Direct Marketing Primer


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This is a how-to presentation I developed for a client who wanted a basic understanding of direct marketing.

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Direct Marketing Primer

  1. 1. <ul><li>About Direct Marketing </li></ul><ul><li>Presented by Jim Gilbert, President, </li></ul><ul><li>Gilbert Direct Marketing, Inc. </li></ul>
  2. 2. <ul><li>&quot;There is only one valid definition of business purpose – to create a customer. Companies are not in business to make things…but to make customers.” </li></ul><ul><li> -- Peter F. Drucker </li></ul>
  3. 3. <ul><li>Direct Marketing (DM) is an interactive system of marketing that: </li></ul><ul><ul><li>Uses one or more advertising media to effect a measurable customer response </li></ul></ul><ul><ul><li>Or transaction at any location </li></ul></ul><ul><ul><li>And stores information about that event in a database. </li></ul></ul>
  4. 4. <ul><li>Database used to capture response (and non response) </li></ul><ul><li>Data to be used for future decision making and targeted promotions! </li></ul>
  5. 6. Database
  6. 7. <ul><li>Two way communication between customer or prospect and company. </li></ul><ul><li>Sometimes called interactive marketing. </li></ul><ul><li>No middle man. </li></ul><ul><li>Copy writer is the “sales person”. </li></ul><ul><li>Measurable, database always used. Direct marketer always accountable. </li></ul>
  7. 8. <ul><li>Lifetime Value (LTV): the net revenue stream generated by a customer, or customers over time. Includes all income less expenses. </li></ul><ul><li>Direct Response Advertising: The strategic and tactical element of direct marketing that includes, direct mail, print ads, direct response television and internet promotions. </li></ul><ul><li>RFM (Recency, Frequency, Monetary), an analysis and list selection tool that allows for targeting prospects and customers from a customer database from best to worst. </li></ul><ul><li>Select: a segment of a list or database. A subset of the the total universe. Usually used to drill deeper into as list to increase results. For instance, more recent names (selecting last 6 months will provide better results than older names. </li></ul>
  8. 9. <ul><li>Indirect path to final consumer. </li></ul><ul><li>Product manufacturer “loses control” of the sales cycle. </li></ul><ul><li>Manufacturer let’s go of responsibility. </li></ul><ul><li>Advertising and branding lead the way. </li></ul><ul><li>Not very efficient! </li></ul>
  9. 10. <ul><li>Direct path to final consumer. </li></ul><ul><li>Manufacturer retains control of the sales process. </li></ul><ul><li>Manufacturer responsible for success and failure. </li></ul><ul><li>Direct response advertising leads the way. </li></ul><ul><li>Branding seen as secondary to getting orders, leads, web visits, etc. </li></ul><ul><li>Efficiency gained via understanding full sales cycle. </li></ul>
  10. 11. Direct Marketing Process
  11. 12. The goal of the direct marketer is to move people higher up in the hierarchy. Each level has a progressive $ value attached in terms of worth the the company.
  12. 13. <ul><li>Generate new customers at the lowest possible cost per acquisition. </li></ul><ul><li>Maximize customer lifetime value via repeat purchases. </li></ul><ul><li>The goals of every direct marketing organization need to be exclusively focused around the above!!! </li></ul>
  13. 14. <ul><li>The process must start with customers: </li></ul><ul><ul><li>Who are they? </li></ul></ul><ul><ul><li>What do they need and want? </li></ul></ul><ul><ul><li>Where are they located? </li></ul></ul><ul><ul><li>When are they ready to buy? </li></ul></ul><ul><ul><li>How much will they buy? How often? </li></ul></ul><ul><ul><li>Why do they buy? </li></ul></ul>
  14. 15. <ul><li>Direct Marketing is a “test and roll” business! </li></ul><ul><ul><li>Test the smallest quantity possible. </li></ul></ul><ul><ul><li>Use response and statistical analysis to project results over entire universe </li></ul></ul><ul><ul><li>Most test list orders between 5,000 – 10,000 </li></ul></ul><ul><ul><li>Selections: drill down into list and allow for most bang for list renter buck </li></ul></ul><ul><ul><li>Selections add revenue to list order. </li></ul></ul>
  15. 16. Direct Marketing 40/40/20 Rule
  16. 17. <ul><li>For success, Concentrate your efforts as follows: </li></ul><ul><ul><li>40% on finding the right list that most closely matches your target market. </li></ul></ul><ul><ul><li>40% on developing the most compelling offer you can to stimulate your target market market to respond. </li></ul></ul><ul><ul><li>20% on developing creative that “speaks” your offer benefits in the most meaningful way to your target market. </li></ul></ul><ul><ul><ul><li>Includes media, vehicle, layout, design, format, copy. </li></ul></ul></ul>
  17. 18. <ul><li>Presented by Gilbert Direct Marketing, Inc. </li></ul><ul><li>Email: </li></ul><ul><ul><li>[email_address] </li></ul></ul><ul><li>Blog: </li></ul><ul><ul><li> </li></ul></ul><ul><li>Catalog Success Magazine Column: </li></ul><ul><ul><li> </li></ul></ul><ul><li>Follow me on Twitter: </li></ul><ul><ul><li> </li></ul></ul>