Transcript Chapter 14
14 Direct Marketing 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 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 TV Selling Radio Telemarketing Direct Selling Direct Mail Magazine and Newspaper Growth of Direct Marketing Direct Marketing Syndicates Consumer Credit Cards Miscellaneous factors Changing Structure of Society Changing Structure of Markets Technological Advances Direct Marketing Combines With . . . Advertising Public Relations Internet Direct Marketing Support Media Personal Selling Sales Promotions San Diego Encourages Visits How Database Marketing Works A Comprehensive Consumer Database Name Gender Occupation Address/ Zip Code Marital Status Transaction History Telephone Number Family Data Promotion History Length of Residence Education Inquiry History Age Income Unique Identifier A Business-to-Business Database Contact Info Industrial Classification Headquarters Location Contact Title Size of Business Purchase History Telephone Number Revenues Promotion History Source of order, inquiry, referral Number of Employees Inquiry History Credit History Time in Business 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 Objectives Cross-selling Other Products Customer Relationship Management • 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 Standard Rate & Data Service Simmons Market Research Bureau Sources U.S. Census Bureau U.S. Postal Service Direct Marketing Association Effective Databases RFM Scoring Monetary transactions Recency Frequency Direct Marketing Strategies One-Step Two-Step • The medium is used directly to obtain an order • May use one medium to obtain inquiry and qualify prospect • Often use 800 number phone orders and credit card payment • Typically follow up with a second medium to complete the sale Direct-Marketing Media Infomercials Telemarketing Print, catalogs Broadcast Teleshopping TV Spots Home shopping Direct Mail Types of Direct Mail All forms of advertising sent directly to prospects through the U.S. Postal Service or through private services House lists Inclusions Broadsides Postcards Catalogs Reprints Flyers Sales letters Folders Self-mailers 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 Outbound Telephone calling by the marketer or marketer’s agent to individual prospects, seeking purchase, subscription, membership, or participation by the call recipient. Inbound Marketers facilitate and invite prospects to call a central location via a long distance number, by a tollfree 800 number, or a fixed-cost 900 number. 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 Accuracy Image factors Do Not Contact lists Content support Rising costs