1.  Copyright by Debra L. Zahay 2002 Direct Marketing and the Web Dr. Zahay Thanks to Bob Stone’s and Jim Kobs books

2.  Copyright by Debra L. Zahay 2002 Direct Marketers Flourish on Web Land’s end third quarter revenue up 4% third quarter to third quarter, 376.1 million from 362.3 Jan Brandt, AOL’s marketing wizard, named Direct Marketer of the year, helped bring AOL to more than 30 million members John Costello, Sears vet, is named global marketing officer for Yahoo, Inc. 55 % of direct marketers engage in E- commerce are making profit, half of remaining expect to reach profitability in ‘02

3.  Copyright by Debra L. Zahay 2002 BUT, it has to be more than DM BMW found that prospects who interact with the company on the web prior to purchase areas much as three times as likely to become buyers than prospects from other sources –Direct marketing can reach the prospect –Web site can help deliver the experience –Objective of web site can be to collect information, deliver experience

4.  Copyright by Debra L. Zahay 2002 Communication Mass comm. Direct Comm. Interactive Comm. One way Two way Conversation

5.  Copyright by Debra L. Zahay 2002 Direct Response Mechanisms Attract. Acquire Retain One way Two way Conversation

6.  Copyright by Debra L. Zahay 2002 Communication Trend Direct vs. Interactive An organized and planned system of contacts Using a variety of media Seeking to produce a lead or an order Developing and maintaining a database Measurable in cost and results Expandable with confidence (DMA) 1) the ability to address an individual 2) the ability to gather and remember a response of an individual 3) the ability to address that individual once more in a way that takes into account his or her unique response (Marketing=conversation) »Deighton, 1996

7.  Copyright by Debra L. Zahay 2002 What are the elements of direct marketing?

8.  Copyright by Debra L. Zahay 2002 The Offer Should be a “call to action” Should have a deadline, expiration time Should require something from you and give you something in return Types of calls to action –Give us your information, get additional information from us (“free gift” offers outpull other offers) –Give us some money by a certain time and we will send you an extra product –Give us your time and we will give you some useful information (“stickiness”)

9.  Copyright by Debra L. Zahay 2002 The List All customers are not created equal, 80 percent of orders come from 20 percent of customers Maximizing profits comes from the lists you use Internet marketers have the ability to identify their customers and create lists Enhancing lists with demographic or other information improves their effectiveness Follow ups within 30 days produce 40-50% the first response “House” lists outperform purchase lists

10.  Copyright by Debra L. Zahay 2002 The list is now a database Predict trends: beer and Pampers Discover unknown patterns: data mining Market 1 to 1: Rogers and Peppers Personalization: Marketing communications tailored to the customer (content personalization or personalized offers) Customization: Product offerings tailored to the customer

11.  Copyright by Debra L. Zahay 2002 Media Used Multiple media were always available (Oldsmobile ads) –mail, mail, mail –mail, call, mail –mail, email, call Can drive responses to destination web site, “landing page” (HP, Other software companies) Tracking becomes more effective on the web –Who opened the email –Who purchased –How much –Measure versus “control” page

12.  Copyright by Debra L. Zahay 2002 Creative execution “Long” copy sells Standard DM piece is long and has multiple parts, longer people read, more likely to buy Web site ideally situated to the “long copy” model Web is also visual, interactive

13.  Copyright by Debra L. Zahay 2002 Service and support Most important order you get is the second order--two time buyer twice as likely to buy as one time buyer Lifetime value calculations are critical –RFM: Recency, Frequency, Monetary Value –CLV: Sales over life of customer minus costs over life of customer –We can “score” customers and target those most likely to purchase again We can test and test in DM and now have the interactivity of the web to speed up testing

14.  Copyright by Debra L. Zahay 2002 Success Depends Upon--which is more important? List Offer Copy

15.  Copyright by Debra L. Zahay 2002 Implications for web marketers Web is wonderful way to collect customer information, it is access to an “in house” list Companies can use that information to target the offer –Personalized webpages, my netscape –Customized product offerings, ala Amazon –Permission email marketing campaigns –Privacy issues are associated with this responsibility Web is ideal “long copy” format, and can provide something else, interaction

16.  Copyright by Debra L. Zahay 2002 General Stages in E-Business Initiatives Supplying company and product information (brochureware) Providing customer support and enabling interactions, cost reduction Supporting electronic transactions Personalizing interactions with customers, customizing products (Amazon) Fostering communities, maybe

17.  Copyright by Debra L. Zahay 2002 Hierarchy of Customer-Focused Web Strategies Customizing products Personalizing interactions with customers, Fostering communities Supporting electronic transactions Providing customer support and enabling interactions, cost reduction Supplying company and product information Information Interaction Transaction Personalization Customization Fig. 5 in Roberts

18.  Copyright by Debra L. Zahay 2002 www.the-dma.org