THE DIRECT-RESPONSE AND DATABASE FOUNDATIONS OF INTERNET MARKETING

Prof. Rushen Chahal

Prof. Rushen Chahal

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Prof. Rushen Chahal

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In What Ways Is The Internet A Direct-Response Medium/ Channel?

And Why Does It Matter?
Prof. Rushen Chahal

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THE FOUR I¶s OF INTERNET MARKETING GIVE THE ANSWER

Prof. Rushen Chahal

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Retention

Conversion Acquisition

BASIC DIRECT-RESPONSE STRATEGIES
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Prof. Rushen Chahal

The Offer

CRITICAL STRATEGY ELEMENTS FROM D-R PERSPECTIVE The Service & Support

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The (email) List The Media

The Creative Execution

Prof. Rushen Chahal

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A GOOD OFFER HAS A CALL TO ACTION

B2B Offer

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A GOOD OFFER HAS A CALL TO ACTION

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B2C OFFER

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THE OTHER STRATEGY ELEMENTS
‡ The E-Mail List²For Customer Acquisition and Retention (Chapters 7 & 8) ‡ The Media ± The Internet
± Any Medium Can Be Direct-Response

‡ The Creative Execution
± Always Important; Less So For Direct Response

‡ The Service and Support (Chapter 11)
Prof. Rushen Chahal

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PROGRAMMATIC OBJECTIVES
‡ To Make A Sale

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‡ To Generate An Inquiry (Sales Lead) ‡ To Convert A Lead Into A Customer ‡ To Remain On The Web Site Longer And To Visit More Pages

Prof. Rushen Chahal

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IMPORTANT DEFINITIONS

THE FRONT END
All Pre-Sale Activities
‡ Marketing and Sales

THE BACK END
All After-Sale Activities
‡Includes Order Processing, Fulfillment, Service, Support

Prof. Rushen Chahal

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Is The Net Present Value Of The Gross Margin Minus Cost of Servicing An Individual Or A Cohort Of Customers. Reasons For Importance: ‡ The Best Metric For Judging The Success Of Customer Acquisition & Retention Programs ‡ The Most Powerful Segmentation Criterion
Prof. Rushen Chahal

WHAT IS CLV ± AND WHY IS IT SO Customer Lifetime Value IMPORTANT?

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EXAMPLE OF FIRST YEAR CLV
Total Sales Less: Total Costs Equals Gross Profit Times: Discount Rate $5,280,000 $5,148,800 $ 131,200 1.0

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NPV of First Year Revenue $ 131,200 CLV of Customer in Year 1 $ 26.24
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CLV OVER THREE YEARS

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INCREASING CLV WITH TARGETING

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THE IMPORTANCE OF TARGETING

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Testing to Determine Which Program/Offer/Price, etc. Works Best

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THE DATABASE IMPERATIVE

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DATABASE/ DATA WAREHOUSE

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BENEFITS OF A CUSTOMER DATABASE
Figure 5.7 goes here

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BENEFITS OF A CUSTOMER DATABASE
Using A Customer Database To Drive Targeted Marketing Programs Increases Customer Lifetime Value

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WHAT IS µDATA MINING¶?

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CHAID OUTPUT

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EVENT-DRIVEN MARKETING
‡ An Event In The Customer¶s Life
± Birthday, Graduation, etc.

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‡ An Event Created By A Marketer
± Fashion Show, In-Store Promotion, etc.

CAPTURE PARTICIPANT¶S E-MAIL ADDRESSES!
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HIERARCHY OF INTERACTIVE STRATEGIES

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5-25 STRATEGIC SUMMARY

‡ Interactivity of Internet = Direct-Response Medium
± Learning To Use In Branding Also (Chapter 7)

‡ ‡ ‡ ‡

Use For Customer Acquisition,Conversion,Retention Generate Sales, Leads, Site Stickiness Judge Success By Customer Lifetime Value To Increase Customer Lifetime Value Targeted, Information-Driven Marketing Is Essential
± Modeling, Data Mining ± Non-Traditional Techniques Like Events Build Database

‡ Interactive Marketing Strategies Should Increase In Customer Focus And May Decrease In Cost As Targeting And Personalization Improve
Prof. Rushen Chahal

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