Download Optimal Chapter 15 - Cal State LA

Optimal Database Marketing Drozdenko & Drake, 2002
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Chapter 15
Marketing Databases
and the Internet
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Objectives
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Examine basic Internet Strategy.
Examine database integration access DM
media.
Review growth patterns for Internet marketing.
Examine basic advantages and disadvantages
of Internet Marketing.
Examine communication options with e-mail.
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Internet Marketing Strategy
• Developing a strategy for Internet database
marketing is fundamentally similar to developing
strategies for other direct marketing media.
• Focusing on customer relationships and repeat
business will be more profitable over the long
term versus focusing on single transactions.
• Cross selling is also an important strategic option
that applies to all direct marketing channels.
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Database Integration
• An integrated database allows multiple communications
and transactions to be tracked, regardless of whether by
phone, mail, Internet, wireless devices (m-commerce, or
mobile commerce), or at a physical retail location. Indeed,
the integrated clicks and mortar (aka clicks and bricks)
approach is more common than single-channel marketing
on the Internet.
• A study by the Boston Consulting Group of 400 online
retailers showed that the clicks and mortar retailers
accounted for 62% of online revenues, whereas pure online
retailers accounted for 38%.
• The multichannel retailers have an advantage over the
single-channel Internet marketers. They spend less to
acquire customers, have lower marketing expenses, and
have more repeat business.
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Traditiona
l Mail
Telephon
e
Internet
Wireless
Integrated
Database
System
Customer
Record
Updating
Data
Analysis
and Data
Mining
Systems
Strategy
and
Program
Development
E-Mail
Physical
Location
Exhibit 15.1 Possible Inputs Into the Database for a Multichannel Marketer
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Growth in Internet Commerce
• Internet commerce is experiencing a dynamic
growth at this time.
• While the predictions vary widely, there is
consensus that both consumer and b-to-b
Internet marketing will continue to grow over
the next several years.
• Service seems to be an important aspect of
Internet commerce and Internet marketers
will have to develop effective and efficient
methods of interacting with customers.
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The Internet Versus Other
Database Marketing Media
The Internet has potential cost savings in the
following areas:
• Postal expenses
• Paper
• Transaction
• Service (possibly)
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The Internet Has the Following Potential
Advantages Over Other
Database Marketing Media
• Larger display of products
• 3-D representation
• More Frequent Catalog and
Product Updates
• More Technical Information
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Speed
Testing Offers
Customer service
Contact Initiation
Real-time analysis
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Benefits of Online Ordering In the
B-to-B Market
• It improves your company’s productivity by have
customers order products and service online anytime
• It knows where a customer’s order is in the
manufacturing and shipment process and how soon to
expect delivery.
• It provides up-to-date product quotes to your
company’s clients by accessing the most current price
lists.
• It stays current with your company’s accounts payable
and measures how expenses are tracking to your
budgets.
• It reduces the time it takes from submitting an order to
receiving the product
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Limitations of Internet Marketing
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Control of offers and promotions on the Internet
Pictures and graphics- load time, resolution
Customer concerns about privacy and security
Target group access
Driving traffic to a site
Poor Reputation relative to brick and mortar
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Personalization: The Great Promise of the
Internet
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Customers can receive personalized
information on the Internet in several ways:
Tailored e-mail
Personalized Web pages
Cookies
Personalized Wireless Communications
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E-Mail Marketing
• Because of cost sayings and other benefits, Email marketing is predicted to increase in the
next several years.
• Although growing, e-mail lists are currently
relatively small compared to paper mail and
telemarketing lists.
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E-Mail Applications
• Informing customers of new products
• Offering incentives (e.g., discounts, special offers) to
customers
• Contact a targeted group of non-customers that have
some similar characteristics to current customers
• Provide periodic (daily, weekly, monthly, etc.)
information to customers in the form of newsletters,
news briefs or other relevant information
• Follow-up contacts to people who have visited your
website, trade show booth, etc.
• Update customers on order status
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E-Mail and Permission
• It is important to differentiate between opt-in lists and
lists that do not have the permission of the e-mail
recipient to receive messages from list users.
• Verified opt-in requires an e-mail response after a
person registers on a site and gives permission.
• “Non-permission” e-mail lists can also be acquired.
Some e-mail list providers use computer programs that
“harvest” e-mail addresses from websites.
• The term “spamming” refers to e-mail campaigns that
are sent to recipients who did not specifically give
permission for commercial e-mail of a specific type to
be sent to them.
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E-Mail Formats
A number of formats have been used for e-mail
marketing.
• At a basic level, the same e-mail message can be sent
to all recipients. This is the cheapest and quickest
method. However, because of the lack of
personalization, software filters set up by the recipient
or the ISP may screen out this type of message
• Personalized messages are also possible. Information
from a database, such as first name, product ordered,
inquire date, etc., can be inserted into the message to
make it more relevant to the recipient.
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E-Mail Formats…
• Additionally, e-mail messages can contain
attachments such as document, picture or sound
files and links to websites that the recipient can
use to place an order or obtain more
information.
• E-mail marketing can also be in the form of an
individual offer, newsletters or periodic interest
pieces. Daily e-mails are sent to customers on a
topic of interest.
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Review Questions
1. Discuss the advantages and limitations of
Internet marketing.
2. Explain the concept of integrating databases
across direct marketing channels.
3. What are the customer service possibilities
on the Internet?
4. What methods are used to personalize
communications on the Internet?
5. What are some of the customer variables that
are collected on the Internet?
6. What are the differences between traditional
print and e-mail lists?
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