Direct & Telemarketing
PROF: SAMEER KULKARNI ©
What is Direct Marketing?
An interactive system of marketing which uses one or more advertising media to effect a measurable response at any location, forming a basis for creating and further developing an ongoing relationship between an organisation and its customers. Direct Marketing is both marketing and sales. Direct Marketing is the translation of oneon-one, face-to-face selling into broad reach media.
Reasons for the growth in direct marketing
The range of direct marketing techniques
General Advertising and Direct Mail A Simple Comparison
Mass Competitive Attention Breadth Remember Impression Pay for Everyone
Targeted Selective Attention Depth Respond Decision Pay for Targets
The Two Most Important Factors in DM
Refining the target based on pre-existing level of interest
What does it take to provoke response?
The Relative Power of Media
Likeability Demands Time Expensive
Sound Eye Contact
Demo Ability One-to-One Provides Time Pre-selection No Attention Competition Chemistry
The Relative Power of Media
Sight Pre-selection Low attention competition
Easy not to engage
4 seconds to involve Postal system dependent List dependent
The Relative Power of Media
Sound Some Chemistry Interaction One-to-One Pre-selection Low Attention Competition
Interruptive Requires Time Annoying
the less valuable the customer.
. offer) Cost of persuasion power is inversely proportional to the level of pre-existing interest within a prospect universe
The more it costs to acquire a customer. watch). the more expensive the cost of buying sales time (choice of medium.
The more resistant the universe.Some Unfortunate Truths About Direct Marketing
The more we need people to read (listen. the less willing they are to do so. and devices within each medium.
Direct Marketing tools are typically used to narrow the universe to “qualified prospects” .
DM sells the next step in the sequence.
.Sales Support – The Sales Sequence
The sales sequence is the set of decision steps necessary to close a sale matched with a set of communications designed to provoke each step. The cost of acquisition is the total cost of all the contacts at each step necessary to provoke a single decision to the next step.
000 Step 2: Qualification Vehicle: Telephone Universe: 500 Step 3: Sales Call Vehicle: LPS (Local Personal Service) Universe: 50
Cost/Contact: $1.000/500 = $20
Cost/Contact: $10.000/13 = $770
Total Cost of Acquisition = $20 + $100 + 770 = $890
.The Cost of Acquisition in a Sales Sequence
Step1: Lead Generation Vehicle: Direct Mail Universe: 10.00
Conversion to Appt.00
Conversion to Sale: 25%
Cost/Sale: 50 x $200 = $10.00
Response Rate: 5% Cost/Conversion: $10.000/50 = $100
Cost/Contact: $200. : 10% Cost/Appointment: 500 x 10 = 5.
Phone Generate and Qualify Id decision process
Mail/Email Provide Info Confirm Call Back
LPS Demo Close
Questions Set appt.
Sell the next step.Common Sales Sequences
Qualify Decision Authority Determine who is involved
Provide information or quote
Qualified leads are based on need – not interest
Ad Generated Interest
Need Generated Interest
state. SCF. carrier
SIC (Standard Industrial Classification) Employee Size Annual Sales/Revenue Title Any other information captured on subscription form (publications) Corporate linkage information # of years in business Geographical (zip. SCF. county.Selection Factors
Consumer Lists Business Lists
Income Gender Marital Status
Dwelling Type (home or apartment) Mail order buying (by product type) Interests Presence of children Geographical (zip. county. state) Credit information
Outer Envelope Formats
Window Envelopes Plastic Card Invoice Personal Odd Size (9x12. 6x9) Offer Disclosing Lumpy Certified
Meter Handwritten Invitation
.Outer Envelope Formats
See Through Dimensional Tactile Devices Teasers 1st Class vs. Third Stamp vs.
S.Letter Planning and Structure
The Opening The Body The Close The Signature The P.
Writing Leads for Letters – How to Start
A strong. etc. research result. recognition of status as a donor/contributor
Tell a story A quote Reference a competitor
. startling fact. something true of their industry Establish a connection
referral similar occupation status as a customer.
Appeal rotation Decision cycles
Letters/email from the rep New information (pricing. research. etc.
The Three Phases in the Lifetime of a Customer
Phase Phase Phase
Reinforce Decision Key to Source and Channel
Personalize Build Trust Quantify Potential
Cross-Sell Fit Value Proposition to Customer Needs
Project LTV from early behavior
Provide opportunities for additional transactions while interest is high Use communication to drive behavior and the relationship
.The Second Transaction is Critical
Customers are converted or lost in the first 30 – 120 days Create positive early experiences that cement the relationship
Management – Retaining/Growing the Relationship at the Lowest Cost
Customers A B C D
Mailings 12x 8x 7x 6x
The Issues in the Management of Direct Marketing
Relationship retention Relationship growth Matching cost of retention and growth stimulation to LTV Retention and growth are accomplished by frequency of contact and power of contact It is easier to convert „B‟ customers to „A‟s‟ than D‟s to C‟s
800) 4 ($1.)
D ($250/yr.200) 2 ($.$500/yr.)
$2.600) Phone Mail/ E-Mail 12 ($24) 14 ($28) 16 ($32) 16 ($32) Annual Cost $ $3.Compares' of a Sales Support Situation
Customers Face-toFace 12 ($3.1MM/yr.)
12 ($120) 18 ($180) 12 ($120) 8 ($80)
B ($500 .008
C ($250 .600) 6 ($1.
” Dale Carnegie
.The Last Premise
Focus on Them
“You can make more friends in 2 months by becoming interested in other people than you can in 2 years by trying to get people interested in you.
Recipients of Direct Mail
Have pre-existing interest Will read more copy Require less costly mail Mailing to customers generates $ and improves retention
Pre-existing interest is “likely” Requires more expensive mail to buy readership Resistant to reading (looking for a reason to stop) Relevance is key
Mail Room Administrative Assistant Spouse Post Office
Special interest offerings tend to do best in direct mail. looking for a reason to stop
The margin of error on direct mail is greater than in any other medium. People are not dying to hear from you.More Unfortunate Truths .Direct Mail
People read direct mail.
. Very little body copy is ever actually re-read. the more limited the growth potential (requires product proliferation – old/new/same). There is a direct relationship between readership and response. but the more specialized the interest. There is an inverse relationship between degree of pre-existing interest and cost per response.
People read direct mail. There is an inverse relationship between degree of pre-existing interest and cost per response.
. People are not dying to hear from you. looking for a reason to stop
The margin of error on direct mail is greater than in any other medium. but the more specialized the interest.More Unfortunate Truths . the more limited the growth potential (requires product proliferation – old/new/same).
Special interest offerings tend to do best in direct mail. There is a direct relationship between readership and response. Very little body copy is ever actually re-read.
Arrange opportunities for representatives. Direct sales. Account servicing.Applications of telemarketing
Generate leads. Encourage cross / up selling.
. Dealer support. Test marketing. Screen leads before follow up. Market research.
Use of telemarketing
New business and lead generation 28%
Customer care 26%
Customer service Brand loyalty Crisis management 26% 14% 6%
• • •
Do‟s and don‟ts of telemarketing – The do‟s
Do‟s and don‟ts of telemarketing – The don‟ts
.Limitations of telemarketing
Operational issues .requires systems that can cope with volumes of inbound calls. Regulatory issues regarding for example unsolicited mail and cold calling.