1. Database and Direct Response Advertising MKTG 340 Maureen O’Connor

2. Classic advertising/marketing adage It’s cheaper to retain a customer than to find a new one

3. Database technology gives marketers the opportunity to… Meet several key objectives -- better recognize their customers a. identify good customers through purchase patterns b. better profile good customers c. identify new target segments

4. Also… Develop better relationships with customers to build loyalty Better predict future purchases Stave off competition Increase the amount of purchases Build cross selling opportunities Add differentiation to a maturing or parity brand

5. Database Marketing relies on… Effective use of customer data Using transactional history to cultivate the marketing relationship Examples of key info for a database – Contact info – Purchase history – Record of any contacts – Preferences and survey info – Response to any promo offers – Demographics or psychographic info – Customer coding, i.e. Lifetime Value Analysis (what will this consumer contribute to sales over their lifetime)

6. How can marketers use database information for better customer relationships? Develop specific customer profiles for tailored communications Recognize certain events, i.e. birthdays or special promotions Tailor communications based on past purchase history Trawl for customers who are ready to re-purchase (a customer who purchased a car online may be ready to buy new in five years) Identify Lifetime Value Segments – Who are my best customers and how can I treat them well? – How can I elevate good customers into better customers? (Benefit structures)

7. Also… Develop loyalty programs, i.e. frequent flier miles Develop opt in or permission marketing programs to give the customer incentive to stay in contact with the company Develop direct response marketing campaigns based on specific customer profiles and segments

8. What are Direct Response marketing Programs? Any marketing initiative that bypasses the intermediary or the channel to sell directly to the consumer. Includes – Direct mail (easily quantifiable) – Direct response broadcast or print,.i.e. QVC shopping channel, call now to order offers, etc. – Infomercials – Search engine or display ads targeted to prospects – Email programs with links to purchase