Direct Advertising and Database Marketing

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Direct Advertising and Database Marketing

• 13

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Did you know?

• The industry average for direct mail is a meager
  0.3.

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Some staggering facts ...
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Chapter Thirteen Objectives

• Explain direct marketing and the reasons
  underlying its growth
  
• Describe the characteristics of direct-response
  advertising
  
• Discuss the distinctive features of direct mail
  advertising

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Chapter Thirteen Objectives

• Explain the role of databases
• Perform lifetime value analyses of database
  entries
  
• Discuss the features and advantages of outbound
  and inbound telemarketing
  
• An introduction to CRM

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Direct Marketing

• Direct Marketing
• An interactive system of marketing
• which uses one or more advertising
• media to effect a measurable response
• and/or transaction at any location

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Distinctions Among Various Direct Concepts
Marketing
Indirect Marketing
Direct Marketing
Direct Response Advertising
Tele- marketing
Direct Selling
Direct Mail
Other Media
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Growth of Direct Marketing

• Societal changes
• Computer technology and database management
• Niche marketing

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Direct Response Advertising

• How different is it from mainstream advertising
• Definite offer
• All information necessary to make a decision
• Includes a response device

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Direct-Response Advertising

• Illustration of
• direct- response
• advertising

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Direct-Response Advertising

• Another illustration
• of direct- response
• advertising

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Direct Response Advertising
West Virginia Tourism
Fahlgren
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Cannes Gold - 2002

• Reaching the parents pockets through the childs
  dreams!
  

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The Importance of an Idea!

• If your campaign doesnt have a big idea, it
  will pass like a ship in the night.
  
• David Ogilvy

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Importance of an Idea!
Simple ideas are easily explained.
Simple ideas last a long time.
Simple ideas are easily recognized.
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BIG, simple ideas translate across media very
easily.
SMSs, posters, TV commercials
Increased Church Attendance 75
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Why Direct Advertising?

• Customer Retention
• Building Loyalty
• Referral Programs
• Increase Depth / Cross-sell

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Direct Mail

• Direct-Mail Advertising
• Refers to any advertising matter sent
• directly to the person whom the marketer
• wishes to influence

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Direct Mails Distinctive features

• Targets specific markets
• Measures success immediately
• Permits personalization
• Gains prospects undivided attention
• No constraints on size, color, form
• Relatively simple and inexpensive to change ads

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Trend Toward Direct Mailing

• Rising expense of television advertising and
  increased audience fragmentation
  
• Unparalleled targeting of messages to desired
  prospects
  
• Increased emphasis on measurable advertising
  results
  
• Consumers are responsive

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I hate rules!
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10 guidelines for an effective DM

• Is there a unique and interesting idea?
• Does the idea meet the creative brief? Does it
  match reality?
  
• How quickly is the benefit perceived?
• Is the benefit in the headline supported by the
  visual?
  
• Will the visual execution stop the reader and
  make her read on?
  

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10 guidelines for an effective DM

• Is the headline stated in an imaginative and
  memorable way?
  
• Is the message relevant to the reader?
• Is the copy written so that other people want to
  read it and respond?
  
• Does the reader know how to respond?
• Is the mailing consistent with the brands
  qualities / image?
  

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The Role of Database
Target best prospects for offering

• Databases
• allow
• a company to

Offer varied messages
Create long-term relationships with customers
Enhance productivity
Calculate the lifetime value of a prospect
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Lifetime Value Analysis

• Customer Lifetime Value
• The net present value (NPV) of the profit
• that a company stands to realize on the
• average new customer during a given
• number of years

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Lifetime Value Anaysis
Customer Lifetime Value
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Lifetime Value Analysis

• Retention Rate
• Referral Rate
• Sales Volume
• Direct Costs
• Marketing Communication Costs

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Two types of Mailing Lists
House lists
External lists

• Based on a companys own internal list of present
  or prospective customers
  
• Methods used to obtain database information
• In-pack promotion
• Registration programs
• Rebate programs
• Telemarketing

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Two types of Mailing Lists
House lists
External lists

• House lists of other companies
• Compiled lists lists compiled by a company for
  its own purposes or lists purchased from another
  company that specializes in list compilation
  
• Compiled lists are not as desirable because no
  information about the willingness of a person to
  purchase by mail

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Catalog Marketing
Retail Catalog
Full-line merchandise
Consumer specialty
Industrial specialty
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Why Catalog?

• Saves time
• Appeals to consumers who are fearful of shopping
  due to concerns about crime
  
• Leisurely decisions
• Toll-Free numbers
• Comparable quality and prices
• Guarantees are attractive

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Where is catalog marketing at?

• Catalog marketing has reached the mature
  life-cycle stage
  
• Novelty of catalog scanning worn off
• Costs of catalog making increased
• Third-class postal rate and paper price increased

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Outbound and Incoming Telemarketing

• The dominant form of direct marketing

Outbound
Incoming
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Outbound Telemarketing

• Opening new accounts
• Qualifying advertising leads
• Servicing existing business, including reorders
  and customer service

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Outbound and Incoming Telemarketing

• The dominant form of direct marketing

Outbound
Incoming
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Outbound and Incoming Telemarketing
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Toll-Free (800) Numbers

• Request product or service information
• Place direct orders
• Express complaints or grievances
• Request coupons or other sales-promotion
  materials
  
• Inquire about the nearest dealers or outlets

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Toll-Free (800) Numbers

• Prominent display
• of 800-Number

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Dial-It (900 Numbers)

• Update customers about services that are subject
  to frequent changes
  
• Sports information
• Weather updates
• Travel information
• However, dark side of 900-number
• sleazy sex operations, contest scams

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The Importance of perseverance

• A Classic DR case

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Before losing a customer for life!

• American Express Case
• Problems of acceptance
• with merchants
• Warm Cold audience
• Telemarketing
• One-on-one
• Pride goes before a fall
• 7 postal response
• 35 telephonic response

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CRM

• So, whats new?

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What we need is an education in the obvious, not
an explanation of the obscure.

• - Oliver Wendell Holmes

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A new breed of customer

• More discerning
• Less Loyal
• Less inclined to go steady than before
• More difficult to reach
• Harder to retain

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The Challenge

• To attract new and profitable customers
• To form tighter ties with existing ones
• To optimize the relationship over their lifetime

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CRM

• Not a software program
• Customized one-to-one customer experience
• Not based on historical purchasing power
• Potential for long term loyalty to the brand
• Not database marketing
• Efficient use of technology intelligent data
  management
  
• Segmented and customized communication

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Saab 9-5 Direct Mail Questionnaire

• Direct mail questionnaire

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Saab 9-5 Direct Mail Response to Questionnaire

• Response to direct mail questionnaire

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Outbound Telemarketing

• 8 Factors to consider
• Importance of face-to-face contact
• Geography
• Economics
• Customer decision criteria
• Number of decision makers
• Nature of the purchase
• Status of the decision maker
• Evaluation of the specific selling tasks

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Direct-Response Advertising
Direct response advertising