Title: Direct Marketing and Personal Selling
1Direct Marketing and Personal Selling
2Introductory Scenario Don Mess With Less
- Who was Les Wunderman?
- He created the Columbia House record club and
invented the modern era of direct marketing. - The genius of his idea was creating a dialogue
(monthly response) with consumers which led to
building a relationship with the brand.
3Direct Marketing
- An interactive system of marketing which uses one
or more advertising media to effect a measurable
response and/or transaction at any location. - Common purposes of direct marketing
- Solicit and close a sale
- Identify prospects for future contacts
- Provide in-depth information
- Seek information from consumers
- Foster brand loyalty
4Ad in Context Example
L.L. Bean built an entire business around direct
marketing.
5Direct Marketing A Look Back
- L.L. Bean founded in 1912
- Fundamental strategy
- Commitment to quality
- Descriptive copy that was informative, factual,
low-key - Satisfaction guarantee
- Bean built a good mailing list
- By 1990 Beans sales were 600 million by 2007,
over 1.5 billion
6Direct Marketing Milestones
- 1450 Invention of movable type
- 1667 First gardening catalog
- 1744 Franklin formulates mail-order concept of
satisfaction guaranteed - 1872 Montgomery Ward catalog
- 1886 Sears starts mail-order business
- 1917 Direct Marketing Advertising Association
founded
7Direct Marketing Milestones
- 1928 Third-class bulk mail introduced
- 1950 First credit card
- 1951 Lillian Vernon places first ad
- 1953 Publishers Clearing House founded
- 1967 ATT introduces toll-free 800
- 1992 Over 100 million in U.S. shop at home
8Direct Marketing Today
- More than just mail-order.
- A complex, diverse tool used by organizations
throughout the world. - Direct marketing often is not integrated with
other advertising efforts. - Three Principle Purposes
- close a sale with a customer
- ID prospects and develop customer database
- Engage customers, seek their advice and
- generate brand loyalty
9Whats Driving Direct Marketing?
- CONVENIENCE! for todays dual income and single
parent households. - More liberal attitudes toward using credit.
- Greater access to toll-free calling.
- Computer technology/new media facilitate online
transactions. - More precise segmentation.
- Opportunity for relationship building.
- Cost per inquiry (CPI) and cost per order (CPO)
advantages of direct marketing.
10Ad in Context Example
Marketers, like The Adirondack Country Store, use
catalogs, toll free numbers, and the Web to take
advantage of direct marketing opportunities.
11Database Marketing
- Knowing who the best customers are as well as
what and how often they buy. - Mailing lists
- Internal lists
- External lists
12Ad in Context Example
Databases allow direct communication with
customers like this Saturn newsletter.
13List Enhancement
- Augmenting lists with externally provided lists
- Incorporating information from external databases
- Demographic data
- Geodemographic data
- Psychographic data
- Behavioral data
PPT 19-13
14The Marketing Database
- Includes data collected directly from individual
customers - RFM Analysis of customers recency, frequency,
monetary - Goal Develop cybernetic intimacy
- Marketing database applications
- Frequency-marketing programs
- Cross-selling
- Privacy concerns
- Do not call registry
- Spam blockers
- Opt-out options
15Media Applications in Direct Marketing
- Direct response advertising
- Direct Mail
- Telemarketing
- E-mail
- Other media
- Magazines
- Newspapers
- Infomercials
16Direct Mail
- Advantages
- Selective, flexible, little waste, lends itself
to testing, uses many formats - Disadvantages
- Direct mail is expensive
- May cost 15 to 20 times more to reach a person
with a direct mail piece than with a TV
commercial - Mail lists can be plagued with bad addresses
- Mail delivery dates can be unpredictable
17Ad in Context Example
Direct mail offers some creative opportunities.
18Telemarketing
- Telemarketing can be a potent tool. As with
direct mail - Contacts can be selectively targeted.
- The impact of programs is easy to track.
- Experimentation with different scripts and
delivery formats is simple and practical. - Telemarketing involves live constructive
dialogue.
19Telemarketing
- Telemarketing shares many of direct mails
limitations - Very expensive on a cost-per-contact basis.
- Names and addresses go bad as people move, so too
do phone numbers - 15 percent of the numbers
called are inaccurate. - Telemarketing does not share direct mails
flexibility in delivery options. When you reach
people in their home or workplace, you have a
limited span of time to convey information and
request some response. - Telemarketing is becoming a highly maligned
practice in consumers. - By 2007, over 70 percent of US households had
registered their phone numbers with the Do not
call registry.
20E-Mail
- Bulk e-mail is known as spam
- Fraudulent email know as phishing
- However e-mail is an increasingly popular tool
for marketers - Advantages
- Cheap
- Good response rates
- Netiquette suggests getting consumer permission
to send product information - Avoid bulk e-mailings
21Direct Response Advertising in Other Media
- Magazines use bind-in insert cards
- Toll-free 800 numbers are vital to direct
marketers using ads in newspapers and magazines - Infomercial
- Long television advertisement
- Range in length from 3 to 60 minutes
- Keys to success
- Testimonials, Frequent call to actions, ensure
same-day response - New research shows that direct response ads are
the least likely to be zapped by DVR users
22Ad in Context Example
Magazine ads are ideal for Direct Response
Advertising.
23Closing the Sale with Direct Marketing and/or
Personal Selling
- Functional specialists across several media need
to work together. - Marketing databases can lead to interdepartmental
rivalries. - Growth of direct marketing often means cuts in
other promotional budgets. - One solution the MARCOM manager.
24The Critical Role ofPersonal Selling
- The face-to-face communication and persuasion
process. - Most effective with products or services that
are - Higher priced
- Complicated to use
- Tailored/customized to users needs
- Offer a trade-in option
- Judged at the point of purchase
25Types of Personal Selling
- Order taking accepting orders for merchandise or
scheduling services deal with existing
customers who are lucrative to a business due the
low cost of generating additional revenues from
them. Order taking is the least sophisticated of
selling efforts. - Creative selling selling where customers rely
heavily on the salesperson for technical
information, advice, and service. It is the most
sophisticated and complex selling effort.
26Types of Personal Selling
- System selling entails selling a set of
interrelated components that fulfill all or a
majority of a customers needs in a particular
area. System selling is often executed by a
team of sales people. - The missionary salesperson calls on accounts
with the purpose of monitoring the satisfaction
of buyers and updating buyers needs. They may
provide product information after a purchase.
27Customer Relationship Management (CRM)
- Salespeople play a critical role in cultivating
long-term relationships with customerswhich
often is referred to as a customer relationship
management (CRM) program. - CRM views the relationship with buyers as a
partnership and a problem solving situation.