Direct Marketing An interactive marketing system controlled by the marketer. The marketer develops and promotes products directly to customers, and then accepts and distributes orders directly. The marketplace is moving away from traditional marketing and advertising and toward direct marketing and Internet techniques. Direct mail has been around for years and at one time it was perceived to be the bottom of the marketing pecking order. How things have changed! Traditional and conservative organizations who once scoffed upon direct marketing are now some of the heaviest users and believers in the strategy today (banks and other financial institutions, telecommunications companies, computer hardware and software companies, ads so on. What an organization like Columbia House new about marketing in the 1960s is now state-of-the-art marketing. Granted, it is a more complex version of it (e.g., database management techniques and interactive media to create awareness and induce action). Marketer Media Customer Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Direct Response Advertising Advertising through any medium designed to generate a response by any means that is measurable. Direct Mail Direct Response Television Telemarketing Catalogues Direct marketing employs the media to get the message out. Common techniques include direct mail, direct response television, telemarketing, catalogues, and the Internet. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Direct Mail Mail is the most common form of direct response advertising. Mail options include: Sales Letters Leaflets and Flyers Folders Statement Stuffers Videocassettes and CD-ROMS Sales Letters - the primary communication in a mailing package; they are personalized but do look like a form letter in most cases. Leaflets and Flyers - letter-sized pages that offer relevant information and accompany a letter. Folders - sales messages printed on heavier paper; often accompany a letter; may be in the form of a postage-paid reply card. Statement Stuffers (Bounce Backs) - advertisements distributed along with charge account statements (e.g., additional offers from Sears, The Bay and so on). Solo Direct Mail - a mail package that includes only one offer. Cooperative Direct Mail - a mail package that includes numerous offers but from non-competing products and services. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Direct Mail Strategy Solo Direct Mail Cooperative Direct Mail Individually prepared offers sent directly to prospects Cooperative Direct Mail Special offers from non-competing products in one envelope Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Advantages of Direct Mail Audience Selectivity High Reach Geographic Flexibility Control Exclusivity Measurability Audience Selectivity - targets are precisely defined in terms of demographic characteristics. Prospect lists can be acquired. High Reach - solo direct mailings reach everyone the advertiser would like to reach; cooperative mailings offer mass distribution to selected Canadian households. Control - of message quality; and circulation in the case of solo mailings. Exclusivity - coop mailings do not carry offers for competing products. Measurability - success is measured in only one way--the sales generated by the mailing. Early responses in conjunction with historical data can accurately project sales over a longer period. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Disadvantages of Direct Mail Image and Life Span Absence of Editorial Support High Cost per Exposure Image - junk mail image is difficult to overcome. Absence of Editorial Support - direct mail stands alone; it must grab attention without assistance. High Cost per Exposure - when all aspects of the mailing are factored in (production , list acquisition, development, mailing and fulfillment) the cost per exposure can exceed alternatives). Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Buying Direct Mail There are three basic steps involved in buying direct mail: Obtain a proper prospect list. Conceive and produce the mailing piece. Distribute the mail offer. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Obtaining Direct Mail Lists Lists of names are obtained from internal and external sources. Internal Customer database—a house list External List Brokers Merge / Purge The quality of a direct mail offer is directly linked to the quality of the list that is used. As the characteristics of the demographcis become more specialized (e.g., additional characteristics are added), the cost of each name increases. The best list is a list of current customers available from an internal database. Organizations must keep their database up to date. High quality external lists are obtained through a merge/purge process on a computer whereby numerous lists are purchased, combined, and stripped of duplicate names. Canada Post also offers god information for accurate targeting of mailings. It is all done through postal code data that can be married to other data available from the government (e.g., census data and income tax data). Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Types of Lists Specialized quality lists cost more. Names are bought on a CPM basis. Lists available include: Response Lists Circulation Lists Compiled Lists Response List - a list of proven mail-order buyers. Circulation List - magazine subscription lists that target specific customers. Compiled List - lists prepared from government, census, telephone, warranty, and other publication information. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Catalogues general and specific interest catalogues Reference publications distributed by retailers and direct marketing organizations general and specific interest catalogues $2 billion in sales annually electronic catalogues (Internet) The Canadian catalogue market is grossly underdeveloped compared to the United States. The U.S. market generates $50 billion a year in sales. That should equate to a $5 billion Canadian market. Catalogue marketers are now going online to capitalize on the e-commerce phenomenon. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Catalogues Sears, by far, is the largest catalogue organization in Canada ($1.5 billion in sales) followed by Canadian Tire. Both organizations are merging catalogues with online marketing efforts. Customers are into multi-channel shopping. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Direct Response Television There are three forms of direct response television: 60-second or longer commercials Infomercials Direct home shopping Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Direct Response Television Direct response commercials are classified based on the intent of the ad. Traditional “Buy now”or “Limited time offer.” Immediate action is the goal. Growth in direct response television has caused marketers to consider using the medium differently. At one time it was a vehicle for stimulating immediate sales. Now it is also used to build brand and company image. The infomercial present a sales message in great detail and asks for the order over and over again. The range of products now using this technique are endless. From a U.S. survey it ha been determined that 30% of people have purchased a direct response product. In order of priority, home shopping ranked first, direct response commercials second, and infomercials third. Traditional - an infomercial that stresses how to buy now. It tells and sells continuously. Corporate - an infomercial that establishes leads, drives retail traffic, launches new products, creates awareness, and protects and enhances brand image. Corporate or Brand Establish leads, create awareness, and build image. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Direct Home Shopping Cable television networks offer products for sale by broadcast message. Product messages presented by close-up shots Ordering details presented frequently Provides shoppers convenience The explosion in specialty television channels in the 1990s spawned the Value Plus network and the Canadian Home Shopping Channel. Viewers can listen to the sales pitch and order directly via 1-800 numbers. The medium lacks glamour, but don’t underestimate its sales potential. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Telemarketing Telemarketing generates $15 billion in sales annually in Canada. Call Centre Inbound Telemarketing represents about 60% of sales generated by direct marketing techniques. Inbound - the reception of calls by an order desk; the phones start ringing after the offer has been announced. Outbound - calls that an organization make to customers to develop new accounts, generate leads, and even close a sale. A drawback to telemarketing is the fact that consumers react negatively to it. A survey by Ernst & Young d that 75% of Canadians consider marketing calls unwelcome and intrusive; they are ranked by consumers as one of the least desirable sales techniques. Marketers believe the cost efficiency of telemarketing outweigh the disadvantages. Outbound Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.

Telemarketing Telemarketing is cost efficient. It is much less expensive than personal selling and mass advertising. Proper training and preparation of representatives is crucial. The message delivered is as important as the medium itself. Canadian Advertising in Action, 6th ed. Keith J. Tuckwell ©2003 Pearson Education Canada Inc.