Database Marketing and Direct Response M a rketing

1. Database Marketingand Direct Response Marketing Chapter – Eleven (11) Lecturer – MdShahedurRahman

2. Remember this !! • IMC program relies heavily on the employees who have the most interactions with customers. • These individuals are the faceof the company. • A positive experience may cause the buyer to provide positive WOM to as many as 6 other people, while a negative experience will result in another 11 people knowing about it.

3. Personal Selling

4. Personal Selling • The “last 3 feet” of marketing • A bond of partnership between a sales rep and a client is a valuable asset. • Personal selling can be classified into: • Retail sales • Selling in retail outlets • Selling services • Telemarketing • Business to Business selling

5. Retail Sales • Selling in retail outlets • Single transaction • Order-takers – only filling orders, or order taking and cashier • Selling services • Sales representatives – driving the relationship. Single, repeat or problem solving ( Insurance Selling ) • Selling and providing services – selling car oil and provide oil change service • Telemarketing • In-bound telemarketing • Out-bound telemarketing

6. Cross Selling • Cross-selling involves the marketing of other items following the purchase of a good or service • Banks selling insurance, loans and other financial solutions

7. Database Marketing

8. Database Marketing • Database development and database marketing programs are often used to supplement personal selling activities. • Database developmentrefers to the creation of a database to support the overall company, IMC program and the total marketing effort.

9. Database Marketing • Steps of developing such a database are: • Determine objectives • Collect data • Build the data warehouse • Mine data for information • Develop marketing programs • Evaluate marketing programs and data warehouses

10. Determining Objectives • What kinds of data are currently available? • When (or how often) will information be collected? • What additional data are needed? • Where will the data be located or stored? • Why do we need certain data and not other types? • How will the data be used and who will use it?

11. Typical Objectives for an IMC Database • Provide useful information about a firm’s customers • Create information about why customers purchase the products • Share information about customers with creatives as they prepare advertisements and promotional materials • Reveal contact points to be used in direct-marketing programs • Yield information about members of various buying centers in B2B operations • Track changes in purchasing behaviors and purchasing criteria used by customers

12. Collecting Data • Internal customer data – customers and survey data collected from customers • More than just name and address • Scanning technology allows us to track purchasing behavior of buyers • Helps marketing team identify and profile company’s best customers • Helps them develop ways to cross-sell and create profiles of prospects

13. Collecting Data • External data – psychographic, lifestyle, and attitudinal information • Secondary data like commercial database services • Information collected from channel members (wholesalers and retailers) • Government data sources

14. Building a Data Warehouse • Developing a useful data warehouse requires an understanding of all the various ways members of the organization might use data. • Some typical uses can be: • Targeting customers for a direct marketing program • Salespeople have access to important customer information while making sales calls • Giving the service department and customer relations department access to customer data as they deal with inquiries and complaints

15. Data Mining • Data mining usually has either of the following 2 approaches: • Building profiles of customer groups • Preparing models that predict future purchase behaviors based on past purchases

16. Developing Marketing Programs • Once the data have been mined for information, individual marketing programs can be designed • The data provides clues about the best approach for each customer group ( What appeal or message strategy to use ?)

17. A Quality database helps • Marketing team decide on types of sales promotions to be used • Advertising media to be selected • Type of information that will spark the interest of a particular group of customers

18. Evaluating Marketing Programs and Data Warehouses • A high-quality database will contain information about as many customers as possible, where each transaction will be recorded. • This allows for the analysis of various purchasing trends among customer groups and even individual customers.

19. Evaluating Marketing Programs and Data Warehouses • Questions to be answered can be like the following: • Do our customers know our overall theme and image? • Have we moved toward greater brand equity in the past year? • Which items are our customers most inclined to buy? • Which are not selling well? Do we know why? • Is our customer base changing? Is it because we have changed, or is it because the new group is better suited to our products?

20. Direct Marketing

21. Direct Marketing • Direct marketing is vending products to customers without the use of other channel members. • 60% of the direct marketing budget is used for prospecting • 40% is directed towards retaining current customers • Typical forms of direct marketing include: • Mail • Mail-order Catalogs • Mass Media – TV, radio, magazines and newspapers • Alternative Media

22. Mail

23. Catalogue

24. Mass Media

25. Alternative Media

26. Internet

27. Email

28. Permission Marketing • A relatively new form of direct marketing • Here, information is only sent to consumers who give the company permission to do so. • Can be offered on the internet, over phone, or through direct mail • Response rates tend to be higher, because consumers are receiving only marketing materials they have asked for

29. Permission Marketing • Steps to a successful permission marketing program are: • Obtain permission from customer • Offer the customer an ongoing curriculum that is meaningful • Reinforce the incentive to continue the relationship • Increase the level of permission • Leverage the permission to benefit both the parties

30. Customer Relationship Marketing

31. Customer Relationship Management • These programs are designed to build long-term loyalty and bonds with customers through the use of a personal touch facilitated by technology • CRM programs go beyond database management and regular selling tactics

33. CRM has 3 technological underpinnings: • Database technology, including the ability to analyze and map data • Interactivity through web sites, call centers, and other means of contacting customers • Mass customization technology, or the ability to customize a good or service to better meet a customer’s needs

34. Steps in Customer Relationship Management • Identify the firm’s customers – using standard data collection techniques and the firm’s database • Differentiate customers in terms of their needs and their value to the selling company • Lifetime value of the customer • Share of customer • Interact with customers in ways that improve the cost efficiency and the effectiveness of these contacts • Customize some aspects of the goods and services being offered to the customer

35. Instead of trying to find customers for the products you have got, you find new products for the customers you have already got. • Seth Godin