Direct Response

Part 5: Integration and Evaluation Chapter 15

Chapter Outline
I. II. III. IV. V. VI. VII. Chapter Key Points The Practice of Direct Marketing Database Marketing The Key Players The Tools of Direct Marketing Integrated Direct Marketing Global Considerations in Direct Marketing
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Chapter Outline
I. II. III. IV. V. VI. VII. Chapter Key Points The Practice of Direct Marketing Database Marketing The Key Players The Tools of Direct Marketing Integrated Direct Marketing Global Considerations in Direct Marketing
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The Practice of Direct Marketing

Occurs when a seller and customers deal with each other directly rather than through an intermediary
Four tools of direct marketing
Catalog Direct mail Telemarketing Direct response advertising

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The Practice of Direct Marketing

Now communication is becoming a dialogue. Using computers and the Web, the mail, video, and the telephone, Advertisers can talk directly with, rather than at, customers.

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Advantages of Direct Marketing

Collection of relevant customer information Purchase not restricted to a location The marketer controls product until delivery Easier to evaluate Flexibility in form and timing Advertising carrying direct-marketing components is more effective
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Disadvantages of Direct Marketing

Consumers are still reluctant to purchase a product they have not seen or touched especially when they purchase it online Annoyances associated with direct marketing, such as too many catalogs, junk mail, and calls during dinner Unable to reach everyone in the marketplace

Direct marketing tends to be attuned to driving immediate sales, creating tension between creating a long-term brand image and driving immediate sales.

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Difference between Direct Marketing & Direct Response Advertising

Direct Marketing is a way of doing business that produces sales as the result of a direct contact between the marketer and the customer without any intermediaries. Direct-response advertising is a type of marketing communication that combines the characteristics of advertisingattention-getting visuals, interesting copy, and relevant timingbut also includes an element that allows the reader, viewer, or listener to make a direct response to the advertiser. The contact element can be a toll-free 800 or 900 phone number, an order coupon, a request-for-information device, a Website, or an E-mail address.
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Direct-Response Advertising
Combines the characteristics of advertising with a contact element The direct-marketing process
Objectives and making strategic decisions Communication of an offer by the seller through the appropriate medium. Response or customer ordering. Fulfillment or filling orders and handling exchanges and returns. Maintenance of the companys database and customer service.
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Database Marketing
A practice that uses databases to predict trends and monitor consumers
Four primary objectives
Record names of customers Store and measure results of advertising Store and measure purchasing performance Vehicle for continuing direct communication

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The Database Marketing Process

1. 2. 3. 4. 5. 6. 7. Collection point Data entry Data assessment Data clustering Data application Data sharing Data refinement
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Customer Relationship Management (CRM)

Customer relationship management (CRM) is a result of the improved management of information contained in customer databases. CRM identifies and analyzes patterns in customer behavior to maximize the profitability of reach relationship. CRM is highly developed database software that establishes links between transactions and the corresponding customers characteristics. Armed with this knowledge, the company can pursue strategies to improve services that are important to their most profitable customers, attract new customers with similar characteristics, reward best customers, and identify and eliminate those customer relationships that drain company resources.
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The Key Players

Advertisers Agencies Media Companies Customers

Companies whose primary business is selling products and services by mail or telephone Retail stores who use direct marketing as a supplement to other forms of marketing communication

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The Key Players

Advertisers Agencies Media Companies Customers

Advertising agencies Independent agencies Service firms Fulfillment houses

Service firms specialize in supplying printing and mailing and list brokering.

Fulfillment houses: The fulfillment house is a type of service firm that is vital to the success of many direct-marketing strategies. This is a business responsible for making sure consumers receive whatever they request in a timely manner, be it a catalog, additional information, or the product itself.

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The Key Players

Advertisers Agencies Media Companies Customers

The media that deliver messages by phone, mail, or the Web Websites, and E-mail

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The Key Players

Advertisers Agencies Media Companies Customers

Recipients of the information and sometimes the initiator of the contact

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The Tools of Direct Marketing: Direct Mail Practical Tips A print Get attention advertising Create a need message for a Answer questions product or Provide critical information service that is Inspire confidence, delivered by minimize risks mail Make the sale
Use an incentive
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The Tools of Direct Marketing: Direct Mail

Advantages Tells a story Engages attention Personalizes message Builds in feedback Reaches the unreachable Disadvantages Negative perceptions Cost Mailing list Response rate Vulnerability

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The Tools of Direct Marketing: Catalogs

A multi-page direct-mail publication that shows a variety of merchandise Growth in this field is in the area of specialty catalogs Video catalogs provide more information about products

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Covered till here with Sec G

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The Tools of Direct Marketing: Catalogs

Advantages Targeted Engages attention Complete information Convenience Disadvantages Negative perceptions Costs Response rate Mailing list

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Tools of Direct Marketing: Telemarketing

More direct-marketing dollars are spent on telemarketingads delivered through phone callsthan any other medium. Thats because telemarketing is almost as persuasive as personal sales, but a lot less expensive. Callers work in call centers, which are rooms with large banks of phones and computers. Most calls are made from databases that contain prospects who were previously qualified on some factor, such as an interest in a related product or a particular profile. Occasionally cold-calling is used, which means the call center staff are calling unqualified numbers, sometimes just randomly selected, and this practice has a much lower response rate.

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Tools of Direct Marketing: Telemarketing

Types of telemarketing
An inbound or incoming telemarketing call originates with the customer. The consumer can be responding to an ad or a telemarketing message received earlier. Calls originating with the firm are outgoing; these outbound telemarketing calls are the ones that generate the most consumer resistance.

Criticisms of telemarketing
Perhaps the most universally despised telemarketing tool is predictive dialing. Predictive dialing technology makes it possible for telemarketing companies to call anyoneeven those with unlisted numbers. Special computerized dialing programs use random dialing, Fraudulent behavior

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Telemarketing
Telemarketing messaging design
The key point to remember about telemarketing solicitations is that the message has to be simple enough to be delivered over the telephone. The message also has to be compelling and short.

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What lies in Common in all Direct-Response Advertising

All direct-response advertising moves the consumer to action Well-targeted Reaches prime audience

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The Internet and Direct Response

Direct marketingparticularly catalog marketingis the model for E-commerce. The Internet provides the same components found in direct mail and telemarketing. The Web is moving marketers much closer to one-to-one marketing. The Internet is also providing companies with new ways to gather information on consumers. One of the more ambitious is allowing consumers to create their own network of contacts for marketers to promote across. The Internet has facilitated the ease in producing and distributing traditional direct mail. Together they have brought the benefits of highly personalized, inexpensive messages to far-reaching mass campaigns.
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Integrated Direct Marketing

The challenge in DM is to integrate direct mail, catalogs, telemarketing, Web sites, email, text messaging, and instant messaging with other marketing communication
Integrated direct marketing (IDM)

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Global Considerations in Direct Marketing

Fueled by the same technological forces as in the U.S. Particularly important in countries with tight restrictions on advertising Potential restrictions on direct marketing
Privacy issues more intense Governmental regulation of postal service

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