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Transcript of Direct Response Marketing Chapter 11. The Importance of Databases in IMC Planning Can be used for...
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Direct Response Marketing
Chapter 11
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The Importance of Databases in IMC Planning
Can be used for identifying and building relationships with customers through:
Data-driven Programs Data-driven communications Direct response offers
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Types of Databases
Operational database Customer transactions Follows accounting rules
Marketing database Current customer information Former customer information Prospect information
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Mail Catalogs Telemarketing Mass media Alternative media Internet E-mail
Methods of Direct Response Marketing
F I G U R E 1 1 . 1 4
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Methods of Direct Marketing
F I G U R E 1 1 . 1 0
24%
16%
46%
55%
17%
22%
29%
8%
10%
21%
24%
16%
73%
77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Outbound telemarketing
Inbound telemarketing
E-mail to prospects
E-mail to customers
Search engine optimization
Search engine marketing
Direct response-Internet
Direct response-TV
Direct response-radio
Direct response-promotions
Catalogs
Statement stuffers
Direct mail to prospects
Direct mail to customers
% of Companies Using Particular DM Methodology
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What’s Happening? Hey Denton this company is really cool. The
only have 2 products; One is green product and the other is super innovative.
Watch the video on there as well.
http://www.origaudio.com/ http://
www.fastcompany.com/magazine/144/remember-when-bad-products-happen-to-big-companies.html?partner=homepage_newsletter
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Direct Marketing
Direct connections with carefully targeted individual consumers
Message must appeal to target group Major problem is large volume of direct mail
received by both consumers and businesses. Intended to cultivate lasting customer
relationships Immediate and interactive in many cases A strong database allows precise targeting of
small groups
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Direct Marketing, con’t
Can be used as a supplement to existing channels of communication or stand-alone
Fastest growing form of marketing
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Database Driven Marketing Programs
Permission marketing Frequency/loyalty programs Customer relationship
management
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Steps in Developing aPermissions Marketing Program
Obtain permission from the customer. Offer the consumer a curriculum over
time. Reinforce the incentive to continue the
relationship. Increase the level of permission. Leverage the permission to benefit both
parties.
Source: Seth Godin, “Permission Marketing: The Way to Make Advertising WorkAgain, Direct Marketing, (May 1999), Vol. 62, No. 1, pp. 41-43.
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Maintain sales, margins, or profits. Increase loyalty of existing customers. Induce cross-selling to existing
customers. Differentiate a parity brand. Preempt the entry of a new brand. Preempt or match a competitor’s
frequency program.
Source: Grahame R. Dowling and Mark Uncles, “Do Customer Loyalty ProgramsReally Work?” Sloan Management Review, (Summer 1997), Vol. 38, No. 4, pp. 71-82.
Frequency Program Objectives
F I G U R E 1 1 . 9
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Reasons Retailers Develop Loyalty Programs
Source: A.C. Nielson, Santella & Associate
Promotes consumer loyalty 90%Increases “best shopper” sales 65%Gain consumer information 65%Maintain market share 42%Enhance image 29%Respond to competition 10%
Reason for program Indication %
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Reasons Consumers Opt into an E-mail Frequency Program
F I G U R E 1 1 . 7
24%
40%
38%
37%
41%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Friend recommended
Already customer
E-mail required toaccess content
Found site randomly
Sweepstakes orchance to win
Percent of Respondents
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Customer Relationship Management
Customer Driven Database Technology Interactivity through websites, call
centers, and other means of contacting customers
Mass customization technology
Foundations:
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Customer Relationship Management
Two measures of CRM include Lifetime value Share of the customer
CRM can be successful if: Firms differentiate customers in terms of their needs
and their value to the selling company Focus on relationships, not sales Be customer-driven, not technology-driven Customize some aspects of the goods or services
being offered to the customer