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Chapter 10
Direct Marketing
10-1
1. Identify purposes served by direct marketing.
2. Explain the popularity of direct marketing.
3. Distinguish a mailing list from a marketing database, and review the applications of each.
4. Describe the media used by direct marketers in delivering messages to consumers.
10-2
Direct Marketing Today
• Direct marketing has its roots in catalog companies such as L.L.Bean.
• Many types of organizations are increasing their expenditures on direct marketing. These expenditures serve three primary purposes:
• Closing sales with customers
• Identifying prospects for future contacts
• Offering information and incentives to foster brand loyalty
10-3
Growing Popularity
• The growing popularity of direct marketing can be attributed to several factors.
• Convenience—credit cards, 800 numbers, and the Internet
• Computer power—building and mining large customer information files
• Tracking—lends itself to current emphasis on measurable outcomes
10-4
Database Marketing
• A mailing list is a file of names and addresses of current or potential customers, such as lists that might be generated by a credit card company or a catalog retailer.
• Internal lists—valuable for creating relationships with current customers
• External lists—useful in generating new customers
• List enhancement—adding demographic, geodemographic, psychographic, or behavioral data
10-5
Database Marketing, Continued
• A marketing database is a natural extension of the internal list, but it also includes information about individual customers and their specific preferences and purchasing patterns.
• A marketing database allows organizations to identify and focus their efforts on their best customers using a recency, frequency, and monetary (RFM) analysis.
• Recognizing and reinforcing preferred customers helps build loyalty:
• Follow-up letters, discounts, coupons
• Frequency-marketing programs—database, benefit package, communications strategy
• Cross-selling opportunities also emerge once a database is in place.
• One can gain keener information about the motivations of current best customers, and insights usually emerge about how to attract new customers.
• However, companies must be sensitive to consumer’s rights and wishes to protect their privacy.
10-6
Media Used in Direct Marketing
• Direct-marketing programs emanate from mailing lists and databases, but there is still a need to deliver a message to the customer.
• Direct mail, telemarketing, and email are the most common means used in executing direct marketing programs. Email is most successful when it avoids spam and uses opt-in lists.
• Because the advertising done as part of direct-marketing programs typically requests an immediate response from the customer, it is known as direct-response advertising.
• Conventional media such as newspapers, magazines, and radio also can be used to request a direct response by offering an 800 number or a Web address to facilitate customer contact.
• Television makes use of the infomercial for direct-response advertising. Successful infomercials require:• a same-day response• frequent closes• testimonials (celebrities do no harm, but are not essential)
10-7