direct marketing. direct marketing defined radio direct selling magazine and newspaper direct mail...
TRANSCRIPT
Direct MarketingDirect Marketing
Direct Marketing Defined
RadioRadio
Direct SellingDirect Selling Magazine and NewspaperMagazine and Newspaper
Direct MailDirect MailTelemarketingTelemarketing
TV SellingTV Selling
The total of activities by which the seller directs efforts to a target audience using one or more media for the purpose of soliciting a response by phone, mail, or
personal visit from a prospect or customer
The total of activities by which the seller directs efforts to a target audience using one or more media for the purpose of soliciting a response by phone, mail, or
personal visit from a prospect or customer
“Direct marketing is an interactive
system of marketing which uses one or
more advertising media to affect a
measurable response and/or
transaction at any location.”
ALSO
Growth of Direct Marketing
Technological Advances
Technological Advances
Changing Structure of
Society
Changing Structure of
Society
Consumer Credit Cards
Consumer Credit Cards
Miscellaneous factors
Miscellaneous factors
Direct Marketing Syndicates
Direct Marketing Syndicates
Changing Structure of
Markets
Changing Structure of
Markets
Direct Marketing Combines With . . .
AdvertisingAdvertising
Sales Promotions
Sales Promotions
Public Relations
Public Relations
Personal Selling
Personal Selling
InternetInternet
Support Media
Support Media
Direct Marketing
Direct Marketing
DM Ads
How Database Marketing Works
A Comprehensive Consumer Database
Name
Address/Zip Code
TelephoneNumber
Length ofResidence
Age
Gender
MaritalStatus
FamilyData
Education
Income
Occupation
TransactionHistory
PromotionHistory
InquiryHistory
UniqueIdentifier
A Business-to-Business Database
Contact Info
Contact Title
TelephoneNumber
Source oforder, inquiry,
referral
CreditHistory
IndustrialClassification
Size of Business
Revenues
Number ofEmployees
Time in Business
HeadquartersLocation
PurchaseHistory
PromotionHistory
InquiryHistory
UniqueIdentifier
Characteristics of Direct Marketing
• Customer/prospect databases that make 1:1 targeting possible• A view of customers as assets with lifetime value• Ongoing relationships and affinity with customers• Data-based market segmentation• Research and experimentation (testing)• Benefit-oriented direct-response advertising• Measurement of results and accountability for costs• Interactivity with customers on a personalized and
individualized basis• Multimedia direct response communication• Multichannel fulfillment and distribution
Direct Marketing Traditional Brand Marketing
Direct selling to individuals with customers identifiable by name, address and purchase behavior
Mass selling with buyers identified as broad groups sharing common demographic and psychographic characteristics
Products have the added value of distribution direct to the customer, an important benefit
Product benefits do not typically include distribution to the customer’s door
The medium is the marketplace The retail outlet is the marketplace
Marketing controls the product all the way through delivery
The marketer typically loses control as the product enters the distribution channel
Advertising is used to generate an immediate transaction … an inquiry or an order
Advertising is used for cumulative effect over time for building image, awareness, loyalty and benefit recall. Purchase action is deferred.
Repetition of offers, promotional messages, toll-free numbers and web addresses are used within the advertisement
Repetition of offers and promotional messages are used over a period of time
Customer feels a high perceived risk – product bought unseen, recourse is distant
Customer feels less risk – has direct contact with the product and direct recourse
Historic Comparison Between Direct and Traditional Brand Marketing
Convergence of DM and Brand
• The differences have blurred due to the digital revolution … today…
• Most traditional marketers conduct marketing from a Web site, catalog, toll-free number and have a “call-to-action” in their ads
• Most direct marketers now create and reinforce brand strategies at the individual level
Objectives of Database Marketing
Improve Selection of Market Segments
Improve Selection of Market Segments
Stimulate Repeat Purchases
Stimulate Repeat Purchases
Cross-selling Other Products
Cross-selling Other Products
Customer Relationship Management
Customer Relationship Management
ObjectivesObjectives
• Track Customer Purchases and group them on Purchase History
• Build a data base• Keep track of communication preferences• Let customers decide how to give feedback• Empower staff to make decisions• Track Staff actions and make improvements• Try new ways to leverage customer
intelligence• Always add to customer intelligence• Develop customer intelligence on past
customers• Do it now
Developing a Database
Kiosk ActivityKiosk Activity
0800 toll free0800 toll free
Direct MailsDirect Mails
111 Services111 Services
SurveysSurveys
CatalogsCatalogs
SourcesSources
Effective Databases
RFM Scoring RFM Scoring
Frequency(How often do they
purchase?)
Frequency(How often do they
purchase?)
Recency(How recently did
the customer purchase?)
Recency(How recently did
the customer purchase?)
Monetarytransactions
(How much do they spend?)
Monetarytransactions
(How much do they spend?)
Direct Marketing Strategies
One-StepOne-Step Two-StepTwo-Step
• The medium is used directly to obtain an order
• Often use 800 number phone orders and credit card payment
• May use one medium to obtain inquiry and qualify prospect
• Typically follow up with a second medium to complete the sale
Direct-Marketing Media
Home shopping
Home shopping
InfomercialsInfomercials
TeleshoppingTeleshopping
Print, catalogsPrint, catalogs BroadcastBroadcast
TV SpotsTV Spots
TelemarketingTelemarketing
Direct MailDirect Mail
Types of Direct Mail
House listsHouse lists
BroadsidesBroadsides
CatalogsCatalogs
FlyersFlyers
FoldersFolders
InclusionsInclusions
PostcardsPostcards
ReprintsReprints
Sales lettersSales letters
Self-mailersSelf-mailers
All forms of advertising sent directly to prospects through the Postal Service or through
private services
All forms of advertising sent directly to prospects through the Postal Service or through
private services
Porsche Targets Prospects with Direct Mail
Success with Catalogs
TV Spots, Infomercials, and Homeshopping
A Direct Response Print Ad
Telemarketing
InboundInbound
Telephone calling by the marketer or marketer’s agent to individual prospects, seeking purchase, subscription, membership, or participation by the call recipient.
Marketers facilitate and invite prospects to call a central location via a long distance number, by a toll-free 800 number, or a fixed-cost 900 number.
OutboundOutbound
Audiotex or Telemedia
Forms of Direct Selling
Repetitive person-to-person
Nonrepetitive person-to-person
Party Plans
Cutco Knives Employs Direct Selling
Measuring Effectiveness
Cost per Order (CPO)
Direct Marketing Advantages
Selective reachSelective reach
Segmentation capabilitiesSegmentation capabilities
Frequency potentialFrequency potential
FlexibilityFlexibility
TimingTiming
PersonalizationPersonalization
CostsCosts
Measures of effectivenessMeasures of effectiveness
Direct Marketing Disadvantages
ImagefactorsImagefactors
AccuracyAccuracy
ContentsupportContentsupport
Risingcosts
Risingcosts
Do NotContact lists
Do NotContact lists
A number of factors are promoting the attractiveness of direct
marketing. The main factors are:
Availability of consumer credit cards.
Availability of professional agencies.
Competitive Pressures, Rising Media Costs, and Market
Fragmentation.
Increasing family incomes, including dual-income
families.
Technological advances.
Direct Marketing Decisions
For successful implementation of
direct-marketing, marketers must
establish objectives, specify target
market, choice of strategies, and set
evaluation criteria.
Direct-Marketing Objectives
Objectives of direct marketing usually
focus on seeking direct response in
terms of behavior.
Market Segmentation
Market segmentation and targeting the right
customers are critical to the success of
promotional programme. Customers can be
grouped on the basis of age, sex, income,
education, lifestyle, and stage in family life
cycle etc.
Direct marketers use a database.
The database should provide the answers to the following questions:
Where do they live?
How did they make contact first time?
What have they purchased?
How often have they purchased?
What is the monetary value of their purchases?
How do they order or purchase, through the Internet, mail, phone, or in person?
What is known about them and their families, occupation, education, children, interests, attitudes, and payment histories etc.?
In case of B2B, who are the influencers, users, deciders, and purchasers?
Location of corporate office and branch offices.
Direct Marketing Flow Chart
Direct M arketing
M arketing Research
M arketSegm entation
D irect ResponseAdvertis ing
Advertis ing Creation
M edia
D irect M ail Telephone Broadcast Internet Newspaper M agazine O thers
D irect M ail Telephone Broadcast Internet Newspaper M agazine O thers
D irect Response Expenditures
D istribution Channels
M easurable R esponse
VendingM achines
M ail O rder,M ail/Phone
Personal Visitto Seller
Personal Visit orCall to Buyer
Custom er / ProspectDatabase
Response / TransactionCom pletion
(Source: G. Belch and M. Belch, Advertising and Promotion. Based
on figure by Martin Bair, Henry R. Hoke,
Jr., and Robert Stone).
Direct Marketing Offer and Media
There are five important decision areas: product, offer, medium, distribution method, and creative strategy.
One-Step Approach
Two-Step Approach
Direct Mail
Catalogues
Broadcast Media
Print Media
Telemarketing
Electronic Shopping
Direct Selling
Advantages of Direct Marketing
Direct marketing offers the advantage of reaching large number of well-defined target customers and almost eliminates waste coverage.
Good quality databases are available from independent suppliers and the marketer can segment customer groups with considerable precision.
Direct marketer can personalise the message. Direct marketing can deliver almost perfect offers to customers. Marketer can build desired frequency level based on media. Direct marketing offers creative flexibility in different media. Direct marketer can quickly develop a list of specific profiles for direct
mail. Direct marketing is more effective in building customer relationship. It is very cost effective considering the sale generated per contact. The results can be measured most accurately.
The Processes of Direct and Interactive Marketing
• Primary goal:– The creation and cultivation of a
customer
• Basic Premise:– Customer and prospect responses are
measurable– Customer data drives all DM strategies– Multiple channels are used to serve the
customer
Customer Similarity and Customer Value
• Database technology made it possible to track customer transactions and actions
• Lifetime Value of a Customer
The Direct and Interactive Marketing Model
Marketer
Direct
Communication
Hi-Tech
Media
Elect.
Media
Print Media
Prospect/Customer Database
Target Customer/Prospect
Measurable
Response
and/or
Transaction
Multi-Channel
Fulfillment
Direct
Mail/Cat
Web Physical
Store
Components of the Direct and Interactive Marketing Model
• Direct Communication 1:1• Multiple Media• Measurable Response• Database• Customer Relationships• Multichannel
Fulfillment/Distribution
Primary Applications of Direct and Interactive Marketing
• Traffic-building at the seller’s location
• Lead-generation at the buyer’s location
• Mail order (remote location)• Multichannel distribution
Primary Users of Direct and Interactive Marketing
• Product and service enterprises• Customer and industrial enteprises• Profit and non-profit organizations• Fundraising organizations• Political action groups
Trends in Direct and Interactive Marketing
• Creating In-Store Traffic• Directing Online Traffic• Membership (similarity) Clubs• Issues of Privacy and Security
Customer Databases
An organized collection of comprehensive data about
individual customers or prospects, including geographic,
demographic, psychographic, and behavioral data.
Forms of Direct Marketing