Direct Marketing

McGraw-Hill/Irwin
Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
QVC
$6.5 billion a year
2
nd
most profitable channel
Once sold 4,000 silver rings ($70) in
just 3 minutes
91 million homes
1 in 10 make purchase
40 to 60
Direct Marketing Defined
Radio
Direct Selling Magazine and Newspaper
Direct Mail
Telemarketing
TV 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
Growth of Direct Marketing
Technological
Advances
Changing
Structure of
Society
Consumer
Credit Cards
Miscellaneous
factors
Direct
Marketing
Syndicates
Changing
Structure of
Markets
Direct Marketing Combines With . . .
Advertising
Sales
Promotions
Public
Relations
Personal
Selling
Internet
Support
Media
Direct
Marketing
San Diego Encourages Visits
How Database Marketing Works
A Comprehensive Consumer Database
Name
Address/
Zip Code
Telephone
Number
Length of
Residence
Age
Gender
Marital
Status
Family
Data
Education
Income
Occupation
Transaction
History
Promotion
History
Inquiry
History
Unique
Identifier
A Business-to-Business Database
Contact Info
Contact
Title
Telephone
Number
Source of
order, inquiry,
referral
Credit
History
Industrial
Classification
Size of
Business
Revenues
Number of
Employees
Time in
Business
Headquarters
Location
Purchase
History
Promotion
History
Inquiry
History
Unique
Identifier
Test Your Knowledge
For market segmentation and targeting, direct
marketers rely most heavily on:
A) Primary qualitative research
B) Census data
C) A database
D) Survey responses
E) Focus groups
Objectives of Database Marketing
Improve Selection of
Market Segments
Stimulate Repeat
Purchases
Cross-selling Other
Products
Customer Relationship
Management
Objectives
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
List Services
Direct Marketing
Association
Standard Rate &
Data Service
U.S. Postal
Service
Simmons Market
Research Bureau
U.S. Census
Bureau
Sources
Effective Databases
RFM Scoring
Frequency
Recency
Monetary
transactions
Direct Marketing Strategies
One-Step
Two-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
Infomercials
Teleshopping
Print, catalogs Broadcast
TV Spots
Telemarketing
Direct Mail
Types of Direct Mail
House lists
Broadsides
Catalogs
Flyers
Folders
Inclusions
Postcards
Reprints
Sales letters
Self-mailers
All forms of advertising sent directly to
prospects through the U.S. Postal Service or
through private services
Porsche Targets Prospects with Direct Mail
Test Your Knowledge
Which of the following statements about the use of
catalogs in the direct-marketing industry is true?
A) Most business-to-business marketers use
print catalogs.
B) The number of catalogs mailed since
1984 has decreased significantly.
C) Many companies use catalogs in
conjunction with their more traditional
sales and promotional strategies.
D) No company today relies solely on catalog
sales.
E) The number of catalog shoppers has
declined steadily since 1984.
Success with Catalogs
TV Spots, Infomercials, and Homeshopping
Catalogs $19.2 billion 2007
TV $156 billion 2007
Infomercials
Single female 18 to 34 earning $50,000
to $99,900 per year
Tell a story
Good at Branding
Must have a store presence
A Direct Response Print Ad
Telemarketing
Inbound
Telephone calling by the
marketer or marketers
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.
Outbound
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 reach
Segmentation capabilities
Frequency potential
Flexibility
Timing
Personalization
Costs
Measures of effectiveness
Direct Marketing Disadvantages
Image
factors
Accuracy
Content
support
Rising
costs
Do Not
Contact lists