Direct Response Marketing Chapter 11

The Importance of Databases in IMC Planning Can be used for identifying and building relationships with customers through: Data-driven Programs Data-driven communications Direct response offers

Types of Databases Operational database Marketing database Customer transactions Follows accounting rules Marketing database Current customer information Former customer information Prospect information

F I G U R E 1 1 . 1 4 Mail Catalogs Telemarketing Mass media Methods of Direct Response Marketing Mail Catalogs Telemarketing Mass media Alternative media Internet E-mail

F I G U R E 1 1 . 1 0 Methods of Direct Marketing

What’s Happening? Hey Denton this company is really cool. The only have 2 products; One is green product and the other is super innovative. Watch the video on there as well. http://www.origaudio.com/ http://www.fastcompany.com/magazine/144/remember-when-bad-products-happen-to-big-companies.html?partner=homepage_newsletter

Direct Marketing Direct connections with carefully targeted individual consumers Message must appeal to target group Major problem is large volume of direct mail received by both consumers and businesses. Intended to cultivate lasting customer relationships Immediate and interactive in many cases A strong database allows precise targeting of small groups

Direct Marketing, con’t Can be used as a supplement to existing channels of communication or stand-alone Fastest growing form of marketing

Database Driven Marketing Programs Permission marketing Frequency/loyalty programs Customer relationship management

Steps in Developing a Permissions Marketing Program Obtain permission from the customer. Offer the consumer a curriculum over time. Reinforce the incentive to continue the relationship. Increase the level of permission. Leverage the permission to benefit both parties. Source: Seth Godin, “Permission Marketing: The Way to Make Advertising Work Again, Direct Marketing, (May 1999), Vol. 62, No. 1, pp. 41-43.

F I G U R E 1 1 . 9 Maintain sales, margins, or profits. Frequency Program Objectives Maintain sales, margins, or profits. Increase loyalty of existing customers. Induce cross-selling to existing customers. Differentiate a parity brand. Preempt the entry of a new brand. Preempt or match a competitor’s frequency program. Source: Grahame R. Dowling and Mark Uncles, “Do Customer Loyalty Programs Really Work?” Sloan Management Review, (Summer 1997), Vol. 38, No. 4, pp. 71-82.

Reasons Retailers Develop Loyalty Programs Reason for program Indication % Promotes consumer loyalty 90% Increases “best shopper” sales 65% Gain consumer information 65% Maintain market share 42% Enhance image 29% Respond to competition 10% Source: A.C. Nielson, Santella & Associate

F I G U R E 1 1 . 7 Reasons Consumers Opt into an E-mail Frequency Program

Customer Relationship Management Foundations: Customer Driven Database Technology Interactivity through websites, call centers, and other means of contacting customers Mass customization technology

Customer Relationship Management Two measures of CRM include Lifetime value Share of the customer CRM can be successful if: Firms differentiate customers in terms of their needs and their value to the selling company Focus on relationships, not sales Be customer-driven, not technology-driven Customize some aspects of the goods or services being offered to the customer