Optimal Database Marketing Drozdenko & Drake,

2 Marketing Databases and the Internet Chapter 15

Optimal Database Marketing Drozdenko & Drake, Objectives Examine basic Internet Strategy. Examine database integration access DM media. Review growth patterns for Internet marketing. Examine basic advantages and disadvantages of Internet Marketing. Examine communication options with .

Optimal Database Marketing Drozdenko & Drake, Internet Marketing Strategy Developing a strategy for Internet database marketing is fundamentally similar to developing strategies for other direct marketing media. Focusing on customer relationships and repeat business will be more profitable over the long term versus focusing on single transactions. Cross selling is also an important strategic option that applies to all direct marketing channels.

Optimal Database Marketing Drozdenko & Drake, Database Integration An integrated database allows multiple communications and transactions to be tracked, regardless of whether by phone, mail, Internet, wireless devices (m-commerce, or mobile commerce), or at a physical retail location. Indeed, the integrated clicks and mortar (aka clicks and bricks) approach is more common than single-channel marketing on the Internet. A study by the Boston Consulting Group of 400 online retailers showed that the clicks and mortar retailers accounted for 62% of online revenues, whereas pure online retailers accounted for 38%. The multichannel retailers have an advantage over the single-channel Internet marketers. They spend less to acquire customers, have lower marketing expenses, and have more repeat business.

Optimal Database Marketing Drozdenko & Drake, Traditiona l Mail Internet Wireless Telephon e Physical Location Integrated Database System Customer Record Updating Data Analysis and Data Mining Systems Strategy and Program Develop- ment Exhibit 15.1 Possible Inputs Into the Database for a Multichannel Marketer

Optimal Database Marketing Drozdenko & Drake, Growth in Internet Commerce Internet commerce is experiencing a dynamic growth at this time. While the predictions vary widely, there is consensus that both consumer and b-to-b Internet marketing will continue to grow over the next several years. Service seems to be an important aspect of Internet commerce and Internet marketers will have to develop effective and efficient methods of interacting with customers.

Optimal Database Marketing Drozdenko & Drake, The Internet Versus Other Database Marketing Media The Internet has potential cost savings in the following areas: Postal expenses Paper Transaction Service (possibly)

Optimal Database Marketing Drozdenko & Drake, The Internet Has the Following Potential Advantages Over Other Database Marketing Media Larger display of products 3-D representation More Frequent Catalog and Product Updates More Technical Information Speed Testing Offers Customer service Contact Initiation Real-time analysis

Optimal Database Marketing Drozdenko & Drake, Benefits of Online Ordering In the B-to-B Market It improves your company’s productivity by have customers order products and service online anytime It knows where a customer’s order is in the manufacturing and shipment process and how soon to expect delivery. It provides up-to-date product quotes to your company’s clients by accessing the most current price lists. It stays current with your company’s accounts payable and measures how expenses are tracking to your budgets. It reduces the time it takes from submitting an order to receiving the product

Optimal Database Marketing Drozdenko & Drake, Limitations of Internet Marketing Control of offers and promotions on the Internet Pictures and graphics- load time, resolution Customer concerns about privacy and security Target group access Driving traffic to a site Poor Reputation relative to brick and mortar

Optimal Database Marketing Drozdenko & Drake, Personalization: The Great Promise of the Internet Customers can receive personalized information on the Internet in several ways: Tailored Personalized Web pages Cookies Personalized Wireless Communications

Optimal Database Marketing Drozdenko & Drake, Marketing Because of cost sayings and other benefits, E- mail marketing is predicted to increase in the next several years. Although growing, lists are currently relatively small compared to paper mail and telemarketing lists.

Optimal Database Marketing Drozdenko & Drake, Applications Informing customers of new products Offering incentives (e.g., discounts, special offers) to customers Contact a targeted group of non-customers that have some similar characteristics to current customers Provide periodic (daily, weekly, monthly, etc.) information to customers in the form of newsletters, news briefs or other relevant information Follow-up contacts to people who have visited your website, trade show booth, etc. Update customers on order status

Optimal Database Marketing Drozdenko & Drake, and Permission It is important to differentiate between opt-in lists and lists that do not have the permission of the recipient to receive messages from list users. Verified opt-in requires an response after a person registers on a site and gives permission. “Non-permission” lists can also be acquired. Some list providers use computer programs that “harvest” addresses from websites. The term “spamming” refers to campaigns that are sent to recipients who did not specifically give permission for commercial of a specific type to be sent to them.

Optimal Database Marketing Drozdenko & Drake, Formats A number of formats have been used for marketing. At a basic level, the same message can be sent to all recipients. This is the cheapest and quickest method. However, because of the lack of personalization, software filters set up by the recipient or the ISP may screen out this type of message Personalized messages are also possible. Information from a database, such as first name, product ordered, inquire date, etc., can be inserted into the message to make it more relevant to the recipient.

Optimal Database Marketing Drozdenko & Drake, Formats… Additionally, messages can contain attachments such as document, picture or sound files and links to websites that the recipient can use to place an order or obtain more information. marketing can also be in the form of an individual offer, newsletters or periodic interest pieces. Daily s are sent to customers on a topic of interest.

Optimal Database Marketing Drozdenko & Drake,

Optimal Database Marketing Drozdenko & Drake,

Optimal Database Marketing Drozdenko & Drake, Review Questions 1. Discuss the advantages and limitations of Internet marketing. 2. Explain the concept of integrating databases across direct marketing channels. 3. What are the customer service possibilities on the Internet? 4. What methods are used to personalize communications on the Internet? 5. What are some of the customer variables that are collected on the Internet? 6. What are the differences between traditional print and lists?