2. INTERNET MARKETING: INTEGRATING ONLINE AND OFFLINE STRATEGIES
Chapter 4
The Direct and Database Foundations of Internet Marketing

3. Chapter 2
Update!
DELL PREMIER PAGE

4. https://www. kintera. org/faf/donorReg/donorPledge. asp

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

8. FOUR I’s OF INTERNET MARKETING ARE THE ANSWER

9. P&G—MASS MARKET PRODUCTS - DIRECT-RESPONSE EXPERTISE

10. BASIC DIRECT-RESPONSE STRATEGIES
Retention
Conversion
Acquisition

11. CRITICAL STRATEGY ELEMENTS FROM DIRECT-RESPONSE PERSPECTIVE
The Service & Support
The Offer
The ( ) List
The Creative Execution
The Media

12. DIRECT-RESPONSE OBJECTIVES
Direct-Response Objectives are ACTION Objectives:
To Remain on the Site Longer (“Site Stickiness”)
Well Designed Site With Much Relevant Content
To Request Additional Information (Sales Lead)
To Make a Sale (E-Commerce)

13. SITE STICKINESS = ATTENTION

14. SITES RANKED BY ATTENTION

15. LANDING PAGE CAPTURES DATA
Figure 4-4a

16. PRODUCT PAGE SELLS
Figure 4-4b

17. THE REMAINING STRATEGY ELEMENTS
List for Customer Acquisition and Retention
The Media
ANY MEDIUM Can Be Direct Response With Action Objectives
Creative Execution
Historically Less Important in Direct Response
Rich Media Has Increased Role on Internet
Customer Service and Support

18. THE FRONT vs. THE BACK END
THE FRONT END
All Pre-Sale Activities
Marketing and Sales
THE BACK END
All After-Sale Activities
Includes Order Processing,
Fulfillment, Service, Support

19. WHAT IS CLV – AND WHY IS IT SO IMPORTANT?
Customer Lifetime Value
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

20. THE CONCEPTUAL FRAMEWORK

21. BASELINE CLV CALCULATION
Table 4-1

22. SUMMARY OF FIRST YEAR CLV
Total Sales
$5,280,000
Less: Total Costs
$5,148,800
Equals Gross Profit
$ 131,200
Times: Discount Rate
1.0
NPV of First Year Revenue
CLV of Customer in Year 1 $

23. INCREASE FROM TARGETED MARKETING PROGRAMS
Table 4-2

24. EFFECT OF TARGETED PROGRAMS ON CLV
Table 4-3

25. THE DIRECT RESPONSE TEST
Newsletter
Content Version A
Newsletter
Content Version B
A/B Split is One Of Many Types of Tests

26. THE TESTING PROCESS

28. TESTING DEMO

29. How is Testing
Different From Marketing Research?

30. TESTING vs. MARKETING RESEARCH
Testing Tells the Marketer WHAT WORKS.
Marketing Research Explains WHY IT WORKS.

31. RECOMMENDATION
Behavioral Analysis FIRST Faster, Cheaper, Actionable ONLY THEN Marketing Research IF You Need to Know “Why”

32. RECOMMENDATION FROM SHERPA

33. “Significantly Higher” from the Email Newsletter
Hormel Tested Coupon Distribution from an Newsletter vs. from Ads On Their Website
Coupon Redemption was
“Significantly Higher”
from the Newsletter

34. http://www. marketingexperiments

35. Most Viewers Guessed Wrong!

37. THE DATABASE IMPERATIVE
DATA WAREHOUSE
Marketing
Program Data
Support Data
Other
Business Data
External Data

38. USES OF CUSTOMER DATABASE

39. BENEFITS OF CUSTOMER DATABASE
Harrah’s Casinos Increased
Revenues and Profits
By Building and Using (Mining)
a Customer Database

40. A Set of Statistical Routines That Permit Pattern Detection
WHAT IS “DATA MINING?”
A Set of Statistical Routines
That Permit Pattern Detection
In Large Data Sets

41. HIERARCHY OF INTERACTIVE STRATEGIES

42. 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
Data Capture Through Transactions and Customer Contact
Modeling, Data Mining
Interactive Marketing Strategies Should Increase Customer Focus and Marketing Effectiveness
They May Decrease In Cost As Targeting And Personalization Improve