10-1

Chapter 10

Direct Marketing 10-2

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. 10-3 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 10-4 Direct Marketing Today, Continued

Exhibit 10.1 Some Direct Marketing Milestones 10-5 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 10-6 Growing Popularity, Continued

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. 10-7 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 10-8 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. 10-9 Database Marketing, Continued

Exhibit 10.2 What Makes a Marketing Database 10-10 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) 10-11 Media Used in Direct Marketing, Continued 10-12 Media Used in Direct Marketing, Continued

Exhibit 10.3 Elements of a Successful Infomerical