10-1 Chapter 10 Direct Marketing

Identify purposes served by direct marketing. 10-2 Identify purposes served by direct marketing. Explain the popularity of direct marketing. Distinguish a mailing list from a marketing database, and review the applications of each. Describe the media used by direct marketers in delivering messages to consumers.

Direct Marketing Today 10-3 Direct Marketing Today Direct marketing has its roots in catalog companies such as L.L.Bean. Many types of organizations are increasing their expenditures on direct marketing. These expenditures serve three primary purposes: Closing sales with customers Identifying prospects for future contacts Offering information and incentives to foster brand loyalty

10-4 Growing Popularity The growing popularity of direct marketing can be attributed to several factors. Convenience—credit cards, 800 numbers, and the Internet Computer power—building and mining large customer information files Tracking—lends itself to current emphasis on measurable outcomes

10-5 Database Marketing A mailing list is a file of names and addresses of current or potential customers, such as lists that might be generated by a credit card company or a catalog retailer. Internal lists—valuable for creating relationships with current customers External lists—useful in generating new customers List enhancement—adding demographic, geodemographic, psychographic, or behavioral data

Database Marketing, Continued 10-6 Database Marketing, Continued A marketing database is a natural extension of the internal list, but it also includes information about individual customers and their specific preferences and purchasing patterns. A marketing database allows organizations to identify and focus their efforts on their best customers using a recency, frequency, and monetary (RFM) analysis. Recognizing and reinforcing preferred customers helps build loyalty: Follow-up letters, discounts, coupons Frequency-marketing programs—database, benefit package, communications strategy Cross-selling opportunities also emerge once a database is in place. One can gain keener information about the motivations of current best customers, and insights usually emerge about how to attract new customers. However, companies must be sensitive to consumer’s rights and wishes to protect their privacy.

Media Used in Direct Marketing 10-7 Media Used in Direct Marketing Direct-marketing programs emanate from mailing lists and databases, but there is still a need to deliver a message to the customer. Direct mail, telemarketing, and email are the most common means used in executing direct marketing programs. Email is most successful when it avoids spam and uses opt-in lists. Because the advertising done as part of direct-marketing programs typically requests an immediate response from the customer, it is known as direct-response advertising. Conventional media such as newspapers, magazines, and radio also can be used to request a direct response by offering an 800 number or a Web address to facilitate customer contact. Television makes use of the infomercial for direct-response advertising. Successful infomercials require: a same-day response frequent closes testimonials (celebrities do no harm, but are not essential)