Chapter 3:

Graces of Direct
Marketing
WHAT IS THE PURPOSE OF DIRECT
MARKETING?

To isolate your prospects and

customers as individuals and build a
continuing relationship with them – to
their greater benefit and your greater
profit.

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THREE GRACES OF MARKETING

Using knowledge you

acquire about them and
1st: when you isolate
their relationship with
someone as an
you, you will be able to
individual, this
make appeals which
automatically implies
are far more convincing
that you discover what
to them. You can do this
differentiates them from
by placing that
other individuals.
knowledge on a
computer database.
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THREE GRACES OF MARKETING
2nd: You can build a This will bind them to
continuing you for a longer
relationship with period. And since in
these people by most commercial
offering them activity your most
services and expensive activity is
products which your recruiting the
knowledge of them customer, the longer
tells you are likely to you can keep that
appeal. customer, the better.
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THREE GRACES OF MARKETING

3rd: it has the most

obvious allure to the
virgin direct
marketer. And that’s
the ability to TEST.

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THREE GRACES OF MARKETING

Having done so you can

To measure the response
conduct further tests and
from particular individuals
constantly improve the
to particular messages at
effectiveness of your
particular times you can
activities. You can spend
find out what works and
your money where it does
what doesn’t.
the most good.

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7
THREE Direct Marketing is as splendid way of making
GRACES OF and keeping a customer.
DIRECT - Theodore Levitt
MARKETING
Properly conducted, it enables you to get quite
close to the aim of marketing.
- Peter Drucker

If you have enough knowledge about

somebody on your database, you can
approach that wonderful situation where
product fits the customer and sells itself.
8

HOW IS 200 years ago, almost all relationship

CUSTOMER between manufacturers and customers
CHANGING? were very simple.

The manufacturer of the product also

sold the product to the customer.
This form of selling enables the
manufacturer to have warm, personal,
direct relationship with the buyer, and
also to know a lot about the buyer’s
personal requirements.
9

HOW IS CUSTOMER
CHANGING?
▫ In 19th century, the 2nd stage of marketing
was developed.
▫ New technology made mass production
possible.
▫ Manufacturers sold via wholesalers and
retailers.
▫ For the manufacturer, the same technology
led to new printing machinery which made
mass advertising possible.
10

HOW IS CUSTOMER
CHANGING?

▫ Millions of identical messages could

be addressed by the manufacturer to
the ultimate consumer.
▫ However, the personal relationship
the individual merchant had with his
customers was lost.
11

HOW IS CUSTOMER
CHANGING?
▫ Direct marketing inaugurates the 3rd
stage of marketing.
▫ Reason: new ability to personalize
messages to people – vie telephone,
printed materials etc.
▫ Now, thanks to the database which tells
you all about your customers’ needs,
you can renew that direct personal link
began to lose 150 years ago.
12 HOW IS
CUSTOMER
CHANGING?
▫ The important point must
be made that companies
tend to look at their
marketing activities very
much from an internal
point of view.
▫ This is below the line, this
is above the line, this is
sales promotion, this is
public relations, and so on.
13 HOW IS
CUSTOMER
CHANGING?
▫ To them it is all news
and information or
offers from a particular
company.
▫ This in itself is a
powerful argument for
making sure all these
things are planned
together.
CONTROLLABILITY: AN IMPORTANT BENEFIT

Direct makes
Considerable
Marketing appeal

because

Very When
properly
controllable
conducted
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 CONTROLLABILITY: AN IMPORTANT
BENEFIT
1st

content timing Can be

controlled

2nd

Can be predicted
costs controlled results
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16
EVERY MESSAGE GOES OUTAS YOU
WANT IT TO:
▫ Using the style of language you
think suits your company and
your market;
▫ In the order you’ve determined
is best calculated to sell;
▫ In the typeface you select, with
the design you think reflects
your image best;
▫ At the time you want it to…
when you’ve learned it will get
the maximum response;
▫ Even a phone call will be
handled by your phone
communicator just as your
script lays down.
Controllability: An Important Benefit

2nd benefit
You can predict future
responses and thus how much
money you need to achieve a
given result.
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 CUT DOWN THE RISK
Few businesses offer much guarantee of
success before you invest your money.
The risk is high largely because you don’t
control the situation enough.
But direct marketing allows you to test how
people feel about your product and offer and
price.

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 COMING UP NEXT!
• Relationship Marketing
• Characteristics of Relationship Marketing
• Customer Relationship Management
• CRM Building Blocks
• Benefits of CRM

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20
CUSTOMER Relationship Marketing
RELATIONSHIP
: CUSTOMER
SERVICE Integrated effort to identify, maintain,
and build-up a network with individual
consumers and to continuously
strengthen the network for the mutual
benefit of both sides, through
interactive, individualized and value-
added contacts over a long period of
time.
21
CUSTOMER
RELATIONSHIP Marketing oriented toward strong,
: CUSTOMER lasting relationships with individual
SERVICE accounts.
The understanding, explanation and
management of the on-going
collaborative business relationship
between suppliers and customers.
A customer centered approach whereby
a firm seeks long-term business
relations with prospective and existing
customers.
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Is a phrase that describes how your business
CUSTOMER interacts with your customers.
RELATIONSHIP
MANAGEMENT Most people think of CRM as a system to
capture information about your customers.

CRM involves using technology to gather the

intelligence you need to provide improved
support and services to your customers.

CRM is about what you do with that

information to better meet the needs of your
existing customer and identify new customers.
23

THE CRM BUILDING

BLOCKS
▫ A database that collects information
about your customers.
▫ A way to analyze the information in
the database.
▫ A strategy for applying the analysis to
better meet your clients’ needs and
identify potential customers.
▫ Collecting data to ensure your
strategy is effective.
24

CHARACTERISTICS OF
RELATIONSHIP MARKETING
▫ Relationship marketing is about having
healthy relationships which are characterized
by concern, trust, commitment and service.

▫ CONCERN: Relationship marketers are

concerned for the welfare of their
customers. They want to meet or, preferably
exceed customer expectations, producing
satisfaction or delight.
25

CHARACTERISTICS OF
RELATIONSHIP MARKETING
▫ TRUST AND COMMITMENT: are ‘key’ because
they encourage marketers to
(i) Work at preserving relationship investments
by cooperating with exchange partners.
(ii) Resist attractive short-term alternatives in
favour of the expected long-term benefits of
staying with existing partners, and
(iii) View potentially high risk actions as being
prudent because of the belief that their
partners will not act opportunistically.
26

CHARACTERISTICS OF
RELATIONSHIP MARKETING
▫ TRUST AND COMMITMENT
▫ When commitment and trust – not
just one or the other – are present
they produce outcomes that
promote efficiency, productivity and
effectiveness.
 CHARACTERISTICS OF
RELATIONSHIP MARKETING
SERVICE:
Since RM is a means to a profitable end relationship
marketers must believe that excellent service produce
improve profitability.
Service quality leads to customer satisfaction which
leads to relationship strength, which leads to relationship
longevity, which leads to customer relationship
profitability.

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 BENEFITS OF CRM
CRM is about making each and every customer feel like they
have one-to-one relationship with you. Effective CRM gives
you the opportunity to show your customers that:

o You know and recognize them

o You understand them
o You care about their needs, questions and concerns
o You want to deliver services and products they need the
most
o You appreciate their business
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CRM will also benefit your company by allowing
you to:
Develop superior services and products that meet
your customer’s identified needs.
Enhance marketing towards the most profitable
customers to improve your bottom line.
Improve efficiency by providing support and
services to customers online.
Anticipate future business needs on data on
historic sale and service trends.
Increase your customer base as you develop new
ways to engage in business online.

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 CRM seeks to answer 2 questions:

1. Who are my customers?

2. How can I serve them better?

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 Type of Information
Customer Profile
Customer buying profile
Customer buying preference
Customer service profile
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Questions
• Who are they?
• Are they a business or a person?
• Where are they located?
• How often do they buy?
• When do they buy?
• How much do they buy at one time?
• What do they buy?
• Do they always buy the same thing?
• Why do they buy it?
• What kinds of problems/issues do
they encounter?
• What is the current status of their
issues?
32
By compiling this information and analyzing it,
BUILDING you can then build a strategy with this
VALUE FOR information to:
YOU
Maximize repeat business opportunities by
anticipating your existing customers’ needs.
Identify your best customers.

Identify potential customers.

Identify complementary products you can sell to

your customers.

Target marketing campaigns/materials and

promotions.
33

BUILDING VALUE FOR

CUSTOMER
▫ Make order or buying easier through pre-filled
order forms and e-mail reminders.

▫ Tailor the shopping experience for your

customers and allow self-service to reduce
customer wait times.

▫ Develop an e-newsletter or blog with topics

that would be of interest to customers to earn
their loyalty.
34

BUILDING VALUE FOR

CUSTOMER
▫ Quickly share updates and respond to
comments/feedback from customers through
social media channels such as Twitter.
▫ Offer an online forum where customers can
provide reviews and feedback; this also allows
you to hear about problems as they emerge
and respond quickly.
▫ Offer free products to your best customers
▫ Offer incentives for additional or future
purchase.
35

IMPORTANT TIPS FOR SUCCESSFUL

RELATIONSHIP MARKETING

1. Listen to customers.
▫ They’ll tell you what they need from you if you’ll just
take the time to listen and make them feel
comfrotable. If they don’t volunteer information, ask
questions to uncover their problems and needs.

2. Be honest.
▫ Don’t try to sell something that’s not needed. Likewise,
if you cant fulfill particular customer needs, tell them,
and try to help them find someone who will.

3. “Get in front of your customers”

▫ Through the mail
36
By testing you can produce
THE SPIRAL OF more effective offers and
messages. Thus you will either:
CONSPIRACY
1. Recruit the same number of
customers for less money
per name;
2. You can get a greater
number of customers for
the same investment
3. Your money could bring in a
better quality of customer
37
▫ You will be communicating
THE SPIRAL OF regularly with these
CONSPIRACY customers and, once again,
testing will lead to better
use of the database you
have built up.
▫ You will be able to make it
profitable in 3 ways:
1. You will find ways to
segment the database and
thus exploit it more
effectively.
38
2. You will introduce new offers
THE SPIRAL OF and new products likely to
appeal to the individuals on
CONSPIRACY your database – base on
what you have learned about
them – thus enabling you to
communicate more
frequently and make more
profit.
3. You will also be testing new,
more imaginative
communications so as to get
better responses to those
offers you are making.
Thanks!
Any questions?

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