MARKETING

COMMUNICATIONS
Week 8
Direct Marketing
Martin Haley
Office : Airedale Building Room 1.3
E-mail : M.Haley1@Bradford.ac.uk

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 Direct marketing

³Any activity which creates and

profitably exploits a one-to-one
relationship between a
company and its customer or
prospect´
Drayton Bird
 !
  

³Direct marketing is a method of

distribution in which
transactions are completed
between buyer and seller
without the intervention of a
salesperson or retail outlet´
j


 !
  

³Direct marketing is the process in

which individual customers¶ responses
and transactions are recorded.. and the
data used to inform the targeting,
execution and control of actions ..that
are designed to start, develop and
prolong profitable customer
relationships´ á


 TICC factor
@
 ± DM is precision targeting

 - generates direct enquiries from
customers and prospects


± accountable, because direct

enquiries and orders are measurable

 ± increasing customer loyalty,

retention and recruitment
 A bit of history
Direct marketing¶s roots are in mail order
µWe guarantee all our goods. If any of them
are unsatisfactory after due inspection, we
will take them back, pay all expenses and
refund the money paid for them.¶
Montgomery Ward catalogue (USA)1875
 Direct Marketing types

Pedigree brand ± First Direct,

Direct Line, QPD, Bordeau Direct
Hybrid brands - Next
Sales channel and brand vehicle-
Tesco
 Catalysts of change

ùDecline of personal service

ùIncreased retail power
ùDemise of brand loyalty
ùTechnology
ùA more demanding customer
 Market fragmentation

ùSocial & demographic changes

ùEconomic & distribution changes
ùTechnological changes in the media
ùNeed for faster investment recovery
ùNeed for lower transaction costs
How the computer changed the
score
ùCheap, powerful technology accessible
ùSegmentation by customer behaviour
ùTransactional database
ùCredit scoring
ùElectoral roll
ùCensus data & predictive modelling
ùPostcode software developed
 The Database
‡ Improves targeting ‡ Analyses financial
‡ Measures results performance
‡ Facilitates ‡ Provides predictive
continuity information
‡ Identifies key ‡ Triggers communication
customers ‡ Helps marketing
research
 Lifestyle databases
‡Income category
‡Housing type
‡Motivations á   

‡Purchases á
á
 á
‡Sports & Hobbies
‡Reading & viewing patterns
 Business Markets
SIC from 1948 to now
Government statistical reports harmonised with
EC
17 sections
14 sub-sections
60 divisions
222 groups
503 classes ± 142 subclasses
 Advantages of a relational
database
‡ ALL customers,
not just a sample ‡ Who buys what product
‡ RFV ‡ Continuous information
‡ Who they are ‡ Up to date
‡ Which ones are new ‡ Analysis of marketing
activity
‡ Who is lapsed or
dormant ‡ Controlled testing
‡ Forecasting
 Testing
‡ ³To find a Prince, you have to kiss an
awful lot of frogs´ (anon)

‡ ³If you rely on testing, you don¶t have to

worry about creative flair, or guesswork.
Your customers will tell you´ Drayton Bird
 Its not what you say its what
people hear
‡ Save 50 per cent ‡ Two for £30

‡ 50 per cent off

‡ Half price
‡ Save £15
‡ Buy one get one
FREE
 Users of direct marketing
‡ Banks ‡ Clothes shops and
‡ Building societies retailers
‡ Car makers
‡ Charities
‡ Magazines
‡ Airlines
‡ Business to business
‡ Travel agents suppliers
‡ Real estate agents ‡ Book & music clubs
‡ Computer/supplies ‡ Self improvement
‡ Theatre/cinema tickets ‡ Insurance
‡ Restaurants ‡ Health care
 Direct Marketing Media
‡ Direct mail ‡ Telemarketing
‡ Door to door ‡ Catalogues
‡ Inserts ‡ Parcel inserts
‡ Radio ‡ Press
‡ TV ‡ The Internet
 Direct Mail
‡ Personally addressed, sent through the
post, highly targeted.
‡ 15% of all promotional expenditure
‡ Costly £250-500 per thousand.
‡ As volumes have increased response
rates have fallen.
‡ 75% opened, 53% read ( Day 2000)
 Telemarketing
‡ Inbound and Outbound calls.
‡ Research, selling, building relationships.
‡ Immediate feedback, opportunity to overcome
objections, effectiveness easily measured.
‡ Canned, Framed or Customised
‡ Cost approx £10 per call to reach decision
maker
‡ Carelines and Customer Feedback
 Print
‡ Catalogues Freemans, GUS, Grattans.
‡ Mini Catalogues- Innovations,
Kaleidoscope, Racing Green, RSPB.
‡ Press Ads. with direct response
mechanism.
 Door to Door
‡ Traditional Milk, Pop, Ringtones, Tea
‡ Avon
‡ Door to door leaflet drops
 New Media
‡ Interactive digital television, shopping
channels
‡ Internet
‡ SMS
 Integrating DM into the mix

Support for other activities

Personal selling and sales force
Multiple channel selling
Accessing difficult locations/ low
priority customers
Locating new customers
Advantages of Direct Marketing
‡ targeting
‡ cost effective
‡ control and accountability
‡ immediate and flexible
‡ opportunity to test
‡ International
‡ opportunity to build a database
‡ tailored messages
‡ long-term customers
‡ multifunctional
 Disadvantages of Direct
Marketing
± upsetting channel intermediaries
± high acquisition costs
± heavy investment cost to build database
± Risk
± intrusion/invasion of privacy?