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Direct Marketing: The Dialogue Builder
For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
Chapter Outline

What are the strengths of direct
marketing?

What is the biggest strength of direct
mail? The biggest limitation?

What are the strengths and weaknesses of
telemarketing?

How can direct marketing efforts be
evaluated?

What are the major issues and concerns
related to direct marketing?
For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
Chapter Perspective
A big advantage of Direct Marketing over
Advertising and Sales Promotion:
Advertisin
g and
Sales
Promotion
Direct
Marketing
Very
Interactive
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Opening Case: Orange Glo
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Opening Case: Orange Glo
Challenge:
Expanding Orange Glo’s distribution
and profit
The use of a direct marketing program
featuring:
Answer:
Results:
• On-air demonstrations and direct selling on
Home Shopping Network
• 30-minute infomercials promoting and selling
its brands featuring Billy Mays as
spokesperson
• One of the fastest-growing private
companies
• $250 million in annual sales
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Direct Marketing
Direct marketing:
An interactive, databasedriven messaging system that
uses a range of media to
motivate a response from
customers and prospects
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Direct Marketing
2/3 of Americans
Respond Every Year
Direct
Marketing
4 Primary Media: Mail, Telephone,
Email, Infomercials
Also Known As Direct Response:
Because It Is Two-way in Nature
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Figure 18-1
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Direct Marketing’s Strengths
Interactive
Direct
Marketing
Strengths
Measurable
Fast and Flexible
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What Are Direct Marketing’s Strategies?
Front end strategies
Delivering the message
Back end strategies
Handling consumer responses and
delivering the product
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Front & Back End Components
Front End
Components
The Offer
Targeted
Databases
The
Response
Back End
Components
Fulfillment
Customer
Service
Privacy
Protection
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The Offer
The offer: Everything, both
tangible and intangible,
promised by a company in
exchange for money or some
other desired behavior
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An Offer From an Exclusive Resort
+
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IMC In Action: 1-800-Flowers
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IMC In Action: 1-800-Flowers
Challenge:
Promoting and delivering flowers
nationwide
The use of an IMC program featuring:
Answer:
Results:
• TV, radio, and direct mail messages
delivering the offer
• 1-800-FLOWERS; web site, handling
responses
• 2,500 local florists fulfilling orders
Named “top gift site on the web”
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Direct Mail
Direct mail: One form of
direct response advertising that
uses mail rather than other
media to deliver a brand offer
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An Example Of a Set Of Materials In a Mail Package
+
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Strengths And Limitations Of Direct Mail
Strengths
Limitations
• Addressability
• Can receive more
attention than
advertising
• Not as much clutter as
advertising
• Message can be
tailored to any size or
shape
• Postage can be costly
• Some offers can be
costly to produce
• Complex offers can
require long lead times
Vs.
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Telemarketing
Telemarketing: The practice of
using the telephone to deliver a
brand message designed to create a
sale or sales lead
Controversial…
… but Big Business
43 Billion
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Figure 18-2: A Range of Automated
Phone System Options
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Strengths And Limitations Of Telemarketing
Strengths
• Personal
• Addressability
• Interactive
Limitations
Vs.
• Human callers can
be costly
• Intrusive
(unwanted calls)
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How Can Direct Marketing Efforts Be Evaluated?
List Types
Frequency of
Exposure
Offer Values
Testing
Creative
Approach
Media Mix
Used
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Ultimate Test: Effectiveness
Number of responses
Number of offers mailed
5
/ 100
Total cost of mailing
Number of sales made
$1,000 / 5
=
Response
Rate
=
20
=
Cost
Per Sale
=
$200
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Insight: Tracking Customer Costs/Profits
Direct marketers are very proficient
tracking their costs and profits
because the medium is the easiest
to measure in terms of cost per
sale. One rule of thumb: in most
direct-marketing programs, a
customer isn’t profitable until the
third time he or she buys.
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Think About It
Email Campaign
If you had to design an e-mail campaign for
your organization, how would you make it
appealing and not just annoying spam?
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Tales From the Real World
The public often wonders: “how did they
get my name (or address, phone number, or
email account)?”
In the real world, it’s fairly easy to acquire a
database list of many different types of
individuals. In fact, it’s amazing how specific
some of the lists can be. Some examples of lists
offered for sale by a list broker in their catalog:
“accupuncturists,” “golfers,” and “nuclear
physicists.”
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Final Note:
• The increasing amount of clutter
and privacy concerns suggests that the
Direct Marketing winners will be those
organizations who:
• Are creative in making their appeals
stand out
• Are sensitive to consumer privacy
concerns
For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin