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 Once the ugly stepchild of marketing, DM now garners 25% of US marketer’s budgets surpassing newspapers and broadcast TV  Direct marketing started.

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Presentation on theme: " Once the ugly stepchild of marketing, DM now garners 25% of US marketer’s budgets surpassing newspapers and broadcast TV  Direct marketing started."— Presentation transcript:


2  Once the ugly stepchild of marketing, DM now garners 25% of US marketer’s budgets surpassing newspapers and broadcast TV  Direct marketing started fairly simply with early American colonists ordering seeds and other products not available in the Colonies.  Rural America has always favored direct marketing to enable access to everything from prefab homes and barns to clothing.

3  90% of marketers, agencies and other providers use non-catalog direct mail and 46% state it is their primary promotional channel › Responses primarily from the Internet(93.7%), phone (79.5%), internal sales force (70.8%)

4  B2C Businesses selected the following results for best ROI for Direct Response techniques › Direct mail 34% › Email 25%  B2C owners showed optimism with 33 1/3% increasing marketing budgets vs. 14% decreasing  Contact/Retention for B2C highest with Direct Mail (37%), email (31%), telemarketing (7%) and social media (6%)

5  B2B businesses found email (44%) to be the strongest ROI for customer retention  29% B2B owners increased marketing budgets while 16% decreased budgets  Direct Mail is expected to fall 39% in the next 5 years as email begins to eclipse direct mail (to $29.8b)  Local use of email really anticipated to grow because cheaper and growing effectiveness

6  Direct Marketing today is at the center of a communications revolution › The Internet is now the essential tool and an essential part of everyday living › Marketer’s now demand their funds are used efficiently to provide customer centric communications › ROI is demanded

7  Recent growth in non traditional businesses › Credit card companies, banks, investment firms, insurance companies › Telecom, cable, utilities now heavily involved › Airlines, automobile manufacturers and the travel industry are all users › Very few industries are not touched by direct marketing

8 So what is direct marketing exactly?  The interactive use of advertising media to stimulate an immediate behavior modification in such a way that this behavior can be tracked, recorded, analyzed, and stored on a database for future use and retrieval.

9  Interactive – One on one communications between the marketer and prospective customers/consumers. Two way interactions are the building block of DM  Use of Advertising Media › Combination of various media complements the overall effectiveness of the marketing efforts  Track, Record, and Analyze › Measurability is the hallmark of DM. Marketers now demand it!  Stored in a Database for Future Use and Retrieval

10  Seeks to generate a measurable response to an offer › A call back, an order, website research  The organization wants to generate leads and encourage relationship building  Elements of Promotion › Copy 15%List/Media 40% › Timing 10%Offer 20% › Layout/format 15%

11  Media/List › One of the keys to producing a response  All a matter of exposure  Segmenting and targeting vital  Getting together the buyers/sellers  Media mix vital – TV, radio, Internet, newspapers Geography, demos, psychographics › Offers  Relevance to TM vital; motivation important  Expenses lower than advertising so offers and incentives can be more generous

12 › Creativity  Copy - compel me to respond  Benefits, description, support copy and facilitators or sweeteners  Layout – enhance eye flow patterns, easy to read and process, highlight significant items and tell the story

13  Do you attempt to capture a certain % of the market share or a % of your segment?  Many direct marketing products experience different product life cycles › Changes media and offer strategies  New Objectives › Building and maintaining customer loyalty › Costs 5-10x more to generate a new customer than retain › 90% of profits from 10% of customers – Olgilvy › Reducing customer defections by 5% could increase profits 25-85%

14  One to One – › Direct interaction with the individual customer › ‘Mass’ Customized treatment of the consumer › Difference with Direct Marketing is how solutions are approached › Enables information collection and insight › Enables creation of products for the consumer  Direct Marketing › Traditionally behaviorists › Results oriented (the sooner the better) › If you buy outdoor equipment, sell the lists, bombarded with catalogs!

15  Phase One – moving away from mass marketing messages … one commercial for everyone watching a particular program (TM)  Identifying customer segments and sending messages per segments  Integrating DM into an overall communications program › First understand insights and consumer motivations › Matching audiences, media and technologies avail › Generate effective messages per audience

16  Recent results show that email metrics remain strong › Click rates (5.2%) declined slightly over last quarter but remain in line with same quarter last year › Average volume per client increased by 16.2% from Q1 › Unique click conversion rates increased 14.6% over Q1 2011.  $163B spent in 2011 on DM; 168.5B forecast for 2012  Captures 53% of advertising expenditures  $1 investment in DM yields $11.63

17  Postal Mail Advertising (p-mail) – any advertising matter delivered by the USPS to the person to be influenced › Catalogs, letters, postcards, programs, DVDs, order blanks, menus, etc.  B2B heavy users of p-mail › Rising cost of TV (and less for $) › Unparalleled targeting of messages › Measureable results

18  1. Zygna (poker) on track to spend $200M in advertising and marketing mostly on FB  2. – Fab’s FB page has 656K likes  3. EA(Electronic Arts) $2.75M on just one title  4. Proctor and Gamble believes it can generate $500M in sales from FB and other social media  5. AT&T – developing apps to allow bill payment  6. American Express FB app “Link, Like, Love” link am exp cards to FB account and receive for Dunkin Donuts, Virgin Atlantic, Whole Foods  7. Experian  8. Groupon  9. Walmart  10. Microsoft

19  Targetability – precisely targeting a defined group of people. Example, Saab selected just 200,000 consumers to receive mailings on the Saab 9-5. These included 65,000 current Saab owners and 135,000 prospects who satisfied income and car ownership requirements. (Of course, they are out of business now!)  Measurability – how many mailings went out, how many responses; one downside is that sending a message to a household does not guarantee the target will receive it

20  Accountability – easy to assess outcomes for brand manager  Flexibility – quick and easy to change with environmental factors  Efficiency – targeting saves money over national ads

21  More than 10 billion distributed annually in US  More than 2/3 recipients visit company’s website  Sales to catalog recipients more than 150 times greater than those not receiving the catalog  Marketers look at them as an effective and efficient way to reach prime prospects

22  Saves time – no parking spot hunting, travel, in-store crowds  Convenience – 24/7 browsing, decision making and ordering  No concerns about crime in certain areas  Liberal returns, online purchases accessible, 800 numbers enhance ease of shopping experience  Quality merchandise  Guarantees

23  Videotapes, DvDs CD-Roms › Capture key visuals and audio information about the brand and distributing this information to business consumers and end users to project on computers or tv › Limited research on this form of marketing  Yet often the result of requests to the company enhancing targeting and effectiveness  Some evidence less likely to be thrown away vs p- mail › Expensive unless can lead customers to online downloads

24  Access to database information of addresses, email contacts and phone information essential to the success of direct marketing campaigns. › Additional pertinent demographic information necessary to best target  Comparison to mass media advertising › “Broadcast media send communications; addressable media send and receive.” Shimp 2010.

25  Allows firm to identify the best prospects for products and services  Allows varied messages to different groups of customers  Enables the creation of long term relationships with customers  Enhances advertising productivity  Enables calculation of lifetime value of customers

26  Sizes range into the millions of addresses with dozens of input variables for each entrant  Inexpensive software allows the segmenting of entrants based upon variables of interest › Relations among variables to enable co-op marketing › Depth of understanding in buyer wants, purchases, uses

27  Credit card companies analyze your purchases › You disproportionately spend on exotic vacation purchases  A promotion designed around winning an exotic vacation may very well generate a response from you › Furniture company mining its database identifies that families with two children do not buy furniture within two years of purchasing a car, they acquire automobile purchase lists to better refine their promotions

28  What actions will achieve efficient, effective and expected outcomes?  Strategy and planning give organizations the framework for choosing the right tools and techniques to maximize the variety available in DM  Goal of Planning to stay on track, stay up to date with emerging technologies and optimize resources

29  First, Where should we focus the greatest effort and why? › How does the company generate revenue? › Focus on where generate the greatest reward  What do we bring to the table? › What are our core competencies and distinct capabilities?  Do our core capabilities suit our position? › Can the firm sustain this position over time? Avoid developing competencies that do not garner a competitive advantage

30  Designed to draw in investors and support financing needs  Provides information to the investors that are the “customers” for the plan › Describe the key concepts of the business › Establish that there is a market for the products and services the company sells › Outline the organizational structure › Include financial projections that show the company’s expected sales and growth over a 3 year period

31  Introduction  Executive Summary  Mission and Vision Statement  Market Analysis  Customer Analysis  Business Description  Organization and Management  Integrated Marketing and Sales Plan  Funding Request  Financial Projections  Appendices

32  Introduction › Short description (no more than a page) as to why the plan is being written, its audience, business objectives and purpose as well as business concept  Executive Summary › Clear picture of what the business is about including the mission statement, the start date of the business, founders’ names and functions, # of employees, location of headquarters and any branch offices, description/size of facilities, the products and services category, current investors (bank names), growth summary and plan, financial highlights, market potential and summary of management plans

33  Mission and Vision Statements › Central purpose of the business and its planned activities, major objectives, key strategies and primary goals  Market Analysis › SWOT › Description of competitive environment, › Identification of prospects (how was TM identified?) › Market share sought and held

34  Customer Analysis › Who buys the product/service? › Potential target growth in the marketplace › Are their multiple buyers, decision makers and buying authorities involved?  Business Description › What business are you in and what are the trends in the industry? › Description of products and services offered and competitive advantages of these goods (trademarks, patents, brand names)  Accountability – easy to assess outcomes for brand manager  Flexibility – quick and easy to change with environmental factors  Efficiency – targeting saves money over national ads

35  Organization and Management › Organizational structure › Staffing needs › Job descriptions of top management › Triggers for additional staffing requirements › Include an organizational chart › Details of compensation › Incentives › Benefit plans › Bios of management and BOD › Founder information

36  Integrated Marketing and Sales Plan › Detailed summary of the marketing plan  Methods of selling, distribution plan, mix for advertising(and rationale), DM, Internet, sales promotion, PR and events  Discuss efforts in relation to competitors  Credit and terms for receivables, credit approval process, pricing guidelines, markups, competitive response analysis, budgets and timing.  Discussion of revisions if growth is not met  Funding Request › Details of the request and the potential sources, terms, ROI

37  Financial Projections › Detailed accounting of how much money needed, when it is needed and when investors can expect a ROI  Balance and Income Statements  Cash Flow Projections  Cash In  Cash Out  Timing of each  Appendices › Info relating to text of the business plan › Research plans, tables, detailed market or sales projections, analyses, exhibits

38  Brings together an organization’s management, employees, stakeholders, and customers by communicating a common understanding of where the organization is going, how employees are involved in this common purpose, and how to identify benchmarks for progress and success  Are we a customer driven business? › How do we hear the voice of the customer?

39  Introduction  Executive Summary – summarizes key elements of the plan  Goals and Objectives – highlights achievements for next 1-3 yrs  Situation Analysis – competitive, environmental and market analysis  SWOT Analysis – key strengths and weaknesses, market analysis  Mission Statement – what does business do and hope to do  Vision Statement – what will co look like in 3 years  Business Values – principles that govern the company  Key Strategies – identifies what success looks like, build strengths or resolve weaknesses?  Action Plans  Financial Plans – goals and objectives  Performance Measures - benchmarks

40  Seeking to reach a symmetry and symbiotic relationship between direct marketing tools and the Internet and newer technologies  Similarly developed to the Business Plan and the Strategic Plan › It just is a narrower scope in vision › It is a promotions plan reflecting only the visions and actions for direct marketing

41  Intro › Plan’s purpose › Intended Audience  Executive Summary › Summary of plan’s contents › Objectives, marketing strategies, key target groups and mkt segments › Elements of tactical plan and budget  Situation Analysis › Macroenvironment of marketplace  Demo trends, economic indicators, political and social issues  Competitive situation  Target group analysis  Distribution channels  Product situation  Research

42  Opportunity and Issue Analysis › Elements of SWOT germane to the marketing plan  Goals and Objectives › Marketing and financial objectives  Specific and measureable  Benchmarks (click throughs, creation of customers)  The Marketing Strategy › Positioning discussions › Aligning needs and wants of customers to offerings › Clear understanding of the prospect  Tactics › Details of each marketing event and action planned  Media and mailing list planning's

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