1. Direct and Database foundations

2. Direct-Response Medium/
In What Ways
Is The Internet A
Direct-Response Medium/
Channel?
And Why Does It Matter?

3. DIRECT/INTERACTIVE MARKETING

4. Why did P&G Resort to DM for Cheer Free and Clear
Why did P&G Resort to DM for Cheer Free and Clear? (Long before the Internet)

5. How Did P&G Benefit? Branded Soap Opera Samples, Coupons Offer
Or go live to another P&G brand site to show other examples of direct-response activities, including list building
Branded Soap Opera
Samples, Coupons Offer

6. The Basic strategies

7. Strategy Elements Offer List (or Other Targeting Mechanism) Media
Creative Execution
Service and Support

8. All Direct-Response Promotions
Key execution element
All Direct-Response Promotions
Have a
Clear CALL TO ACTION.

9. Actions Desired on the Internet
To Keep the Visitor on the Site Longer
To Get The Visitor to Request More Information (To Inquire)
To Make a Sale

10. What is the Call to Action? The Incentive?

11. A trusted Brand is key to Direct-Response success

12. Importance of Front vs. Back end
Front End
Back End
All Activities Leading to Sale
Branding
Marketing
Advertising
Website or Retail Display
and others
All Post-Sale Activities
Fulfillment
Customer Service
Customer Support/Help

13. Good Back End > Satisfied Customer Satisfied Customer > Higher CLV

14. Customer Lifetime Value
The Net Present Value
Of the Customer Revenue Stream
Minus the Cost of Acquiring and Servicing the Customer

15. Customer Lifetime Value
Net Customer Revenue (How Many Years Out?)
Deduct Acquisition Cost from Y1 Revenue
- Cost of Goods Sold
= Gross Margin
- Cost of Servicing
= Customer Revenue
x Cost of Capital (Adjusted for Risk)
= NPV of Revenue Stream of Customer

16. The process

17. Lifetime value, supermarket customer

18. Add a retention program

19. Targeting Increases CLV

20. How Do I Acquire MORE Customers
Acquisition Cost has Big Impact on CLV
How Do I Acquire MORE Customers
Like My BEST Customers?

21. Marketers Interested in Value of Another Acquisition Channel
A Facebook Fan
Another Acquisition Channel
Is It Best?
We don’t know the answer to the question. It is good for certain demographics; could turn out to be best for a segment like Millennials that is a heavy Facebook user
In any event, no one acquisition channel is likely to ever be sufficient.

22. Value includes referrals, more
The video on the value of a Twitter follower

23. Value to brand Fans Spent $71.48 More Than Non-Fans
Fans 28% More Likely to Continue Use
Fans 41% More Likely to Recommend
Fans More Likely to Be Favorable to Brand

24. Testing to find What Works
Many Test Designs
A/B Split is Simplest
Change Only One Element
Any Change in Outcomes Due to Change
Test ‘Big Things’
Test Execution
Test New vs. Control
Test Version A vs. Version B
The Test and Target product demo

25. Testing direct response programs
Recipe A – The Control
Recipe B – The Test

26. The Test New Creative Execution Outcomes Smaller Product (Hero) Image
Move Content ‘Above Fold’ (Smaller Images)
White Background
Outcomes
Revenue per Visitor %
Average Order Value %
Click-Throughs

27. The business response?
CONTINUE TESTING!

28. The Testing Process

29. Complex experimental design

30. The database imperative

31. Harrah’s Closed Loop database marketing system
There is history/description and other good graphics at

32. Enabling technologies, processes

33. Database for analysis & execution

34. Next step - Mining the database
“Automated Extraction of Hidden Predictive Information from Databases”
“Automated PREDICTION of Trends and Behaviors”
Also Described as Pattern Detection

35. Datamining at harrah’s
26% of Patrons Generate 82% of Revenue
Not Stereotype ‘High Rollers’
Middle Aged, Middle Class Slot Players
Responded Better to Free Chips than to Traditional Free Rooms/ Meals/ Shows
Satisfied Customers Spending 24%/yr
Dissatisfied Customers Spending 10%/yr

36. Datamining in the NBA (From Basketball decisions to business decisions)
Stafford’s full presentation, with background and additional data slides, is at

37. Hierarchy of database marketing continuing, iterative process over time
The Nike ID site is the customization opportunity mentioned in the text and students like it
If you are looking for something different, Zazzle has a more diverse product offering of products students can relate to

38. summary
Generic Strategies – Acquisition > Conversion > Retention/Value Growth
Direct Response Different from Brand Marketing
Offer, List, Media, Creative, Customer Service/Support
Call to Action, Incentives Common
DM Tools –
Front End/Back End; CLV/Calculation & Strategy; Testing
Database Marketing, Data Mining
Continuous, Iterative Process
Gather, Analyze, Execute, Test, Make Decisions, Repeat