dm 3 channels

8/2/2019 DM 3 Channels

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DIRECT MARKETING CHANNELS

Direct marketers can use a number of channels for reaching individual prospects andcustomers. These include face-to-face selling, direct mail, catalog marketing,

telemarketing, TV and other direct-response media, kiosk marketing, and e-marketing.

1. Face-To-Face SellingThe original and oldest form of direct marketing is the field sales call e.g. Eureka

Forbes, Real Value - Ceasefire. Today most industrial companies rely heavily on a

professional sales force to locate prospects, develop them into customers, and grow thebusiness; or they hire manufacturers' representatives and agents to carry out the direct-

selling task addition, many consumer companies use a direct-selling force: insurance

agents, stockbrokers, and distributors working for direct-sales organizations such as,Oriflame, Avon etc.

2. Group Selling

A. Exhibitions and Trade ShowsExhibitions are a hybrid medium. Some exhibitions are like broadcast media

advertising. The aim is merely to put products on show to a large number of customers

and excite their interest. Many national consumer exhibitions are of this kind. There

may be a direct marketing component. You can ask consumers showing interest to givetheir name and address to stand staff. These can then be distributed to local dealers for

follow-up, or customers may receive a mail-shot to sustain their interest and trigger a

visit to an outlet where they can buy.

Increasingly, especially in business to business, exhibitions are used as an integral part

of the contact strategy. Prospective or existing customers are targeted through yourdatabase or rented lists. They are invited to the exhibition and perhaps asked to confirm

their attendance. An appointment with stand staff may even be booked. After the

exhibition, depending on the success of the visit, there may be a follow-up contact

(sales force, telephone or mail). You should use exhibitions when:Sales calls are expensive and you want to get many customers visiting you rather than

you visiting them;You want to attract new customers and the exhibition has proven quality attendance.

In this respect, the exhibition functions like a rented list;

Complex concepts are being demonstrated, so instead of individual demonstrations

having to be mounted all over the country, many customers can see the demonstrationin one location.

e.g. Opel, Honda, Tata, Consumer Durables

B. Sales seminars and other company-sponsored special events

These include the following:

o the straightforward sales seminar, where a concept is described and perhaps

audio-visual techniques are used to demonstrate it in action;

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o the physical demonstration of the product, often held in your sales office or

at the factory;

o awareness and training events, where your aim is to educate customers so

that they can appreciate the value of your company offering. This is the 'soft sell'

approach;

o entertainment, e.g. visits to sporting and cultural events. Here your aim is toreward your customer for loyalty and to further cement the relationship.

All these have much in common with exhibitions from a direct marketing view point.

The difference is that, being sponsored by you, all those attending must be invited byyou or your business partners (very common in business-to-business marketing). To

ensure the right quality of attendee, direct marketing is the medium most commonly

used to market such events. E.g. British Airways, Timeshare Club selling.

3. Direct Mail

Direct-mail marketing involves sending an offer, announcement, reminder, or other

item to a person. Using highly selective mailing lists, direct marketers send out millionsof mail pieces each yearletters, flyers, foldouts.

Direct mail can be used effectively in both acquisition & retention. Direct mail

personalization is very common. Today, nearly every mailing to a-firm's prospects andcustomers has the name of the target person, along with his or her address. The days

when direct marketers sent mailings with envelopes addressed "To the resident" are

nearly gone. This personalization is possible because of computing power & massivedatabase that contain names & addresses. Sophisticated computer programs mass-

produce personalized mails by feeding names & addresses onto letters and other pages

such as those in magazines. This creates the illusion of a personal contact between theseller and a target market e.g. ICICI, HDFC, Citibank, Readers Digest

Direct mail is flexible because of its ability to customize a message based on theaudience it is appealing to and the circumstances under which that appeal is being

made. As a medium, the mails have no fixed audience parameters. Unlike other media,

such as television, radio, magazines, and newspapers, direct mail is not constrained in

how it defines the scope and location of its target audience. Thus, the mailer, not themedium, determines the nature and size of any direct-mail effort.

Direct mail has no editorial environment. Its commercial message is not readincidentally as with an advertisement in a magazine. Some mailings look like offers,

while others are disguised to appear to be something else. Many prospects have opened

a direct-mail piece thinking it was an important notice from a bank or some urgentmessage from the government only to find that the envelope contained an offer for a

new magazine or insurance plan. Direct mail obtains higher response rates than any

other medium used in direct marketing due to its ability to be personal, selective, and

flexible and to deliver a custom message free of competing advertising to a specificindividual or household. Mailboxes may be clogged with many items, but the items are

opened one at a time. Although many direct mail pieces are discarded because they are

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seen as junk, what is read still pulls a larger response than that of any other medium.

Thus, the advantages of direct mail are as follows:

Selectivity

Personalization

Flexibility

Isolation Response rates

4. Direct- Response Television CommercialsToday's revolution in direct marketing is most evident in the way direct-response

commercials look, implying that the audiences react mainly to the creative approach of

what they see. However, like any other form of advertising, direct-responsecommercials seek to communicate with members or target markets - benefits are

described, a set of supporting reasons for why the product delivers those benefits is

explained These reasons establish the credibility of the product and the offer and maybe linked to attributes of the product such as how it works or how it is made or

designed. Credibility is often derived from demonstrations and testimonials.

Direct-response advertisements are designed to provoke a specific action from the

prospects. The object may to be the viewer to place an order by calling a number or,

less frequently, to write for more information, e.g. Asian Skyshop, TSN.

Most direct-response television advertisements are 60 seconds long, but some are only

30 seconds. The former gives the advertiser enough time to grab the viewers attention,

explain the product, and provide ordering information. Those commercials must beshown repeatedly because one 60-seeond exposure seldom reaches many members of

the firm's target audience or convinces the ones it does reach to place an order.

The most successful commercials offer a bargain, guarantee satisfaction and make the

product easy to order. Each of these reduces the risk the consumer may perceive in

placing the order by making the shopping experience easy, convenient, safe and

economical.

Direct-response television offers produce 60-to-80 percent of the-orders via toll-free

phone, with the rest coming in by mail. Toll-free numbers connect the caller withphone centers that handle incoming calls they generally operate seven days a week and

are staffed to handle the anticipated phone volume.

5. Direct Response In Print Media.Magazines and newspapers convey messages on printed pages to mass audiences or

highly segmented audiences, depending on which specific publication is selected.Direct marketers benefit from prints in the following ways

Longer shelf life compared to direct mail

Pass-along readership potential

Regional and demographic segmentation

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Print also allows direct marketers to widen their customers base to non-mail order

buyers.

Making magazine and newspapers advertising work. Direct-response magazine and

newspapers space advertising must ask the reader to do something. To make a sale, the

advertisement must present enough information to stimulate a purchase decision orgenerate an inquiry, which will be followed up by mail or a personal sales call. e.g.

Asian Paints, Berger Paints, McDonalds, Dominos, Outlook, The Week. Magazines

and newspapers that contain a heavy volume of direct-response advertisements usuallyoutperform those that do not have many such advertisements. This is probably true

because particular magazines or newspapers have readers with a positive attitude

toward direct marketing activities.

There are two broad objectives while preparing a direct marketing strategy:

Acquisition - In media planning, for customer acquisition, the need is to locate,

identify, & directly contact potential customers in the target market. The core aim of

such campaigns is to recruit maximum number of target customers at the minimumcost.

Retention - In retention, the relationship with the customer deepens & theorganization can begin to record data on preferences & habits. At this stage the

choice of communication media can be customer defined.

Improving cost efficiency & effectiveness in interaction with the customer is important.

Reduce the customer paper cycle & treat more valuable customers differently by

contacting them directly through telemarketing.

6. Catalogs

The word catalog has been derived from the Greek word 'Katalogos', meaning 'to list'

The use of the word list may seem rudimentary, but even today catalogs are most oftenboth visual and verbal listings of products for sale. Products are pictured with

informational copy designed and worded to entice the reader to buy. Sophistication of

design, photographs, art, ink, and glossy paper have transformed the original unadorned'list" into one that is fully customized and ready to entertain, educate, and sell with the

flip of a page.

The first catalog, a listing ofbooks, was produced in Europe in the 15th century. InAmerica, Ben Franklin, the first postmaster of the United States, produced the first

version of a mail-order catalog in 1744. It was a listing of several hundred books. That

catalog was a natural outcome of Mr. Franklin's profession as a postmaster andpublisher. In those days m America, postmasters could send any type of printed matter

through the mail, at no charge.

Types of catalogs

Catalogs are first classified according to whether they are for consumers or business

organizationsConsumer catalogs have mass circulations, whilebusiness catalogs have

much lower circulations.

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Consumer catalogs are distinguishable by the types of items they carry, the target

markets they want to reach, and the quality of their appearance and design. While someconsumer catalogs are designed to generate retail store traffic, the majorities are from

firms that concentrate almost exclusively on catalog sales.Specialty catalogs dominant

today's consumer catalog landscape. They are the fastest growing part of the catalogmarket and far outnumber the few remaining general merchandise catalogs. The

specialty catalogs, which carry items ranging from clothing to food, are designed to

cater to specific tastes associated with lifestyle preferences, including differences ininterests, activities, attitudes, and values. e.g. Tour operators, Titan, Tanishq

Business-to-Business catalogs sell such items as office supplies and computer

accessories. They usually carry specific types of items such as paper products orelectronics as opposed to a general selection. The catalogs are mailed often to a select

list of prospects or to those buyers who have placed an order during a fixed period of

time. Over the last decade, business-to-business catalogs have come to look more and

more like consumer catalogs with their emphasis on colorful, well-designedmerchandise displays and motivational sales copy. e.g. Omega Stationery, Anupam

Stationary, Kores, Siemens.

7. E-mail and the Internet

The Internet provides marketers with the ability to interact with people far more. Itsmain benefits to the direct marketer include the complementary use besides other more

classic direct marketing methods to supply further information. It also provides a

platform for information on benefits and services for any new potential prospects and a

means to apply online or request more information, ask questions or register online. Itcan be refreshed regularly and cheaply, which can be far more efficient than updating a

catalogue. Banner ads can be placed on complementary sites to attract your chosen

target audience to your site to increase response to tactical offers, as well as e-mailmarketing to raise awareness of your campaigns and offers.

The Internet, due to its progressive and innovative nature, lends itself well to similarapproaches. Therefore creativity and interactivity are key to achieving and maintaining

cut-through in this highly competitive medium. e.g. Amazon.com, Bazee.com, Redifff,

Yahoo.

8. Telemarketing and m-commerce

Telemarketing involves the use of the telephone and call centers to attract prospects,

sell to existing customers, and provide service by taking orders and answeringquestions. Telemarketing helps companies increase revenue, reduce selling costs, and

improve customer satisfaction.

Telemarketing can be an important part of an integrated marketing communication

program. The telemarketing objective is to reach customers in a personalized, cost-

effective interaction that meets customer needs. A well-planned telephone marketing

program is a carefully thought-out and controlled activity in which the persons called

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have been identified as actual or potential members of a firm's target market; thus,

telemarketing helps build and maintain satisfactory customer relationships. The most

effective telemarketing programs make use of the latest technologies, includingcommunications hardware and software, particularly database technologies.

The scope of telemarketing is limited only by the imagination of the direct marketer.Although no other marketing tool can match thecost-effectiveness, flexibility, control,

and speed of the telephone, it takes more than just good telephones to get good results.

A telemarketing firm must have qualified telephone operators who have been welltrained in the use of the telephone as a marketing tool. This includes training in proper

voice inflections, listening skills, persistence, and patience. Companies use call centers

for inbound telemarketing (receiving calls from customers) and outboundtelemarketing(initiating calls to prospects and customers). e.g. ICICI, Citibank, HSBC,Orange, Airtel

In fact, companies carry out the following types of telemarketing:

Selling, including outgoing and incoming callings Setting qualified appointments.

Generating lead advertisements

Surveying.

Providing customer service.

Advertising (Public Relations)

Pursuing collections.

Selling:

Telemarketing based selling involves outgoing or outbound solicitations for a firm'sproducts or services. Selling by telephone is the most profitable telemarketingapplication. With existing customers, it can be used to elicit reorders, sell additional

products or services, or increase the volume of products purchased. It can also resell

inactive customers, identify new prospects, and handle smaller customers that are notprofitable to sell in person. Incoming or inbound telemarketing must be used in

conjunction with some other method of promotion such as direct-response television

advertising, print placements, or direct mail. In this role, telemarketing primarilyinvolves order taking because the buyer sees an offer and calls to place an order.

Setting Qualified Appointments

Setting qualified appointments involves calling prospects, qualifying them, and settingappointments for sales people. Sales people have a variety of duties, they must perform

as part of their jobs, including preparing and giving face-to-face presentations, writing

proposals, and completing paperwork. As a result, they may have relatively little timeto prospect actively for new customers. A trained telemarketer who does little else

besides set appointments for salespeople usually becomes more and more proficient

and can often outperform salespeople in this role. Even though salespeople may havemuch more knowledge about the firm's product line, telemarketers can do better

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because of their concentrated focus on prospecting. Without the burden of prospecting

salespeople are free to spend more time selling, which sharpens their selling skills and

improves their closing ratios.

Generating lead advertisements

A lead-generating program provides a source of information about prospects who haveexpressed an interest in the product or service offered by a firm. As a result, the

prospect is contacted by a sales representative or is sent more information to stimulate a

sale. To ensure the success of lead-generating programs, the firm needs to manage adatabase of every lead. Sales representatives should fill out a contact form after each

appointment and each follow-up call. Data from these forms Become part of the

database.

Outbound telemarketing is only as effective as the prospect list it uses. A firm can have

its best product or service in the market place, but only a list of target market members

who are good prospects to make a purchase, will result in a successful campaign.

Therefore, it is imperative that the names of those telephoned are carefully selected.These lead advertisements may be either customers with whom the firm already has a

relationship or people who fit the profile of the firm's existing customers and thereforeshould have a propensity to buy.

SurveyingSome firms use telemarketing surveys to gather market data about customers and

prospects, including information about who makes the decisions in the household or

business, what the customer(s) product needs are, and any product purchasing plans.

This activity generates lead advertisements by identifying potential candidates forfuture selling. The information collected through survey is entered in a database for

future reference. Note, however, that the Direct Marketing Association (DMA) does

not consider it appropriate to attempt to disguise the purpose of a sales call byrepresenting it as a survey. It considers such a misrepresentation an unethical practice

and actively tries to discourage it.

Providing customer service

When telemarketing is used in connection with a customer service function, customer

call, for example, to inquire about where their order is, to complain that they have

received the wrong products, or to report that their shipment has been damaged. Aftersolving the customers problem, the customer service representative may take the

opportunity to announce new products or product modifications, along with price

information.

Advertising (Public Relations)

Advertising that serves public relations function involves calling companies orindividuals that could benefit from a firm's products or services and describing the

opportunity to them. Such calls are scripted in much the same way as general

advertising copy. The caller communicates information about a new product or service

or a modification to an existing product or service. No sales attempt is made on this

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kind of call because it just informs the other party of something he or she should find of

interest.

Pursuing collections

Credit department telemarketing does not sell a company's products or services. Rather,

it pursues receiving payment. Collections are an often the overlooked aspect oftelemarketing. The credit department's phone-related activities also include credit

verifications.

9. Inserts

Many publications offer to place flyers, inserts for direct marketers. Some readers find

it irritating but many respond well as they are the first thing in the journal that they see

& thus have an effective impact. Most inserts outperform sales advertisements but theytend to be three to six times more expensive depending on the quality of production.

For a direct marketer it means that your message is isolated from the run of the journal

& has the opportunity to stand out more effectively Prepaid reply cards & free phone

response numbers make it easy to for people to respond e.g. Computer Institutes

10. Videotext and interactive TV

Here the consumer's TV set is linked with a seller's catalog by cable or telephone lines

Consumers can place orders via a special keyboard device connected to the system

Much research is now going on to combine TV, telephones, and computers intointeractive TV

11. Short messaging service (SMS)

SMS is the written text service, which is sent from mobile to mobile and also, thoughless widely used, from PC to mobile and from digital TV set-top box to mobile. This is

often called 'message to mobile'. As this channel is fairly new, it has the benefit of

increased cut-through and impact on its audience who may still be receiving marketingthrough SMS for the first time. With SMS comes the promise of personal and local

marketing that is both interactive and immediate. However, because this is an

incredibly personal channel, care should be taken to ensure the message is targeted tothe right person, at the right time, with the right offer, or else the message can be lost

and damage done. Results have shown that the more interaction you have with the

receiver, and the more value you add, the better the response.

SMS communication should never be used as a stand-alone campaign. The media space

is simply not robust enough to communicate on its own. However, the combined

impact of brand activity and a strong timely offer through SMS can have a big impact.Mobile will enhance but not replace traditional marketing functions.

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