What does direct marketing mean in translation? Principles of organizing direct marketing. Analysis of the conducted DM campaign
Direct marketing (direct marketing, direct marketing) is a set of activities through which companies successfully build direct marketing communications personally with each consumer of their goods and services and establish long-term mutually beneficial relationships with them. At the same time, communications are of a two-way nature: using direct marketing tools, you not only address customers directly, but also establish effective feedback, receiving a response to offers from your customers.
The essence of direct marketing activities can be formulated as "direct marketing", and all of them involve direct (and usually personal) appeal to customers. Among them are tools such as direct mail, courier delivery, telemarketing, faxing, e-mail newsletter.
An individual approach to each client will allow you to find out his preferences and, therefore, make a more convincing offer of your goods and services. An equally important aspect is the ability to establish long-term relationships with representatives of your target audience and increase their loyalty through direct marketing. Getting to know your customers personally will allow you to offer them exactly the products that are most attractive to them, and thus build a lasting relationship.
Only with the help of direct marketing tools will you be able to establish effective feedback and measure the reaction of your customers to offers, as well as detect the most effective or, conversely, non-working mechanisms. This will allow you to maximize the return on your DM events and spend the funds you have allocated for them with the greatest benefit.
Unlike mass communications, direct marketing is the most controlled tool. Using it in your marketing practice, you can fully control the costs of any stage of a complex DM campaign or when using separate direct marketing tools.
Direct marketing provides ample opportunities for marketing and creative experiments, since the flexibility of each of its tools allows you to unlimitedly vary and change the methods and forms of contacting customers at different stages of the DM campaign. At the same time, you have control over the tracking of the most effective offers and the time of their sending to the target audience. Thus, direct marketing makes it possible to accurately calculate the results of ongoing events.
At the same time, using traditional forms of advertising, whether it is an advertising module in a magazine or a TV spot, you will definitely “waste” them on a part of the non-target audience. Moreover, it is not possible to determine the percentage of ineffective use of their advertising in this case. And any direct marketing tool is aimed at ensuring that your information is never received by a random person. After all, one of the main tasks of direct marketing is to establish direct communication only with representatives of your target audience.
Establishing effective feedback will allow you to minimize financial risks by knowing exactly how customers react to your proposals. Since the customer response is predictable, you can calculate the necessary funds that need to be spent to get the planned result.
In addition, by eliminating numerous intermediaries between yourself and customers by establishing direct communications, you significantly save money. If certain intermediaries cannot be avoided for objective reasons, direct marketing enables you to eliminate unnecessary costs by identifying your target audience, to which you will contact at the most appropriate time with the most attractive offer.
Direct marketing allows you to better meet customer needs by improving the quality of services. After all, if you are directly familiar with your customers, you know their motivation in purchasing certain goods and needs, then you can interest them with individual offers. And developing relationships on a long-term basis will help to increase customer loyalty.
Essentially, direct marketing is effective way attracting and retaining customers and allows you to build such communications with consumers when the product ideally suits them and “sells itself”, without any intermediaries.
COMPLEX DM CAMPAIGN
A comprehensive DM campaign is the pinnacle of direct marketing. She concentrates in herself all the benefits individual services (direct mail, database, telemarketing, delivery service, fax, e-mail) and is a unique mechanism for its effect and flexibility. At the same time, the DM campaign is not just the sum of all the listed direct marketing tools. It gives you the opportunity to successfully build effective marketing communications with your customers, and therefore, to solve the tasks that are facing you.
The art of running a comprehensive DM campaign is the optimal combination of different direct marketing methods. Successful achievement of your business goals is based on consistency, degree of use, and creative solutions for all direct marketing tools. Only a verified and carefully planned DM campaign will help you achieve the desired result, and the specialists of our agency will help you with this.
A comprehensive DM campaign involves a set of tools, each of which can and should be used in the right combination with others. One of the most important advantages of direct marketing is the ability to almost endlessly change your messages to the target audience and accurately measure the response using these tools.
Our experts will help you most effectively compose messages for each type of communication, prepare and deliver them to your target audience, collect and analyze the reaction of your customers.
To win over a consumer, you need to know as much as possible about him. Only personal contact will give you maximum information about a potential client, but in order to establish it you will need to apply a number of direct marketing mechanisms.
Using databases in a comprehensive DM campaign will identify your target audience, which will help with your marketing research. Databases are necessary to address your offers directly to those customers who are most interested in your services or products.
Our agency has databases legal entities the capital and regions of the country, as well as the databases of individuals, which the company's specialists regularly check and update. We can check your database against agency lists, as well as compile a database for a specific advertising project. In this case, the base can be created according to an expanded number of parameters, which will allow you to identify potential customers and make them the right offer, which will not go unanswered.
Telemarketing will help you create the most accurate portrait of your target audience. The preliminary telephone call itself is not only an auxiliary tool, but also a self-sufficient marketing activity. With its help, we will compile a base for you for subsequent mailings, conduct surveys, organize hotline and call center.
Telemarketing makes it possible to establish direct contact with your customers. You can use the call-center services at any stage of the DM campaign, including to draw attention to direct mail or courier delivery. The service is also very effective in getting feedback from your target audience. This allows you to track customer reaction to your suggestions. According to telemarketing data, you can quickly adjust the course of advertising campaigns or marketing programs.
One of the most demanded direct marketing services - direct mail solves a number of tasks within the framework of a complex DM campaign. Direct mail, produced on a reliable database, delivers information directly to the addressee of interest to you. With this service you can establish permanent contact with customers and regularly inform them about new products, conditions, special events. A personalized message via direct mail will increase the loyalty of your audience. In addition, direct mail is one of the main tools in the implementation of loyalty programs.
Sending faxes will provide you with prompt delivery of information to your customers through the database. In the DM campaign, faxing can be carried out in conjunction with telemarketing, direct mail and courier delivery. An additional reminder of your product or service at a tangible low cost makes faxing a popular direct marketing tool.
E-mail (not to be confused with spam) in a complex DM campaign also usually accompanies other direct marketing services. With its help, you can inform your customers about new products, services, events, discounts, etc. The effectiveness of e-mailing is ensured by a proven database, in which customer addresses are entered only with their personal permission.
A courier service does not just deliver a business letter, documents, valuable gift or some other item to your client's hands. Using courier delivery as part of a DM campaign ensures that information is received accurately by those representatives of the target audience that you most need. This service emphasizes the particular importance of both the message and the client to whom it is delivered. This personalized approach increases audience loyalty and boosts sales.
Running a comprehensive DM campaign can help you achieve a variety of goals quickly and efficiently:
to interest consumers in new products or services;
increase sales or orders;
bring to the attention of certain categories of customers information about some special events;
maintain constant contact with your clients;
increase your brand awareness;
find new clients;
carry out activities within the framework of programs to support and develop loyalty among their audience.
The versatility of direct marketing services gives you the ability to combine and scale up their application in a comprehensive DM campaign, depending on the goals pursued. You can use different mechanisms for different categories of your target audience. If your customers are end consumers, use direct mail to convey the information you are interested in. The business audience can be addressed by fax mailing to offices, or, in the case of a special importance of the client, by courier delivery. Telemarketing after these activities will allow you to establish feedback and develop more effective marketing campaigns.
Whatever direct marketing services you use during your DM campaign, they all provide an opportunity to get an accurate response from your customers to your events. This allows, even during the campaign itself, to evaluate the effectiveness of the use of various tools and make changes as needed. This flexibility makes it possible to design and run optimal DM campaigns, while conventional advertising or marketing activities can be more costly and time consuming.
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The meaning of the concept
Direct marketing (direct marketing) means a set of activities with the help of which the company builds direct marketing communications personally with each consumer of its goods and services.
At the same time, communications are of a two-way nature: using direct marketing tools, it is possible not only to directly contact customers, but also to establish effective feedback with them, receiving a response to proposals from their customers.
The term direct marketing originated in America and was first coined by Lester Wunderman in 1967 while working with brands such as American Express and Columbia Records.
The practice of ordering goods by mail existed much earlier, it appeared with the invention of the typewriter in the late 19th century, when some companies took advantage of the innovation to send out catalogs, advertising brochures, leaflets, etc.
Fixed assets of direct marketing
1. Distributed materials (leaflets, inserts, brochures, free newspapers), which are intended for individuals.
2. Means of direct response (mail, telephone, fax, etc.), which are more suitable for legal entities.
3. Electronic means (Internet).
Benefits of direct marketing
Direct marketing has several benefits. It includes direct mail, which has the following benefits:
- Selectivity. It is the supplier of goods and services that chooses the region to which his advertising is directed, and the circle of individuals or legal entities to whom he wants to apply with his proposal.
- Confidentiality. After all, the company's advertising campaign can be hidden from the eyes of competitors. In the mailing list, you can make the most of the human factor, addressing personally to the person, and not to the abstract consumer.
- Lack of competitors' advertising. Unlike the media, where ads can get lost among competitors' ads, mailing lists will never go unnoticed.
- Execution speed. The postal item reaches the addressee within a maximum of a week.
Direct marketing opportunities
Direct telephone marketing is commonly used in addition to advertising and direct mail offers.Telephone marketing allows you to solve a number of problems:
- provides information about potential customers, which is necessary when planning an advertising campaign;
- provides information from respondents, which serves as the basis for future marketing;
- conducts market research using consumer surveys in order to find out their opinion about the company's products or the attractiveness of the offered discounts and bonuses.
- offers such a highly effective direct marketing tool as telephone presentations.
Thanks to this direct sales marketing service, you can significantly increase the flow of new customers in the B2B field with minimal financial and time investments.
Such a direct marketing tool as e-mailing is currently effective only for a narrow circle of organizations, because advertising messages, most often before reaching the competent person, get stuck at the system administrator level.
Direct marketing (direct marketing) is at least one of the possible strategies for finding new customers.
In addition, through direct marketing, existing customers are informed about the launch of a new product, price and
More than 30 years ago, an event took place in the history of the advertising business that significantly changed the principles of selling goods and services - direct marketing was invented, a new strategy of interaction with the consumer, which is still successfully used by companies around the world. Its author is Lester Wunderman. In November 1967, the term "direct marketing" was first used publicly in a speech by Lester Wunderman, owner of one of America's 40 leading agencies, at the Massachusetts Institute of Technology. And since then, direct marketing has firmly entered our lives.
The idea behind his new marketing strategy was that the chain, when the goods from the manufacturer to the wholesaler, from the wholesaler to retail, from retail to the final consumer, could be shortened. With the development of the media, with the development of databases, he suggested that it was possible to make the products from the manufacturer go directly to the consumer. And he began to actively implement his ideas of direct marketing in life. Among his inventions were such that are still widely used now: these are perfume samples or cosmeticsthat are pasted into magazines; placing a coupon together with an advertisement in a magazine or other print publication; inserts in magazines that differed in texture from the rest of the pages ...
They began to successfully promote the services of a client like American Express by means of direct marketing, mainly by mail. “General advertising creates an attitude of the buyer to the product, and direct marketing goes further, providing such a customer experience with the product, such an incentive to action. which leads to a purchase. Direct marketing actually brings the customer to the product, while mass advertising communicates the brand itself and creates awareness about the product. " - Lester Wunderman.
So, here are the 19 Lester Wunderman principles that direct marketing is based on:
- 1. Direct marketing is a strategy for building long-term relationships with a client, and not a tactic for conducting individual promotions and campaigns.
- 2. The "hero" of direct marketing is the Client, not the Product.
- 3. Treat each existing or future customer as your unique target audience.
- 4. Answer the question that a buyer might ask: "Why should I buy your product?"
- 5. Advertising should change behavior, not just attitude towards the product.
- 6. Advertising should be a profitable contribution and have quantitative characteristics of the effectiveness of its impact on the buyer.
- 7. Create a brand experience wherever the customer comes in contact with it.
- 8. Create a system of relationships, not just a system of meetings with the buyer.
- 9. Know and invest in the long-term customer potential of each client.
- 10. Prospective buyers are not potential customers yet. By reaching out to well-defined potential customers, you save on the cost of end-sales, while reaching out to the masses of potential buyers, you inevitably spend extra money on advertising.
- 11. The media should provide quantifiable contacts, not just “reach” and “frequency” of product exposure.
- 12. Provide customer feedback with you. Be available.
- 13. Encourage interactive dialogue.
- 14. Know the answer to the question "When?" Find out with the buyer when he would be ready to buy, and try to time your offer to this time.
- 15. Create a consistent program to introduce the customer to the product and related new offerings, similar to how you create a program to educate students.
- 16. Win over customers with the intention of making them loyal.
- 17. Loyalty building is a program built on consistent steps with a long-term perspective.
- 18. Stable profit is provided not so much by your market share as by the shares of loyal customers. Loyal customers account for 90% of the revenue of most companies.
- 19. The knowledge gained by the company from the sum of individual data and summary information is what builds success and minimizes errors. You are what you know. 19 principles of direct marketing by Lester Wunderman http://dmdays.com.ua/biblioteka/1160.html
1. Direct marketing, its tools, advantages.
Direct marketing (direct marketing, direct marketing) is a set of measures that help build long-term relationships with each consumer personally, and increase customer loyalty. When using direct marketing tools, effective feedback is established, the advertiser receives a response to the offers from consumers.
Direct marketing encompasses all marketing activities in which communication media and techniques are used with the specific intention of establishing a dialogue with stakeholders, the purpose of this dialogue is an individual and measurable stakeholder response. This can be in the form of an order, a request for a catalog, attending a promotional event and in other forms. Firms using direct marketing, thus determine which of the persons to whom advertising messages were sent, in what form they reacted to them, in accordance with this reaction, a dialogue develops. Interested parties receive additional information material or an order proposal. Clients are awarded loyalty bonuses, small rewards or birthday greetings, etc.
Direct marketing tools: direct mail, faxing, e-mailing, courier delivery, telemarketing. Using direct marketing tools, you can measure the reaction of customers to offers, as well as detect efficiently working or, conversely, non-working mechanisms. This will increase the return on the events and spend the funds allocated for them with the greatest benefit.
Unlike mass communications, direct marketing is the most controlled tool. Using it in your practice, you can completely control the costs of any stage of a complex campaign or when using separate direct marketing tools.
Direct marketing provides ample opportunities for marketing and creative experiments, since the flexibility of each of its tools allows you to unlimitedly vary and change the methods and forms of contacting customers at different stages of the DM campaign. At the same time, the tracking of the most effective offers and the time of their direction to the target audience are controlled. Thus, direct marketing makes it possible to accurately calculate the results of ongoing events.
Any direct marketing tool is aimed at ensuring that advertising information is not received by a random person, since one of the main tasks of direct marketing is to establish direct communication only with representatives of the target audience. Establishing effective feedback will help minimize financial risks by knowing exactly how customers respond to offers.
Direct marketing allows you to better meet customer needs by improving the quality of services. Direct acquaintance with customers allows you to find out their motivation in purchasing certain goods and needs, which makes it possible to interest them in individual offers. And developing relationships on a long-term basis will help to increase customer loyalty.
Thus, direct marketing is an effective way of attracting and retaining customers and allows you to build such communications with consumers when the product is ideal for them and "sells itself".
In many markets, the number of potential customers is not growing all the time, so retaining customers and fostering loyalty in them is essential.
Benefits of direct marketing:
- geographic selectivity;
- the possibility of guaranteed delivery of an advertising message;
- a wide range of two-way communication formats (mail, telephone, fax, e-mail, etc.);
- more flexible marketing options;
- greater efficiency compared to other types of marketing and advertising;
- the ability to solve several tasks at the same time (for example: maintaining the image of the product and simultaneously stimulating sales);
- transparency and the ability to analyze the result;
- creation of a database of potential customers;
- the ability to contact consumers again and again.
Unlike advertising in the media, DM technologies are a more personalized form of addressing a customer. DM can also be used as an independent advertising medium, and as a means of supporting advertising campaigns in the media, to improve the effectiveness of other types of advertising.
The effectiveness of DM far exceeds the effectiveness of advertising. Maximum efficiency is achieved in the case of a full-fledged DM campaign. In the case of a one-stage promotion, the results may disappoint the customer, who expects a large number of responses.
As for the shortcomings of the DM, they, as a rule, lie not in the technologies themselves, but in the quality of the execution of the DM campaign itself: lack of professional creativity, poor planning, poor-quality message delivery, etc.
Direct marketing is different from other areas of activity such as advertising. Advertising deals with the masses, not individuals. Promotional events usually do not require a direct response, but they are set to influence the customer's mood so that when they arrive at the store, they choose a certain brand.
Promotional promotions are usually aimed at stimulating the buyer at the point of sale. They often use the same techniques as direct marketing. In these cases, it is possible to create a database. However, almost no attempt is made to use the full potential of such databases to establish long-term customer relationships.
Public relations campaigns deal with the media, their purpose is to create a favorable opinion. It is also possible to create databases here, for example replies to editorial articles, which can be of very good quality.
Product awareness campaigns can also improve people's opinion of your product, convince them, make an offer - and collect information for the database in a reasonably cheap way.
2. Goals of direct marketing.
Today, there are four major goals that you can achieve using direct marketing.
Goal 1: filtering stakeholders from a large target group.
This is currently being done in a variety of ways. With the help of a coupon ad or an attachment to a magazine or newspaper, you single out from all the readers of these publications the target group that is interested in your offer. For the same purposes, advertisements on radio and television with the indication of the company's phone number, advertising messages, the "Online" network, etc. can be used.
Goal 2: turning stakeholders into customers.
This will be more accurate and inclusive than ad posting.
Goal 3: acquisition of new customers.
You can often acquire new customers in a non-stakeholder way. This happens primarily when your proposal provokes a spontaneous reaction. This reaction is encountered not only in the case of low prices. Target groups with high purchasing power also show spontaneous willingness to take advantage of your offer when it comes to exclusive, expensive goods and services.
Goal 4: customer retention and further development relationship with them.
Retaining a customer is ten times cheaper than acquiring a new one. Therefore, in this case, the money will be well invested. Examples of attraction:
Congratulate the customer on a new purchase.
Offer him a special service.
Create a program for multiple users of your products.
Inform the client about the upcoming arrival of new items.
Send him suggestions regularly.
Send your client your designated newspaper.
To congratulate him on his name day and his birthday.
Show the client tokens of gratitude for loyalty to the company for 5, 10, 20 years (flowers, thank you address, small gift, “certificate of loyalty”, etc.).
Finding and attaching a client to oneself is one of the main goals of every company. Therefore, in your mailbox you will find not only mailboxes, but also postal items from firms and institutions.
3. Complex direct campaign.
A comprehensive DM campaign is the pinnacle of direct marketing. It concentrates in itself all the advantages of individual services (direct mail, databases, telemarketing, courier service, fax, e-mail) and is a mechanism unique in its effect and flexibility. At the same time, the DM campaign is not just the sum of all the listed direct marketing tools. It gives you the opportunity to successfully build effective marketing communications with your clients, which means that you can solve the tasks that you face.
A comprehensive DM campaign involves a set of tools, each of which can and should be used in the right combination with others. One of the most important advantages of direct marketing is the ability to almost endlessly change your messages to the target audience and accurately measure the response using these tools.
For a successful and effective DM campaign, there are essential points to keep in mind:
1. The greatest negative on the part of the consumer is incompetence;
2. First of all, serve your regular customers, as you can get 10 times more responses from them;
3. Do not send advertising messages to the addresses of persons who have shown interest in your products, too often, if this is not economically justified;
4. Focus on the tastes of the target audience, and not on your own;
5. Do not rely on the fact that the consumer himself will understand the logic of placing the advertising text;
6. Spend more time on the details, since when conducting a DM campaign, you need to go through a huge number of stages, which means there are just as many chances to ruin the campaign.
The art of running a comprehensive DM campaign lies in the optimal combination of different direct marketing methods. Successful achievement of your business goals is based on consistency, degree of use, and creative solutions for all direct marketing tools. Only a verified and carefully planned DM campaign will help achieve the desired result.
To win over a consumer, you need to know as much as possible about him. Only personal contact will give you the maximum information about a potential client, but in order to establish it you will need to apply a number of direct marketing mechanisms.
Using databases in a comprehensive DM campaign will identify your target audience, which will help with your marketing research. Databases are necessary to address offers directly to those customers who are most interested in your services or products.
Stages of the DM campaign:
1. Determination of the target audience
2. Development of an address database
3. Developing a reason for contact
4. Preparation and design of an advertising message
5. Distribution of the advertising message
6. Processing responses to advertising messages
7. Stimulation of responses to advertising messages
8. Refinement of the database
Each stage of the DM campaign is essential. Only the third stage (development of a reason for contact) requires the most creative approach that will ensure the final result. The rest of the stages require a high-quality and professional approach. When using DM, companies are better off turning to professional DM agencies with proven technology and experience in DM campaigns. For example, it is important to pay attention to whether the agency is working with opinion leaders, which is especially important when campaigning in a professional environment (for example: healthcare professionals).
4. Direct marketing as a means of modern marketing.
It's not a secret for anyone that today direct marketing has reached the peak of its popularity abroad. And no one doubts that he will be at this peak for a long time.
In Russia, the dynamics of EBM development is generally positive, although the pace is slightly lower than in the West. If a few years ago, mostly only large campaigns used direct marketing quite regularly in their work, now the trend has changed.
Probably the problem was that marketing used to be far less expensive, and most executives did not understand the essence of EBM. In DM, the longer you "huddle" the client, the better the result - durability and trust. Many were unprepared for such long-term campaigns. Give us the result the first time and to the maximum, but this does not happen.
A few years ago, unfortunately, this was the standard situation. Most of the campaigns that decided to try direct marketing ended up limiting themselves to a bunch of 200 emails and counting on good results. The phrase sounded: "Everything that you offer is of course wonderful, but first we will try a little bit, and then ....".
This is the most common of the pitfalls of direct marketing - in most cases, conducting a one-stage promotion, the Customer, tempted by the words about the effectiveness of direct marketing, expects an unrealistic number of responses.
Indeed, the effectiveness of DM is much higher than the effectiveness of advertising and can even be 50% - this figure is achieved in the case of a full-fledged direct marketing advertising campaign.
In a one-stage DM campaign, the average response rate is about 3%. However, depending on the proposed product, the form of the offer, the target group, the value of the quota ranges from 0.1 to 10%.
I am very glad that the situation has begun to change. Many firms are starting to use DM again after reevaluating their first negative experiences. Competition is becoming more and more fierce, and the flow of information is more powerful. Customers are more attracted to products made primarily taking into account their individual needs. This is what direct marketing is all about.
In modern advertising campaigns, DM occupies an important place due to two main functionalities: on the one hand, it can be used to form and maintain the image of the advertised product (service), on the other hand, when using it, the establishment of a relationship with the client (feedback) is achieved, which allows you to analyze and make adjustments when planning your next campaigns.
Direct - marketingCoursework \u003e\u003e Marketing
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V.V. A. V. Naumova Saliy Fragment from the monograph "Relationship Marketing"
Direct marketing in the complex of marketing communications
Direct marketing is integral part relationship marketing, not a form of mass advertising for consumer products. It differs significantly from other marketing tools: communications.
First, those organizations that use direct marketing look directly to customers to distribute products, rather than to resellers and retailers. Some direct marketing companies have stores retailbut these outlets make up only a small part of their business.
Second, communications in the form of direct marketing are designed to provoke feedback, not just advertise a product or enhance a company's image. Advertising of Kirieshki crackers or computers does not aim to cause immediate changes in customer behavior. In contrast, direct marketing communication usually uses direct response advertising (direct advertising), i.e. advertising designed to motivate consumers to respond quickly - by ordering or requesting more information.
In addition, direct response advertising communicates directly with the consumer through dedicated communication media rather than through the media. Examples of such media include direct mail advertising, directory advertising, telephone advertising, direct response television advertising, e-mail, and the use of computer communications as a communication channel.
Direct marketing ideas are not new. It is believed that Benjamin Franklin created the first American direct trade directory. The catalog was published in 1744 and offered scientific books and textbooks. The direct trading era began with the publication of the Montgomery Word catalog in 1872. The industry has grown steadily over the past 50 years, yet the 21st century is destined to be the century of direct marketing and direct response advertising.
This is facilitated not only by new technologies, the Internet and interactive television, but also by traditional media, which are increasingly using direct response methods. Many national companies use toll-free telephone lines (starting with federal code 800) not only to receive orders, but also to provide customers with information about the location of the nearest retail stores or detailed information about the product. Television shops, for which entire channels are allocated on cable television, and video recordings allow consumers to see the product "live", and, if desired, order it immediately. In the future, we can expect the emergence of various, innovative forms of interactive communication with potential buyers.
One of the reasons for such popularity is the high flexibility of this method of promotion and trade, the ability not only to send a message about yourself and your products, but also to enter into communication, to receive feedback, which is defining in relationship marketing. For example, direct marketing can be used to generate catalog or mail order orders, it can create future prospects for sales representatives or promotional events, it can attract people to offices and retail stores where the deal will be made - for example, to car dealerships. This type of interaction is especially relevant for manufacturing enterprises, for which the target market is not massive, but consists of several disjoint segments with various characteristics and differently making purchasing decisions.
Direct marketing gravitates towards specific communication channels. In the first place in the world in terms of direct marketing costs is interactive marketing (or email marketing to databases), then telephone marketing (offering products by phone), followed by direct mail, television (telemarketing) and only last - mass media. According to experts, the total volume of direct sales through direct channels over the next decade will increase by more than 25-30%.
The first place to start is to consider the essence of the question regarding the definitions of direct marketing and direct response advertising. Direct marketing is an interactive marketing communications tool that uses one or more media to disseminate information about a company to receive a measurable response and / or close a deal, regardless of where the message is from and where the recipient is. Direct response advertising is one of the direct marketing tools aimed at a group of purchase decision makers.
The basis of direct marketing is a database - a consumer card index. The intended response of direct marketing communication is a direct response or purchase of a product. If the addressee of mass advertising is impersonal, then the addressee of direct marketing is always a specific person or group of people making a purchase decision.
We will adhere to the following position: for mass marketing, we use the term "mass advertising", and for direct marketing, we use the term "direct response advertising".
The planned response of the direct response advertising communication is the possibility of feedback: a request for additional information, a response in the form of ordering a catalog or technical description and a purchase order. But the actual purchase of the product itself is done with the help of the salespeople, not with the help of the advertising specialist. In other words, direct marketing as a process involves selling a product, but direct response advertising does not.
The main promotion tool in direct marketing is all types of direct sales and direct response advertising, publications in specialized industry publications; however, personal selling, telemarketing and the Internet play a much more important role here than in consumer product marketing. This situation is associated with the concept of relationship marketing, in which communications are considered not from the standpoint of promoting goods and services, but from the standpoint of interaction with consumers in order to sell their goods and services. This approach is focused on communication with feedback, which is why in relationship marketing such a significant role is given not to advertising and public relations, but to sales promotion and direct marketing.
Direct marketing companies keep a close eye on whether the marketing proposal matches the needs of a narrow segment of consumers or an individual buyer. Many companies, using direct marketing, focus primarily on the conclusion of individual transactions. Recently, however, more and more companies are turning to direct marketing in order to achieve not only more effective targeting of consumers, but also to create stronger, long-term and individualized relationships with them.
According to most experts, the transition from mass marketing to individual marketing is associated with changes in the household, with the appearance of technologically complex products, new ways of making purchases and paying for them, with intense competition, with the development of additional distribution channels and new information technologies.
D. Peppers and M. Rogers highlight the following main differences between mass marketing and what they call “one-to-one” marketing, tab. 1.
Table 1. Differences between mass and personal marketing
|
Mass marketing |
Individual marketing |
|
Average shopper |
Individual buyer |
|
Buyer anonymity |
Customer focus |
|
Standardized item |
Individual market offer |
|
Mass production |
Customized production |
|
Mass distribution of goods |
Individual distribution |
|
Mass product promotion |
Create individual purchase incentives |
|
Unidirectional product message |
Ability to establish feedback |
|
Emphasis on scale |
Focus on depth of coverage |
|
Reaching all buyers |
Reaching profitable buyers |
|
Market share |
Share among buyers |
|
Attracting buyers |
Customer retention |
Today, direct marketing has reached the peak of its popularity abroad. And no one doubts that he will be at this peak for a long time. In Russia, the dynamics of direct marketing development is generally positive, although the pace is much lower than in the West. If several years ago mainly only large companies used direct marketing quite regularly in their work, now the trend has changed.
Direct marketing can be viewed in two main aspects: on the one hand, it is a means of establishing planned long-term relationships with a customer, on the other hand, it is the direct implementation of sales operations. The definition of direct marketing is based on five key points.
1. Direct marketing is an interactive system, i.e. a prospect and a salesperson can enter into a two-way communication. For example, a company might send out a catalog for mail-order orders; the customer can respond by calling for additional information, clarification of problems or ordering.
2. As part of two-way communications, direct marketing always offers the consumer a means of feedback. Since the answer is possible, the number and characteristics of those who do not provide an answer are also of great importance for planning.
3. Direct marketing can be used anytime, anywhere. Feedback does not require a retail store or salesperson. The order can be placed at any convenient time of the day or night and can be delivered to the buyer so that he will not have to leave the house.
4. Direct marketing must have a measurable answer - whoever uses direct marketing must accurately calculate the costs of applying this strategy and the final income. The obtained quantitative result demonstrates the primary benefits of direct marketing and, undoubtedly, is the reason for its growth in popularity.
5. Direct marketing requires a database with customer information. With this information, a direct marketing salesperson can design communications targeting prospective individual or corporate clients... Information also enables sellers to offer their customers specific benefits: convenience, efficiency and time savings.
Let's list the advantages and disadvantages of direct marketing.
Direct marketing has the following strengths:
It is more targeted than other forms of marketing communications;
Has the ability for a personalized approach;
Its results are measurable;
All elements of the direct marketing complex are verifiable;
All elements are extremely flexible.
Direct marketing also has some weaknesses:
Ineffective if used as a short term strategy;
Poorly conducted direct marketing creates distrust in the company and undermines its image;
Failure to coordinate direct marketing with the firm's activities, distribution of goods or corporate strategy can lead to a decrease in customer loyalty;
Direct marketing messages may conflict with other marketing communications messages.
The rapid pace of development of direct marketing is due to its communication characteristics:
1) the linear nature of communication in the relationship "seller-buyer"; unlike other main means of marketing communications, which are characterized by mass communication, direct marketing as a type of communication has a direct character;
2) targeting and focusing. Direct marketing tools make it possible to clearly distinguish from the entire mass of recipients that target audience in whose attention the communicator is interested;
3) an interactive communication mode "seller-buyer": the recipient's response is not broken in time with the receipt of the appeal. It is almost instantaneous, and the measurability of the direct marketing communication effect is higher compared to mass advertising. This leads to its greater controllability and allows flexible adaptation to the needs of the recipient;
4) purchase of additional amenities - both by the recipient and the communicator. The recipient is given the opportunity to completely shift the functions of delivering the selected product directly to his home or office;
5) relatively high cost per contact.
Among the main communication goals achieved through direct marketing are:
Attracting the attention of the recipient;
Retention of the consumer in the sphere of influence of the communicator;
Development of a long-term relationship with the recipient;
Stimulating the act of buying and creating the prerequisites for repeat purchases;
In some cases, the study of the consumer's reaction to a particular product.
The direct marketing planning process is inherently the same as the marketing communications planning process in general. However, planning a direct marketing campaign has a certain specificity, since the primary tasks are relationships with potential customers and sales. Another feature of planning is the use of high-quality databases rather than mass media as information carriers.
The following stages can be named as one of the variants of the algorithm for planning and carrying out a traditional direct marketing campaign.
1. Formation of campaign goals, which are determined by the marketing goals of the organization and its communication policy. Objectives should be formulated in terms of quantitative and qualitative indicators. In industrial markets, the main goals of a direct marketing promotion campaign are:
Creation of awareness - priority of rational information over emotional, priority of rational logic and motivation;
Creation of understanding - the consumer should be aware of all the functions of the product, about its advantages, advantages over other similar ones and about the disadvantages associated with design features or difficulties during operation;
Effective reminder - the ability to receive additional information about the goods and the company itself in the purchasing decision-making process, which can last from one month to one year;
Open paths - the availability of information should be supported by the ability to see, try the evaluated product in operation, be able to read the reviews of those who have already purchased this product, etc.
2. Determination of the target audience to which the appeal will be addressed.
3. The choice of communication channels for the transmission of the appeal. Within the framework of the ongoing direct marketing campaign, several means of communication can be used at different stages. At the stage of forming the information field about goods and services, non-personal communication channels can be used, at the stage of forming relationships, e-mail can be used, and at the stage of forming the motivational field, a telephone can be used.
4. Determining the budget of the direct marketing campaign.
5. Formation of an address database in which the target audience will be most fully and reliably represented.
6. Development of a communication concept - determining the degree of personalization of the message, choosing the tone and style of communication, developing the main idea that will form the basis of the campaign.
7. Development of a plan of related activities.
8. Conducting campaign activities.
9. Analysis of the effectiveness of the campaign.
At each stage, a situation is possible when the correct choice of one or another aspect of the direct marketing campaign will require marketing research. A feature of marketing research for direct marketing purposes is the collection, analysis and replenishment of the database. The basis of such research is secondary marketing information.
Types of direct marketing
The main types of direct marketing include:
Personal (personal) sales - direct interaction with one or more potential buyers in order to organize presentations, answer questions, receive orders and complete a transaction;
Direct marketing by mail (direct mail) - includes mailing letters (addressed or unaddressed), advertising materials, brochures and other advertising messages to potential buyers at addresses from mailing lists or by e-mail (direct mail) with an attachment of the order form or an envelope for a reply;
Sales by catalogs (catalog marketing) - the use of catalogs of goods sent to customers by mail, sold in stores or presented at exhibitions and fairs;
Telephone marketing (telephone marketing) - using the telephone as a tool for direct selling goods to customers;
Direct response television marketing (telemarketing) - marketing of goods and services through advertising television (or radio) programs using feedback elements (usually a phone number on the screen);
Interactive (online) marketing - direct marketing carried out through interactive computer communication services in real time.
In direct marketing, the key to success is detailed information about the individual consumer. Modern enterprises create special databases about customers, which are an array of detailed information about individual (potential) customers, including geographic, demographic, psychographic characteristics, as well as data on the characteristics of purchasing behavior. Such databases are used to search for potential buyers, modify or develop products according to their specific needs and to maintain a relationship with them.
Direct mail (direct-mail) in translation into Russian means direct mail. Within the framework of this form of communication, the communicator most often addresses the addressee with a written message sent by mail (address delivery, address distribution, e-mail). If direct mail has certain similarities with advertising, it is attributed to direct marketing due to the existence of two fundamentally important communication characteristics: direct, direct nature of communication and personal nature of the message (in advertising - impersonal).
All other things being equal, the effectiveness of direct mail campaigns is significantly higher than when using advertising media. Accurate measurement capabilities economic effect direct mail communication is also much broader than the definition of advertising effectiveness. Most often and most effectively, direct mail is used to sell licenses, technology, books, new clothes, gourmet food, magazine subscriptions, insurance, and various services.
The huge advantage of direct mail is that it can be used as a market research tool. For this, mail questionnaires are sent out in order to obtain the necessary information, the collection of which would otherwise require a lot of financial and time costs.
Direct mail can take the form of direct response advertising. An important advantage of direct response advertising (sometimes called direct mail advertising) is the ability to use it in cases where the advertiser wants to study the demand for their product on a limited scale without a large advertising campaign. Turning to a certain circle of consumers, he only wants to feel the pulse of the market, and only then make a decision to expand the production (sale) of goods and deploy an advertising campaign.
Comparing direct mail with advertisements in newspapers and magazines, it should be noted that with daily reading of printed publications, the reader is unable to concentrate only on a certain ad, his attention is scattered. The viewer has no choice, he watches what is being shown to him at that moment, and cannot watch all programs in a row. Direct mail does not have a distracting information background inherent in other means of disseminating information.
While many types of advertising simply direct the consumer to a store where he can see and purchase the product, direct mail advertising convinces the consumer to buy without first knowing the product. Direct mail provides more complete and more versatile information, while providing a close and direct connection with a potential consumer.
In addition to the listed advantages, mailing list as a direct marketing tool has the following advantages:
Selectivity;
Confidentiality;
Speed \u200b\u200bof execution.
Direct mail packaging. Everything that makes up a direct mail design must be harmonious. The packaging should be different from the rest of the mail, encourage the recipient to open it, and should reflect the overall design concept.
The classic design of a direct mail package consists of a postal envelope, a letter, a handout, a response medium, and a return medium.
1. Mail envelope. The direct mail sales process starts with a mailing envelope. Enticing text (eg, “important, don't delay!”) Is often used to pique consumer interest and get them to open the envelope.
2. Letter. The letter itself should be personal, appeal to the consumer's personal interest and arouse interest.
3. Prospectus. The brochure gives details of the product: specification, color, prices, photographs, guarantees and signatures. It represents the primary sales message and can be in the form of a booklet, large sheets of text (large attachment or large folder), brochure, flyer, or a separate sheet.
4. Means of answer. The answering tool is an order form, often containing a toll-free number. This should summarize the main points of the sale offer in an easy to read and complete form.
5. Means of return. This facility allows the buyer to send back the necessary information. It can be an information request form, an order form or a payment.
Drafting the text of direct mail advertising. To write good copy, a direct mail copywriter needs reliable information about the manufacturer, buyer, and competitors. Good copy translates sales proposals into terms of value, emphasizes customer satisfaction, and uses crisp, clear language. The proposal must be made immediately and attractively. Moreover, the writer must convince the consumer that the promised will certainly be fulfilled. Finally, good writing makes it easier to take the desired action. The requested action should be simple, specific and immediate.
They forget to include a letter in the offer;
Lack of consistency in identification - the inscription looks different on the envelope and in the mail;
No distinctive features on the outside of the postal item;
No guarantees are given;
No personal letter from the owner in the newsletter or catalog;
Too many messages;
Colors or graphics are incorrect;
The main proposal is not striking;
There are too many headlines.
The large amount of text space available in direct response advertising as compared to print media is both a temptation and an opportunity. There is a tendency to include excess material and overly creative forms. But the job of such advertising is to sell, not impress. Every word and picture should contribute to this task. The direct mail program should often be modified for effective communication depending on different target audiences.
Catalog marketing is a direct marketing method using product catalogs sent to customers by mail or sold in stores. Catalogs are multi-page brochures with product photos and prices. This approach is being revised, and videos, CDs, and Internet catalogs are more often used as carriers of commercial information. The expected feedback from the recipient is an appeal to the seller by phone or a delay to the address indicated by the sender of a written order for the goods placed in the catalog. The catalog can be considered placement in periodicals different focus order coupons for a specific product.
To successfully receive orders from customers, managers need accurate, up-to-date customer lists. Ideally, these lists should include only those who are potentially willing to purchase. For example, internal lists may contain information such as how customers paid for a purchase, where they live, what the purchase was, how long they were customers of the firm, and when they made their last purchase. External lists can be subdivided into several types: prefabricated lists, request lists, lists of potential buyers, fig. 1.
Bundled lists identify people with common interests, such as skiing, home renovation, or the art of cooking. Request lists or customer lists from other companies are provided by both competing and non-competing companies. Each of these categories can be further detailed until the seller identifies just one characteristic, such as income or having pets. Lists of potential buyers are formed according to existing or purchased databases, which can be bought from fitness clubs, beauty salons, etc.
Telephone marketing involves establishing contact between the communicator and the addressee through the telephone. The communicative characteristics of this type of marketing are similar to those of personal sales. This form of direct marketing is especially effective for establishing initial contact as a preliminary stage, "preparing a springboard" for the use of personal sales techniques, sending to the addressee of a sales agent. Telephone marketing allows you to solve a number of problems:
Provides information about potential customers, which is necessary when planning an advertising campaign;
Provides information from respondents that serves as the basis for future communication strategy;
Conducts market research, using consumer surveys in order to find out their opinion about products, the company or the attractiveness of discounts and incentives offered in sales;
Allows you to directly learn about the advantages and disadvantages of service, their concerns and risks;
Allows you to get additional information necessary for the formation of printed advertising messages for direct marketing events.
Direct response telemarketing, sometimes referred to as the “couch shop”, is becoming increasingly popular in Russia for promoting home goods: household appliances, new goods made using unique technologies.
In its simplest form, one of the television channels broadcasts short (5-10-minute) programs dedicated to specific goods. The buyer declares his intention to purchase the advertised product by calling the telephones indicated during the broadcast. If a call and a purchase order are made immediately after the broadcast of the story, then the buyer is provided with a gift, which, as a rule, is a necessary attribute of the advertised product. For example, when advertising inflatable sofas, pumps are offered for those sofas.
A relatively new and rapidly developing form of direct marketing today is interactive marketing and e-commerce. Interactive marketing has gained such popularity due to the fact that it offers certain opportunities to consumers and companies, table. 2.
Table 2. Benefits and opportunities of interactive marketing
|
Benefits and opportunities for consumers |
Benefits and opportunities for companies |
|
Get more complete information on companies and products |
Fast adjustment to market conditions. For example, instant change in price and product descriptions |
|
Speed \u200b\u200band convenience when making a purchase (order) |
Reduced costs. Compared to traditional forms of direct marketing: low cost of updating information, conducting transactions, personalizing information, delivering messages, expanding the audience, providing information, ensuring a high density of information flow |
|
Leveling the emotion factor. No need to meet face to face with the salesperson and be exposed to emotional and persuasive factors |
Building relationships. Provides the ability to analyze customer responses, receive additional information, provide advice, send various promotional materials and even carry out maintenance of some products (for example, updating or fixing software products, databases) |
The advantages of interactive marketing should also include:
The possibility of its application both by large organizations and by medium and small, serving market niches and offering their goods and services to a narrow segment of consumers;
Almost unlimited electronic (as opposed to, for example, print) advertising space;
Fairly fast access and copying of information;
Generally, confidentiality and speed of electronic purchases.
In addition to the advantages, modern interactive marketing has some disadvantages:
Limited access to buyers and, consequently, the volume of purchases;
Some one-sided demographic and psychographic information about customers;
Chaos and information overload in global networks.
When planning and implementing a direct marketing campaign, its effectiveness should be checked before the campaign starts (the effectiveness of requests for perception, memorability and recognition) and after it (the number of responses and purchases).
Evaluation of the effectiveness of the perception of references is called a pretest and is carried out using such a method of marketing research as focus groups. During one focus group, you can solve several research problems:
Find out the level of publicity of the company and the identification of its business;
The degree of assimilation of information;
The level of information retention.
The focus group helps to figure out ways to improve the communication message before it is sent and thus increase its effectiveness. In the case when there are two or more alternatives, the sample makes it possible to choose the priority one.
The contact audience method is one of the methods for assessing the effectiveness of a direct marketing campaign. This method is implemented in practice on the basis of accurate counting of calls and requests received after receiving the request. The organization should clearly organize the work of dispatchers who register:
Number of responses;
Their character;
The source of this information.
As a result, the cost-effectiveness will be a calculation based on the ratio of all sent messages to the number of responses, the size of the contact audience, the number of transactions or purchases.
Advertising for business organizations
The direct oral appeal of the seller to a potential buyer preceded chronologically all other forms of commercial communication. In modern conditions, this type of formation of connections with target audiences is defined as direct marketing. Direct response advertising can build customer loyalty, identify and attract new customers, deliver better customer information faster, and increase a company's bottom line.
Let's give a definition of direct response advertising (direct advertising). Direct response advertising is impersonal communication with a specific addressee, expressed in direct contact with the aim of selling and developing long-term relationships with customers, as well as ensuring continued business success.
Other experts define direct advertising as any activity aimed at obtaining consumer response: either in the form of a direct order for a product and service, or in the form of a request for further information. The ideal response of communication as a result of direct advertising is the direct purchase of a product; such a communication result could be called the “ideal final result”, as is customary in the Theory of Inventive Problem Solving by G.S. Alyshuller.
Thus, direct response advertising can be considered in two main aspects: on the one hand, it is a means of establishing planned relationships with a buyer, on the other hand, it is an indirect implementation of sales operations, provision of the necessary pre-sales service, etc. The latter approach allows us to consider such advertising as one of the forms of direct marketing (zero-level distribution channel).
Advertising for industrial goods (direct response advertising, business advertising, business advertising) is one of the fastest growing categories of advertising. Ordinary consumers only see the tip of the advertising iceberg. The rest - and a very important part of it - consists of advertising messages for wholesalers, retailers, insurance, construction organizations and other members of various levels of marketing channels.
Business advertising and related advertising campaigns require very different positioning strategies and media selection than consumer advertising. The distribution of the load between various channels of information transmission has a significantly different character here.
The main function of advertising is to convey information to a certain circle of people (target audience) and provide feedback to consumers, which is what relationship marketing is focused on. Besides main function advertising also performs a number of additional ones, among which the popular function of motivating to make a purchase through the use of sales promotion offers and the provision of certain benefits when making a purchase in advertising certain period time.
The essential difference between consumer and business ad campaigns is the type of messages used. Of course, any advertising should attract attention and arouse interest, however, advertising for industrial goods is based mainly on facts and contains much less emotional elements and motives. These messages are targeted not only at specific industries, but often at specific people within the industry. In addition, the main idea of \u200b\u200bbusiness advertising is most often the acquisition of benefits (reducing equipment downtime, reducing customer complaints, saving time and money, increasing overall effectiveness business).
Among the main communication goals achieved through direct response advertising are:
Formation of the information field in the business environment;
Increased interest in the company and its products;
Development of long-term relationships based on trust and loyalty;
Promotion of the purchase act based on an individual incentive offer;
Study of the consumer's reaction to a particular product (the ability to directly obtain valuable marketing information).
Business advertising needs to take into account significant differences in the purchasing process (versus purchasing consumer products). The factors that have the greatest influence on the purchase of industrial goods also influence this type of advertising, as shown in Fig. 2.
Figure: 2. Factors of influence on direct response advertising for business organizations
1. Participants in the procurement. Business procurement decisions are usually made by groups of people - employees from different departments of the enterprise. They have different views and experiences, so for a successful deal closing, the seller must take into account the differences in the interests of the participants in the procurement process and reflect these differences in the advertising message.
2. Purchasing cycles. Impulse buying and the business market are incompatible concepts. Most companies have formalized procedures for any more or less significant acquisitions. The length of the procurement cycle can range from a few weeks to several months, especially when a significant investment is required. With long cycles, advertising is usually accompanied by active personal sales and direct response techniques.
3. Scale of purchases. Typically, business markets have much less opportunity to sell a product than in the case of consumer products. Hence, the average time and costs for closing a deal are much higher. In addition, many of the ways to connect and connect with an audience in direct response advertising are not applicable. While the main characteristics of consumer advertising are audience reach and frequency of release, then in business markets most of the indicators are related to sales.
The listed factors relate to the enterprise, but a number of other factors can create advertising through the use of certain means of influencing the target audience or the person making a purchase decision. Let's list these factors:
Competitive advantage factors that can be emphasized and highlighted in the advertising message;
Motivation factors (rational motives prevail over emotional motives in business advertising);
Availability of a sales promotion proposal indicating the validity period of this proposal;
Figure: 3. Categories of direct response ads
Trade advertising is used by manufacturers to sell goods and services to wholesalers and retailers. In addition, it can be used to advertise products and services that retailers need to run their business ( trade software, cash registers, cleaning of premises, etc.). Commercial advertising has several goals.
1. Expansion of distribution. Manufacturers are interested in increasing the number of stores in which their brands are represented.
2. Additional support from merchants. Manufacturers compete with a myriad of other brands for shelf space and dealer support. Trade advertising can encourage merchants to better place a brand in a store or use advertising structures supplier.
3. Announcement on stimulating demand. Many messages contain information about upcoming promotions to stimulate consumer demand. By doing this, manufacturers demonstrate to traders that they support their brands.
Industry advertising. The manufacturer himself is the buyer of tooling, raw materials, materials and components used to manufacture his products. Supplier companies are most likely to advertise in trade publications, direct mail, telemarketing, and personal selling. This industry advertising is very different from consumer advertising. Industry advertising is addressed to a highly specialized and relatively small audience.
Industrial advertising aims to promote sophisticated production equipment. Buying production equipment is a complex process that requires the participation of several specialists. Advertising here is most often used as a means of displaying a product or to create awareness of trade mark, to facilitate sales representatives negotiating and helping to increase the likelihood of a successful deal.
Whereas typical manufacturer As a consumer product with potentially millions of potential customers, an industrial advertiser can count their consumers on one hand. Sellers of heavy machinery and other manufacturing products want to get the most out of their limited trading opportunities. Typically, few large companies purchase large quantities of manufactured goods and do so frequently.
It is quite clear that in this environment, sellers of manufactured goods will use a number of highly targeted methods, including relevant industry publications, direct mail, telemarketing and personal selling. Purchasing industrial equipment is usually a complex process involving a number of decision makers from manufacturers. Industrial advertising is usually a vehicle for product introduction or brand awareness to establish the basis for sales reps' follow-up calls.
Industrial advertising is not only aimed at a very specialized and relatively small audience, but its tone is significantly different from consumer advertising. Industrial advertising texts are written for experts, often including specifications and details that only professionals in a particular industry can understand.
Database management
Database marketing is the process of creating, using, maintaining customer databases and other databases (about products, distributors, sales, etc.) for the purpose of conducting sales transactions and establishing relationships with customers. Companies use both separate forms of direct marketing and integrated direct marketing, which includes a full range (set) of its tools.
The database is the essence of direct marketing. The database contains information about buyers and prospective clients; it has been formed over a considerable period of time. Database marketing is the process of creating, maintaining and using customer databases for the purposes of customer contact and business.
Companies can build their databases from internal and external sources, or use a combination of internal and external means. Internal, or home, databases are created from customer profiles, credit card information, or information cards filled out by customers at points of sale. An internal approach is cost effective as long as the company only uses its expertise or resources.
Many companies lack the experience and resources to develop home database systems. They can acquire commercial databases from firms whose only job is to collect, analyze, categorize, and categorize a vast array of customer data. Based on information such as income, education, occupation, and census data, such databases can describe the life of specific areas across the country with amazing accuracy.
One of the most difficult tasks in working with databases is maintaining and updating them. In such a situation, two approaches can be taken:
1. Maintaining the database by determining the customer value rating. Advertising specialists are constantly improving their databases by accumulating information about the value of the consumer - the recency, frequency and cost of purchases made by him. Other pertinent information required to maintain the databases includes the payment method for the purchase, where customers reside, what they buy, how long they have been customers of the company, and the date of their last purchase. Each company must consider its own needs when creating a database, taking into account the challenge of identifying the most profitable buyers and the most promising leads.
2. Building relationships based on the life values \u200b\u200bof consumers. Database marketing is most effective if it focuses on building relationships. In database marketing, the customer values \u200b\u200bapproach is the equivalent of relationship marketing. With this approach, it is assumed that new customer means not only an immediate sale, but also additional purchases during the period of time as long as the buyer remains a user of the product.
To build relationships, advertisers must carefully select the clients who are best suited to make a significant contribution to perfect sales and profit. Whenever necessary, they develop customer profiles to select similar buyers. For example, a company sells its products to retailers. This company must know how to meet the needs and desires of buyers better than other suppliers in the market. By doing research, a company can assess who is most likely to buy its products and how to maintain relationships with customers.
In general, value-based relationship building in direct response advertising works best when it is possible to monitor the response of the target market. In turn, the supplier offers significant individual benefits to assess the customer's readiness for feedback. The responses can then be measured. This approach requires product research, customer satisfaction surveys to obtain the personal information needed to make sure the target market has both the means and the motivation to respond.
Obtaining, systematizing and maintaining existing marketing data is carried out by purchasing ready-made specialized databases and based on the purchases made. The database management process is shown in Fig. 4.
Figure: 4. Database management
Companies buy or create a mailing list from companies in related business areas and continually update the basic information to match the current situation. The transformation of data into useful information that can be used in the implementation of the company's strategy is carried out by the specialist who is responsible for the databases. As a rule, this is one person in the company, and the information obtained during data transformation is private.
The strategy of an advertising campaign for direct response advertising based on the use of a database involves the planning of several stages of mailing with advertising messages of different impact. At the first stage, it is recommended to use a newsletter, at the second - an offer highlighting the competitive advantages of a product or product, at the third - advertising appeal with elements of sales promotion.
Obtaining a mailing list is the first step in creating a database. A mailing list is a list of customer or prospect names with their addresses, phone and fax numbers, and email addresses if available. This list does not contain any information regarding consumer behavior - what is called a buying story. The mailing list can be created from internal sources (for example, warranty cards), and purchased from specialized research companies or third parties. When those wishing to use direct marketing receive a list, managing the database system entails the following five steps.
1. Obtaining, organizing and maintaining existing marketing data. Companies buy or create a mailing list and continually update basic information to match the current situation.
2. Transforming data into useful information that can be used in the implementation of company strategy. Suppose Toyota maintains a database of detailed information on who owns vehicles. This year, the company hopes to increase sales of a new car model, the Camry. Toyota direct marketers can cull data from the database into a list of satisfied Toyota owners with more than 5 years of vehicles as the target market for the new model.
3. Using the database when implementing special strategies. The list of satisfied Camry owners can later be converted into a mailing list for a discounted direct mail program for a new car model.
4. Test results. Toyota could test direct mail advertising with selected customers for feedback. As a result, Camry sales figures would serve as a measure of success.
5. Collection of new data and their inclusion in the existing database. Buyers of a Camry model car can be interviewed six months after the purchase to assess their level of satisfaction and receive information about the specific moments of car operation.
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