14

Direct Marketing

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
 QVC

• $6.5 billion a year

• 2nd most profitable channel
• Once sold 4,000 silver rings ($70) in
just 3 ½ minutes
• 91 million homes
• 1 in 10 make purchase
• 40 to 60
 Direct Marketing Defined

The total of activities by which the seller directs efforts to

a target audience using one or more media for the
purpose of soliciting a response by phone, mail, or
personal visit from a prospect or customer

TV Selling
Radio

Direct Mail
Telemarketing

Direct Selling Magazine and Newspaper

 Growth of Direct Marketing

Direct
Marketing Consumer
Syndicates Credit Cards

Miscellaneous Changing
factors Structure of
Society

Changing
Structure of Technological
Markets Advances
Direct Marketing Combines With . . .

Advertising

Public
Internet Relations

Direct
Marketing
Support Personal
Media Selling
Sales
Promotions
San Diego Encourages Visits
How Database Marketing Works
A Comprehensive Consumer Database

Name Gender Occupation

Address/ Marital Transaction

Zip Code Status History

Telephone Family Promotion

Number Data History

Length of Inquiry
Education
Residence History

Unique
Age Income
Identifier
 A Business-to-Business Database

Industrial Headquarters
Contact Info
Classification Location

Contact Size of Purchase

Title Business History

Telephone Promotion
Revenues
Number History
Source of
Number of Inquiry
order, inquiry,
Employees History
referral
Credit Time in Unique
History Business Identifier
 Test Your Knowledge

For market segmentation and targeting, direct

marketers rely most heavily on:
A) Primary qualitative research
B) Census data
C) A database
D) Survey responses
E) Focus groups
 Objectives of Database Marketing

Improve Selection of
Market Segments

Stimulate Repeat
Purchases

Objectives
Cross-selling Other
Products

Customer Relationship
Management
• Track Customer Purchases and group them
on Purchase History
• Build a data base
• Keep track of communication preferences
• Let customers decide how to give feedback
• Empower staff to make decisions
• Track Staff actions and make improvements
• Try new ways to leverage customer
intelligence
• Always add to customer intelligence
• Develop customer intelligence on past
customers
• Do it now
 Developing a Database

List Services

Simmons Market Standard Rate &

Research Bureau Data Service

Sources
U.S. Census U.S. Postal
Bureau Service

Direct Marketing
Association
 Effective Databases

RFM Scoring

Monetary
Recency
transactions

Frequency
 Direct Marketing Strategies

One-Step Two-Step

• The medium is used • May use one medium

directly to obtain an to obtain inquiry and
order qualify prospect
• Often use 800 number • Typically follow up
phone orders and credit with a second medium
card payment to complete the sale
 Direct-Marketing Media

Infomercials Telemarketing

Print, catalogs Broadcast

Teleshopping TV Spots

Home
shopping Direct Mail
 Types of Direct Mail

All forms of advertising sent directly to

prospects through the U.S. Postal Service or
through private services

House lists Inclusions

Broadsides Postcards

Catalogs Reprints

Flyers Sales letters

Folders Self-mailers
Porsche Targets Prospects with Direct Mail
 Test Your Knowledge

Which of the following statements about the use of

catalogs in the direct-marketing industry is true?
A) Most business-to-business marketers use
print catalogs.
B) The number of catalogs mailed since
1984 has decreased significantly.
C) Many companies use catalogs in
conjunction with their more traditional
sales and promotional strategies.
D) No company today relies solely on catalog
sales.
E) The number of catalog shoppers has
declined steadily since 1984.
Success with Catalogs
TV Spots, Infomercials, and Homeshopping
• Catalogs $19.2 billion 2007
• TV $156 billion 2007
• Infomercials
– Single female 18 to 34 earning $50,000
to $99,900 per year
– Tell a story
– Good at Branding
– Must have a store presence
A Direct Response Print Ad
 Telemarketing
Outbound
Telephone calling by the
marketer or marketer’s agent to
individual prospects, seeking
purchase, subscription,
membership, or participation by
the call recipient.
Inbound
Marketers facilitate and
invite prospects to call a
central location via a long
distance number, by a toll-
free 800 number, or a
fixed-cost 900 number.
Audiotex or Telemedia
Forms of Direct Selling

Repetitive
person-to-person

Nonrepetitive
person-to-person

Party Plans
Cutco Knives Employs Direct Selling
Measuring Effectiveness

Cost per Order (CPO)

Direct Marketing Advantages

Selective reach
Segmentation capabilities

Frequency potential
Flexibility
Timing

Personalization
Costs
Measures of effectiveness
 Direct Marketing Disadvantages

Accuracy

Image Content
factors support

Do Not Rising
Contact lists costs