Download Direct Response Marketing

Direct Response Marketing
Chapter 11
The Importance of Databases in
IMC Planning
Can be used for identifying and building
relationships with customers through:
 Data-driven Programs
 Data-driven communications
 Direct response offers
Types of Databases
 Operational database
 Customer transactions
 Follows accounting rules
 Marketing database
 Current customer information
 Former customer information
 Prospect information
FIGURE
11.14
Methods of Direct Response Marketing







Mail
Catalogs
Telemarketing
Mass media
Alternative media
Internet
E-mail
FIGURE
11.10
Methods of Direct Marketing
77%
Direct mail to customers
73%
Direct mail to prospects
16%
Statement stuffers
24%
Catalogs
Direct response-promotions
21%
10%
Direct response-radio
Direct response-TV
8%
29%
Direct response-Internet
22%
Search engine marketing
17%
Search engine optimization
55%
E-mail to customers
E-mail to prospects
46%
16%
Inbound telemarketing
Outbound telemarketing
24%
0%
10%
20%
30%
40%
50%
60%
% of Companies Using Particular DM Methodology
70%
80%
90%
What’s Happening?
 Hey Denton this company is really cool. The
only have 2 products; One is green product
and the other is super innovative.
 Watch the video on there as well.
 http://www.origaudio.com/
 http://www.fastcompany.com/magazine/144/r
emember-when-bad-products-happen-to-bigcompanies.html?partner=homepage_newslette
r
Direct Marketing
 Direct connections with carefully targeted
individual consumers
 Message must appeal to target group
 Major problem is large volume of direct mail
received by both consumers and businesses.
 Intended to cultivate lasting customer
relationships
 Immediate and interactive in many cases
 A strong database allows precise targeting of
small groups
Direct Marketing, con’t
 Can be used as a supplement to existing
channels of communication or standalone
 Fastest growing form of marketing
Database Driven Marketing
Programs
 Permission marketing
 Frequency/loyalty programs
 Customer relationship management
Steps in Developing a
Permissions Marketing Program
 Obtain permission from the customer.
 Offer the consumer a curriculum over
time.
 Reinforce the incentive to continue the
relationship.
 Increase the level of permission.
 Leverage the permission to benefit both
parties.
Source: Seth Godin, “Permission Marketing: The Way to Make Advertising Work
Again, Direct Marketing, (May 1999), Vol. 62, No. 1, pp. 41-43.
FIGURE
11.9
Frequency Program Objectives
 Maintain sales, margins, or profits.
 Increase loyalty of existing customers.
 Induce cross-selling to existing
customers.
 Differentiate a parity brand.
 Preempt the entry of a new brand.
 Preempt or match a competitor’s
frequency program.
Source: Grahame R. Dowling and Mark Uncles, “Do Customer Loyalty Programs
Really Work?” Sloan Management Review, (Summer 1997), Vol. 38, No. 4, pp. 71-82.
Reasons Retailers Develop
Loyalty Programs
Reason for program
Promotes consumer loyalty
Increases “best shopper” sales
Gain consumer information
Maintain market share
Enhance image
Respond to competition
Source: A.C. Nielson, Santella & Associate
Indication %
90%
65%
65%
42%
29%
10%
FIGURE
11.7
Reasons Consumers Opt into an E-mail Frequency
Program
Sweepstakes or
chance to win
41%
Found site randomly
37%
E-mail required to
access content
38%
Already customer
40%
Friend recommended
24%
0%
5%
10%
15%
20%
25%
30%
Percent of Respondents
35%
40%
45%
Customer Relationship Management
Foundations:
 Customer Driven
 Database Technology
 Interactivity through websites, call
centers, and other means of contacting
customers
 Mass customization technology
Customer Relationship Management
 Two measures of CRM include
 Lifetime value
 Share of the customer
 CRM can be successful if:
 Firms differentiate customers in terms of their needs
and their value to the selling company
 Focus on relationships, not sales
 Be customer-driven, not technology-driven
 Customize some aspects of the goods or services
being offered to the customer