For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Direct Marketing: The Dialogue Builder

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin  What are the strengths of direct marketing?  What is the biggest strength of direct mail? The biggest limitation?  What are the strengths and weaknesses of telemarketing?  How can direct marketing efforts be evaluated?  What are the major issues and concerns related to direct marketing? Chapter Outline

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Advertisin g and Sales Promotion Chapter Perspective A big advantage of Direct Marketing over Advertising and Sales Promotion: Direct Marketing Very Interactive

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Opening Case: Orange Glo

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin The use of a direct marketing program featuring: On-air demonstrations and direct selling on Home Shopping Network 30-minute infomercials promoting and selling its brands featuring Billy Mays as spokesperson The use of a direct marketing program featuring: On-air demonstrations and direct selling on Home Shopping Network 30-minute infomercials promoting and selling its brands featuring Billy Mays as spokesperson The use of a direct marketing program featuring: On-air demonstrations and direct selling on Home Shopping Network 30-minute infomercials promoting and selling its brands featuring Billy Mays as spokesperson The use of a direct marketing program featuring: On-air demonstrations and direct selling on Home Shopping Network 30-minute infomercials promoting and selling its brands featuring Billy Mays as spokesperson Expanding Orange Glo’s distribution and profit One of the fastest-growing private companies $250 million in annual sales One of the fastest-growing private companies $250 million in annual sales Opening Case: Orange Glo Challenge: Answer: Results: Expanding Orange Glo’s distribution and profit

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Direct Marketing Direct marketing: An interactive, database- driven messaging system that uses a range of media to motivate a response from customers and prospects

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Direct Marketing 2/3 of Americans Respond Every Year 4 Primary Media: Mail, Telephone, , Infomercials Also Known As Direct Response: Because It Is Two-way in Nature 4 Primary Media: Mail, Telephone, , Infomercials 2/3 of Americans Respond Every Year Direct Marketing

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Figure

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Interactive Measurable Fast and Flexible Measurable Interactive Direct Marketing’s Strengths Direct Marketing Strengths

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin What Are Direct Marketing’s Strategies? Front end strategies Delivering the message Back end strategies Handling consumer responses and delivering the product

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin The Offer Targeted Databases The Response Fulfillment Customer Service Privacy Protection The Offer Targeted Databases Fulfillment Customer Service Front & Back End Components Front End Components Back End Components The Response

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin The Offer The offer: Everything, both tangible and intangible, promised by a company in exchange for money or some other desired behavior

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin An Offer From an Exclusive Resort + +

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin IMC In Action: Flowers

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Promoting and delivering flowers nationwide The use of an IMC program featuring: TV, radio, and direct mail messages delivering the offer FLOWERS; web site, handling responses 2,500 local florists fulfilling orders The use of an IMC program featuring: TV, radio, and direct mail messages delivering the offer FLOWERS; web site, handling responses 2,500 local florists fulfilling orders The use of an IMC program featuring: TV, radio, and direct mail messages delivering the offer FLOWERS; web site, handling responses 2,500 local florists fulfilling orders The use of an IMC program featuring: TV, radio, and direct mail messages delivering the offer FLOWERS; web site, handling responses 2,500 local florists fulfilling orders Promoting and delivering flowers nationwide Named “top gift site on the web” IMC In Action: Flowers Challenge: Answer: Results:

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Direct Mail Direct mail: One form of direct response advertising that uses mail rather than other media to deliver a brand offer

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin An Example Of a Set Of Materials In a Mail Package + +

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Vs. Strengths Addressability Can receive more attention than advertising Not as much clutter as advertising Message can be tailored to any size or shape Addressability Can receive more attention than advertising Not as much clutter as advertising Message can be tailored to any size or shape Strengths Addressability Can receive more attention than advertising Not as much clutter as advertising Message can be tailored to any size or shape Addressability Can receive more attention than advertising Not as much clutter as advertising Message can be tailored to any size or shape Strengths And Limitations Of Direct Mail Limitations Postage can be costly Some offers can be costly to produce Complex offers can require long lead times Postage can be costly Some offers can be costly to produce Complex offers can require long lead times

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Telemarketing Telemarketing: The practice of using the telephone to deliver a brand message designed to create a sale or sales lead Controversial… … but Big Business 43 Billion

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Figure 18-2: A Range of Automated Phone System Options

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Vs. Strengths And Limitations Of Telemarketing Strengths Personal Addressability Interactive Personal Addressability Interactive Strengths Personal Addressability Interactive Personal Addressability Interactive Limitations Human callers can be costly Intrusive (unwanted calls) Human callers can be costly Intrusive (unwanted calls)

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Media Mix Used Creative Approach List Types Offer Values Frequency of Exposure Media Mix Used Creative Approach Offer Values List Types How Can Direct Marketing Efforts Be Evaluated? Testing

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Ultimate Test: Effectiveness Response Rate Number of responses Number of offers mailed Number of responses Number of offers mailed= Cost Per Sale Total cost of mailing Number of sales made Total cost of mailing Number of sales made= 5 / 100 = 20 $1,000 / 5 = $200

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Insight: Tracking Customer Costs/Profits Direct marketers are very proficient tracking their costs and profits because the medium is the easiest to measure in terms of cost per sale. One rule of thumb: in most direct-marketing programs, a customer isn’t profitable until the third time he or she buys.

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Think About It Campaign If you had to design an campaign for your organization, how would you make it appealing and not just annoying spam? Campaign If you had to design an campaign for your organization, how would you make it appealing and not just annoying spam?

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Tales From the Real World The public often wonders: “how did they get my name (or address, phone number, or account)?” In the real world, it’s fairly easy to acquire a database list of many different types of individuals. In fact, it’s amazing how specific some of the lists can be. Some examples of lists offered for sale by a list broker in their catalog: “accupuncturists,” “golfers,” and “nuclear physicists.”

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Final Note: The increasing amount of clutter and privacy concerns suggests that the Direct Marketing winners will be those organizations who: Are creative in making their appeals stand out Are sensitive to consumer privacy concerns