INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Chapter 4 The Direct and Database...

INTERNET MARKETING:INTEGRATING ONLINE AND OFFLINE STRATEGIES

Chapter 4

The Direct and Database Foundations of Internet Marketing

DELL PREMIER PAGE

Chapter 2Update!

INTEGRATED MAIL/WEB?

NON-PROFITS GOOD AT DIRECT RESPONSE

EMAIL WITH DR OBJECTIVE

EMAIL TO TRAFFIC STORES, WEBSITE

DIRECT ACTION, YES – PURCHASE???

In What Ways

Is The Internet A

Direct-Response Medium/

Channel?

And Why Does It Matter?

FOUR I’s OF INTERNET MARKETINGARE THE ANSWER

P&G—MASS MARKET PRODUCTS - DIRECT-RESPONSE EXPERTISE

HOME PAGE AND MICROSITE

BASIC DIRECT-RESPONSE STRATEGIES

AcquisitionAcquisition

ConversionConversion

RetentionRetention

CRITICAL STRATEGY ELEMENTSFROM DIRECT-RESPONSE PERSPECTIVE

The (Email) List

The Media

The Creative Execution

The Service & SupportThe Offer

DIRECT-RESPONSE OBJECTIVES

Direct-Response Objectives are ACTION Objectives:

• To Remain on the Site Longer (“Site Stickiness”)

Well Designed Site With Much Relevant Content

• To Request Additional Information (Sales Lead)

• To Make a Sale (E-Commerce)

SITE STICKINESS = ATTENTION

TOP POSTS BY ATTENTION (CLICKS?)

SITES RANKED BY ATTENTION

WEB 2.0 = ENGAGEMENT

http://wiredset.com/root/archives/008589.html

TOP ENGAGEMENT SITES

LANDING PAGE CAPTURES DATA

Figure 4-4a

PRODUCT PAGE SELLS

Figure 4-4b

THE REMAINING STRATEGY ELEMENTS

• E-Mail List for Customer Acquisition and Retention

• The Media ANY MEDIUM Can Be Direct Response With Action

Objectives

• Creative Execution Historically Less Important in Direct Response

Rich Media Has Increased Role on Internet

• Customer Service and Support

THE FRONT vs. THE BACK END

THE FRONT ENDAll Pre-Sale Activities• Marketing and Sales

THE BACK ENDAll After-Sale Activities• Includes Order Processing, Fulfillment, Service, Support

WHAT IS CLV –AND WHY IS IT SO IMPORTANT?

Customer Lifetime Value

Is The Net Present Value

Of The Gross Margin Minus Cost of Servicing

An Individual Or A Cohort Of Customers.

Reasons For Importance:• The Best Metric For Judging The Success Of

Customer Acquisition & Retention Programs• The Most Powerful Segmentation Criterion

THE CONCEPTUAL FRAMEWORK

A SIMPLE ONLINE TOOL

http://hbsp.harvard.edu/multimedia/flashtools/cltv/index.html

BASELINE CLV CALCULATION

Table 4-1

SUMMARY OF FIRST YEAR CLV

Total Sales $5,280,000

Less: Total Costs $5,148,800

Equals Gross Profit $ 131,200

Times: Discount Rate 1.0

NPV of First Year Revenue $ 131,200

CLV of Customer in Year 1 $ 26.24

INCREASE FROM TARGETED MARKETING PROGRAMS

Table 4-2

EFFECT OF TARGETED PROGRAMS ON CLV

Table 4-3

THE DIRECT RESPONSE TEST

Email Newsletter

Content Version B

Email Newsletter

Content Version A

A/B Split is One Of Many Types of Tests

THE TESTING PROCESS

http://www.sitespect.com/non-intrusive-a-b-testing.shtml

How is Testing

Different From Marketing Research?

TESTING vs. MARKETING RESEARCH

• Testing Tells the Marketer WHAT

WORKS.

• Marketing Research Explains WHY IT

WORKS.

RECOMMENDATION

Behavioral Analysis FIRST

Faster, Cheaper, Actionable

ONLY THEN Marketing Research

IF You Need to Know “Why”

RECOMMENDATION FROM SHERPA

http://www.marketingexperiments.com/images/multifiles/articulate/webclinic-06-25-08/player.html?=meblog2

Most Viewers Guessed Wrong!

THE DATABASE IMPERATIVE

DATABASE/DATA WAREHOUSE

Marketing Program Data

Marketing

Support Data

Business Data

External Data

USES OF CUSTOMER DATABASE

BENEFITS OF CUSTOMER DATABASE

Harrah’s Casinos Increased

Revenues and Profits

By Building and Using (Mining)

a Customer Database

WHAT IS “DATA MINING?”

A Set of Statistical RoutinesThat Permit Pattern Detection

In Large Data Sets

HIERARCHY OF INTERACTIVE STRATEGIES

SUMMARY

• Interactivity of Internet = Direct-Response Medium Learning To Use In Branding Also (Chapter 7)

• Use For Customer Acquisition,Conversion,Retention

• Generate Sales, Leads, Site Stickiness

• Judge Success By Customer Lifetime Value

• To Increase Customer Lifetime Value Targeted, Information-Driven Marketing Is Essential Data Capture Through Transactions and Customer Contact Modeling, Data Mining

• Interactive Marketing Strategies Should Increase Customer Focus and Marketing Effectiveness

• They May Decrease In Cost As Targeting And Personalization Improve

INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Chapter 4 The Direct and Database...

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