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Direct Marketing and the Web

Direct Marketing and the Web. Dr. Zahay. Thanks to Bob Stone’s and Jim Kobs books. Direct Marketers Flourish on Web. Land’s end third quarter revenue up 4% third quarter to third quarter, 376.1 million from 362.3

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Direct Marketing and the Web

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  1. Direct Marketing and the Web Dr. Zahay Thanks to Bob Stone’s and Jim Kobs books

  2. Direct Marketers Flourish on Web • Land’s end third quarter revenue up 4% third quarter to third quarter, 376.1 million from 362.3 • Jan Brandt, AOL’s marketing wizard, named Direct Marketer of the year, helped bring AOL to more than 30 million members • John Costello, Sears vet, is named global marketing officer for Yahoo, Inc. • 55 % of direct marketers engage in E-commerce are making profit, half of remaining expect to reach profitability in ‘02

  3. BUT, it has to be more than DM • BMW found that prospects who interact with the company on the web prior to purchase areas much as three times as likely to become buyers than prospects from other sources • Direct marketing can reach the prospect • Web site can help deliver the experience • Objective of web site can be to collect information, deliver experience

  4. Communication Interactive Comm. Mass comm. Direct Comm. Two way One way Conversation

  5. Direct Response Mechanisms Retain Attract. Acquire Two way One way Conversation

  6. An organized and planned system of contacts Using a variety of media Seeking to produce a lead or an order Developing and maintaining a database Measurable in cost and results Expandable with confidence (DMA) 1) the ability to address an individual 2) the ability to gather and remember a response of an individual 3) the ability to address that individual once more in a way that takes into account his or her unique response (Marketing=conversation) Deighton, 1996 Communication TrendDirect vs. Interactive

  7. What are the elements of direct marketing?

  8. The Offer • Should be a “call to action” • Should have a deadline, expiration time • Should require something from you and give you something in return • Types of calls to action • Give us your information, get additional information from us (“free gift” offers outpull other offers) • Give us some money by a certain time and we will send you an extra product • Give us your time and we will give you some useful information (“stickiness”)

  9. The List • All customers are not created equal, 80 percent of orders come from 20 percent of customers • Maximizing profits comes from the lists you use • Internet marketers have the ability to identify their customers and create lists • Enhancing lists with demographic or other information improves their effectiveness • Follow ups within 30 days produce 40-50% the first response • “House” lists outperform purchase lists

  10. The list is now a database • Predict trends: beer and Pampers • Discover unknown patterns: data mining • Market 1 to 1: Rogers and Peppers • Personalization: Marketing communications tailored to the customer (content personalization or personalized offers) • Customization: Product offerings tailored to the customer

  11. Media Used • Multiple media were always available (Oldsmobile ads) • mail, mail, mail • mail, call, mail • mail, email, call • Can drive responses to destination web site, “landing page” (HP, Other software companies) • Tracking becomes more effective on the web • Who opened the email • Who purchased • How much • Measure versus “control” page

  12. Creative execution • “Long” copy sells • Standard DM piece is long and has multiple parts, longer people read, more likely to buy • Web site ideally situated to the “long copy” model • Web is also visual, interactive

  13. Service and support • Most important order you get is the second order--two time buyer twice as likely to buy as one time buyer • Lifetime value calculations are critical • RFM: Recency, Frequency, Monetary Value • CLV: Sales over life of customer minus costs over life of customer • We can “score” customers and target those most likely to purchase again • We can test and test in DM and now have the interactivity of the web to speed up testing

  14. Success Depends Upon--which is more important? Copy Offer List

  15. Implications for web marketers • Web is wonderful way to collect customer information, it is access to an “in house” list • Companies can use that information to target the offer • Personalized webpages, my netscape • Customized product offerings, ala Amazon • Permission email marketing campaigns • Privacy issues are associated with this responsibility • Web is ideal “long copy” format, and can provide something else, interaction

  16. General Stages in E-Business Initiatives • Supplying company and product information (brochureware) • Providing customer support and enabling interactions, cost reduction • Supporting electronic transactions • Personalizing interactions with customers, customizing products (Amazon) • Fostering communities, maybe

  17. Hierarchy of Customer-Focused Web Strategies • Customizing products • Personalizing interactions with customers, Fostering communities • Supporting electronic transactions • Providing customer support and enabling interactions, cost reduction • Supplying company and product information Customization Personalization Transaction Interaction Information Fig. 5 in Roberts

  18. www.the-dma.org

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