe one which attracts a representative sample ofrespondents and responses at the least cost.

MethodIn order to demonstrate this, a national probabilitysample of 1,000 individuals who had registered anew automobile in the continental United Statesduring October 1976 was divided into four equalgroups and mailed identical questionnaires. Thesample was purchased from R. L. Polk andCompany and the mailing was conducted in Febru-ary 1978. The four postage alternatives, total cost,and cost per response are:'

(a) Metered first class postage used on both thesending and returning envelopes: TC =$75.00, CPR = 88<C

(b) Metered first class postage used on thesending envelope and a mailing permit onthe returning envelope: TC = $59.64, CPR

(c) Metered third class postage used on thesending envelope and metered first classused on the returning envelope: TC =$43.91, CPR = 56*C

(d) Metered third class postage used on thesending envelope and a mailing permit usedon the returning envelope: TC — $26.93,CPR = 35C

ResultsThe response rates for the four groups are sum-marized in Table 1. There is a slight positiverelationship between higher powered postage andresponse rate. However, the relationship is notsignificant. These findings are consistent with Ker-nan (1971) who found no significant differencesbetween third class and first class postage on thesending envelope, and Peterson (1975) who did notfind first class to be more effective than a mailingpermit on the return envelope.

Table 2 presents the results of the chi-squareanalysis of the data. It can be seen that there is

'The total cost and cost-per-response figures are based on rateseffective July 6. 1980. First class outgoing is 151 per piece, thepermit return is 2.7C per piece, and the third class rate is 41<t:per pound for 250 one-ounce pieces. For example, the total costof postage alternative (d) is 250 pieces = 250 ounces - 16 ounces =15.625 pounds x 411 per pound {121; for nonprofit organizations)= $6.41 + 76 returned pieces x (151: first class postage rate + 121:return permit surcharge) - $26.93 -i- 76 pieces = 35t cost per re-sponse. To be eligible for third class rates, the mailing must containat least 200 pieces which weigh less than 16 ounces per piece,to be presorted by Zip Code, and be the same size and shape.Registry, insurance, special delivery, special handling, certified,and C.O.D. services may not be used for third class matter. Forfurther information, see Domestic Mail Manual (DMM), Issue 1,7-30-79, sections 620-623, 640-643, 650-^52.3, 660-665, and 917-917.5.

A Cost/Benefit Approach to Postage Used on Mail Questionnaires / 131

TABLE 1Chi-Square Analysis of Response Rate

Postage

Metered first-class mail on both sending and returning envelopeMetered first class mail on sending and permit on returningenvelopeMetered third class mail on sending and metered first class onreturning envelopeMetered third class mail on sending and permit on returningenvelope

Overall response rate: 321/1,000 = 32.1X^ = .61; d f - 3; NS.

NumberMailed

250

250

250

250

NumberReturned

85

82

78

76

PercentReturned

34.0

32.8

31.2

30.4

no significant relationship between postage treat- (1978) and Whitmore (1976) who found that pre-

ment and the dependent variables brand of auto- miums did not generate a systematic bias from

mobile purchased, model year, prior brand owner- respondents.

ship, age of replaced automobile, and automobile

utilization, or the independent variables of educa- r^«.««i.,o:««o

' . . f , , r 1 c 1 Conclusions

tion, occupation, stage m family hfe cycle, family

income, and employment status of wife. These Results of this study suggest that no systematic

findings are consistent with Robertson and Bellenger bias is produced in mail surveys due to the postage

TABLE 2Chi-Square Analysis of Variables Cross-Tabulated with Postage Treatment

Variables X^ Value Degrees of Freedom Level of Significance

Dependent Variables

Brand of Automobile Purchased^ 77.84 57 2121Model Year' - 1.63 3 ^6523Prior Brand Ownership" 2.17 6 9035Age of Replaced Automobile'' 4.89 9 8434Automobile Utilization^ 2.23 3 5251

Independent Variables

Education' 11.98 18 8484Occupation^ 15.70 18 6135Stage in Family Life Cycle' 20.23 18 3199Annual Family Income' 10.13 9 3404Employment Status of Wife' .49 3 9221

^The automobile brands were Lincoln, Cadillac, Chrysler, Oldsmobile, Buick, Pontiac, Dodge, Mercury. Plymouth, Ford Chevrolet,Volkswagen. Renault, Datsun, Toyota, Fiat, Honda, American Motors, and MGB.''The categories were New 1976 and New 1977.^The categories were No Prior Automobile Ownership, Prior Brand Ownership, and No Prior Brand OwnershipThe categorres were 0-2 years, 3-4 years, 5-6 years, and 7 or more.

n h e categories were Purchased For Use as a Second Car and Not Purchased For Use as a Second CarThe categories were Graduate Degree, College Degree, Some College. High School Graduate. Some High School, Some

Junior High School, and Less Than Six Years Schooling. The breakdowns for education and occupation were taken fromthe Hollmgshead Index of Social Position.«The categories were Executives and Proprietors of Large Concerns and Major Professionals, Managers and Proprietorsof Medium-sized Businesses and Lesser Professionals, Administrative Personnel of Large Concerns and Owners of SmallIndependent Businesses, Clerical and Sales Workers, Skilled Workers, Semi-skilled Workers, and Unskilled Workers.The stages were Young Single, Young Married, Young Married (youngest child under six). Young Married (youngest child

over SIX). Older Married (over 45} with Dependent Children, Older Married without Dependent Children, Older SingleThe income segments were 0-S13,999, S14.000-S20,999, S21,000-S34,999, over S35.000 per year.

'The categories were Employed and Homemaker.

132 / Journal of Marketing, Winter 1981

treatment. Although the use of metered first classpostage on both envelopes did result in the highestresponse rate, this slight improvement (3.6%) re-quired a 250% increase in postage costs.

Since the combination of third class and permitcosts less, does not attract responses from differentdemographic types of respondents, and generates

similar responses to questionnaire items, its useappears to offer considerable savings with httle lossof vahdity due to non-response bias. Given thelikelihood of increased first class postage costs,marketing research managers should consider theuse of third class postage when time (two to fouradditional days) is not a major factor.

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, and James H. Frey (1974), "Contribution ofPersonalization to Mail Questionnaire Response as anElement of a Previously Tested Method," Journal ofApplied Psychology, 59 (June), 299-301.

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