Direct MarketingDirect Marketing
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McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
QVC
• $6.5 billion a year• 2nd most profitable channel• Once sold 4,000 silver rings ($70) in
just 3 ½ minutes• 91 million homes• 1 in 10 make purchase• 40 to 60
Direct Marketing Defined
RadioRadio
Direct SellingDirect Selling Magazine and NewspaperMagazine and Newspaper
Direct MailDirect MailTelemarketingTelemarketing
TV SellingTV 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
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
Technological Advances
Changing Structure of
Society
Changing Structure of
Society
Consumer Credit Cards
Consumer Credit Cards
Miscellaneous factors
Miscellaneous factors
Direct Marketing Syndicates
Direct Marketing Syndicates
Changing Structure of
Markets
Changing Structure of
Markets
Direct Marketing Combines With . . .
AdvertisingAdvertising
Sales Promotions
Sales Promotions
Public Relations
Public Relations
Personal Selling
Personal Selling
InternetInternet
Support Media
Support Media
Direct Marketing
Direct Marketing
San Diego Encourages Visits
How Database Marketing Works
A Comprehensive Consumer Database
Name
Address/Zip Code
TelephoneNumber
Length ofResidence
Age
Gender
MaritalStatus
FamilyData
Education
Income
Occupation
TransactionHistory
PromotionHistory
InquiryHistory
UniqueIdentifier
A Business-to-Business Database
Contact Info
Contact Title
TelephoneNumber
Source oforder, inquiry,
referral
CreditHistory
IndustrialClassification
Size of Business
Revenues
Number ofEmployees
Time in Business
HeadquartersLocation
PurchaseHistory
PromotionHistory
InquiryHistory
UniqueIdentifier
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
Improve Selection of Market Segments
Stimulate Repeat Purchases
Stimulate Repeat Purchases
Cross-selling Other Products
Cross-selling Other Products
Customer Relationship Management
Customer Relationship Management
ObjectivesObjectives
• 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 ServicesList Services
Direct MarketingAssociation
Direct MarketingAssociation
Standard Rate &Data Service
Standard Rate &Data Service
U.S. Postal Service
U.S. Postal Service
Simmons MarketResearch BureauSimmons MarketResearch Bureau
U.S. Census Bureau
U.S. Census Bureau
SourcesSources
Effective Databases
RFM ScoringRFM Scoring
FrequencyFrequency
RecencyRecency MonetarytransactionsMonetary
transactions
Direct Marketing Strategies
One-StepOne-Step Two-StepTwo-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
Home shopping
InfomercialsInfomercials
TeleshoppingTeleshopping
Print, catalogsPrint, catalogs BroadcastBroadcast
TV SpotsTV Spots
TelemarketingTelemarketing
Direct MailDirect Mail
Types of Direct Mail
House listsHouse lists
BroadsidesBroadsides
CatalogsCatalogs
FlyersFlyers
FoldersFolders
InclusionsInclusions
PostcardsPostcards
ReprintsReprints
Sales lettersSales letters
Self-mailersSelf-mailers
All forms of advertising sent directly to prospects through the U.S. Postal Service or
through private services
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
InboundInbound
Telephone calling by the marketer or marketer’s 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.
OutboundOutbound
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 reachSelective reach
Segmentation capabilitiesSegmentation capabilities
Frequency potentialFrequency potential
FlexibilityFlexibility
TimingTiming
PersonalizationPersonalization
CostsCosts
Measures of effectivenessMeasures of effectiveness
Direct Marketing Disadvantages
ImagefactorsImagefactors
AccuracyAccuracy
ContentsupportContentsupport
Risingcosts
Risingcosts
Do NotContact lists
Do NotContact lists
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