Chapter 10

Direct Marketing

10-1

1. Identify purposes served by direct

marketing.

2. Explain the popularity of direct

marketing.

3. Distinguish a mailing list from a

marketing database, and review the

applications of each.

4. Describe the media used by direct

marketers in delivering messages to

consumers.

10-2

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

10-3

Direct Marketing Today, Continued

Exhibit 10.1 Some Direct Marketing Milestones

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

Growing Popularity, Continued

10-6

Finding that waterfall in Wyoming will

take some planning, and Wyoming’s

offices of Travel & Tourism is happy to

help. The adventure begins with a

request for a vacation packet. This ad

provides two options: calling a toll-

free number or visiting the tourism

office’s website.

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

10-7

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.

10-8

Database Marketing, Continued

Exhibit 10.2 What Makes a Marketing Database

10-9

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)

10-10

Media Used in Direct Marketing, Continued

10-11

Media Used in Direct Marketing, Continued

10-12

Exhibit 10.3 Elements of a Successful Infomerical