Direct marketing

Definition
• Direct marketing (DM) = a system of marketing by
which organizations communicate directly with target
customers to generate a response or transaction
• DM uses direct-response media:
– Direct mail
– Telemarketing
– Interactive TV
– Print
– Internet
– Other media
1
 Growth of Direct Marketing
• Consumer acceptance of catalogs
• Consumer credit cards
• Direct-marketing syndicates
• Structure of North American society
– Money-rich but time-poor
– Increased popularity of non-shopping activities
• Technological advances
• Improved image of DM
2
 Evaluation of Direct Marketing
• Strengths
– Selective reach
– Segmentation capabilities
– Frequency
– Flexibility
– Timing
– Personalization
– Costs
– Measures of effectiveness
3
 Evaluation of Direct Marketing
• Limitations
– Image factors
– Accuracy
– Content support

4
 Direct Marketing in the IMC
Program
• Combining direct marketing with advertising
• Combining direct marketing with public
relations
• Combining direct marketing with personal
selling
• Combining direct marketing with sales
promotions

5
 Planning the
Direct Marketing Program
• Objectives
– Normally behavioral
• Usually a set response rate (e.g., 2 to 3%)
– Sometimes non-behavioral:
• Build image
• Maintain customer satisfaction
• Inform/educate customers, which may lead to future
actions

6
 Planning the
Direct Marketing Program
• Developing a database
– Database marketing = use of specific information
about individual customers and/or prospects to
implement more effective and efficient marcoms *
– Functions of the DM database:
• Improving selection of target segments
• Stimulate repeat purchase
• Cross-sell
• Customer relationship management (CRM)
7
 Planning the
Direct Marketing Program
• Developing a database (continued)
– Sources of database information
• Statistics Canada
• Canada Post
• List services
• Info Canada
• Marketing research houses
• Loyalty programs
• Other
– Important to purge and update
• RFM scoring 8
 Planning the
Direct Marketing Program
• Direct-marketing media strategy
– One-step approach
– Two-step approach

9
 Planning the
Direct Marketing Program
• Direct-marketing media strategy (continued)
– Media
• Direct mail *
• Catalogs
• Broadcast media
– Direct-response advertising
– Support advertising
– Infomercials
– TV advertorials
– Teleshopping
• Print media
• Telemarketing
10
 Planning the
Direct Marketing Program
• Effectiveness measures
– For immediate behavioral response objectives
• Cost per order (CPO)
– For other objectives
• Traditional measures of advertising effectiveness

11
 Contents of a
Comprehensive Database
Consumer database
• Name
• Address/postal code
• Telephone number
• Length of residence
• Age
• Gender
• Marital status
• Family data (# kids, etc.)
• Education
• Income
• Occupation
• Transaction history
• Promotion history
• Inquiring history
• Unique identifier
B2B database
• Name of company/contact/decision maker
• Title of contact\
• Telephone number
• Source of order/inquiry or referral
• Credit history
• Industrial classification
• Size of business
• Revenues
• Number of employees
• Time in business
• Headquarters location
• Multiple locations *
• Purchase history
• Inquiry history 12
• Unique identifier