The document discusses managing direct marketing campaigns. It begins by explaining what direct marketing is and discussing database marketing. It then explores setting objectives for campaigns, including financial, communication, and marketing objectives. Key aspects of managing campaigns that are covered include identifying target audiences, making creative decisions, choosing appropriate media, executing the campaign, and evaluating its performance. Metrics for evaluating campaign success such as response rates, new customers acquired, and customer lifetime value are also examined.

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By :
Prof. Amit Kumar
07/04/15

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“A major change that is reshaping the face of selling is the
growth of direct marketing. This session explores the major
changes that are taking place, the key tools that can be
used and how the direct marketing process can be
effectively managed. It begins by explaining the meaning of
direct marketing before discussing the use of database
marketing. The management of direct marketing activities
will then be explored, including setting objectives, targeting,
achieving customer retention and creating action plans”.
ACCMAN
Importance of this course
07/04/15
Direct Marketing Managing a Direct Marketing Campaign

3. In order to inform customers about various products and
ultimately sell them, marketing managers routinely
conduct marketing campaigns of varied types as part of
overall marketing strategy. They may be for:
 Launch of a new product
 Test marketing of a new product
 Relaunch of an old product with more features
 Campaign for specific occasions
 Campaign to build brand image, e.g. with a
celebrity
Direct Marketing Managing a Direct Marketing Campaign
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Introduction: Campaign Management
ACCMAN

4. • The starting point for the campaign management is the
marketing plan: direct marketing should be fully
integrated with all marketing and promotional mix
elements to provide a coherent marketing strategy.
• In particular direct marketers must understand how the
product is being positioned in the marketplace in terms
of its target market (where it is to compete) and
differential advantage (how it is to compete).
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Managing a Direct Marketing Campaign
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

5. Managing a Direct Marketing Campaign
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Marketing Plan
(Strategy Hierarchy)
Identifying and Understanding Target Audience
Setting Campaign Objectives
Creative Decisions Media Decisions
Campaign Execution
and Evaluation
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

6. Managing a Direct Marketing Campaign
Identify and Understand the Target Audience
• Using market segmentation variables such as …….
• Direct marketers also need to understand the buyer
behavior of the target audience. David Ogilvy, a famous
advertising guru, once wrote ‘never sell to a stranger’.
• Once the target audience has been defined, a list is
required which may be obtained from an in-house
database or through an external broker.
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Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

7. 1. Financial Objectives
– Sales volume and value, profit, return on investment
2. Communication Objectives
– Awareness, stimulate trial, positioning of brand in
consumers’ minds, remind and reinforce
3. Marketing Objectives
– Customer acquisition/retention, lead/enquiry generation,
number of orders, response rate (proportion of contacts
responding)
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Managing a Direct Marketing Campaign
Setting Campaign Objectives
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

8. Marketing Objectives:
– Acquiring new customers is usually much more costly
than retaining existing ones.
• When calculating the resources to be used to create
new customers, the concept of LTV should be used.
This is the measure of the profits of customers over
their expected life with the company.
– Retaining as an objective has spawned loyalty
program such as frequent flyer schemes (airlines)
and loyalty cards (supermarkets).
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Managing a Direct Marketing Campaign
Setting Campaign Objectives
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

9. In order to achieve objectives, companies need to produce
an effective creative brief which includes the following:
1. Communication objectives
2. Target market analysis
3. Brand benefits (and weaknesses)
4. Development of the offer
5. Message communication
6. Action Plan
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Managing a Direct Marketing Campaign
Creative Decisions
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

10. 1. Communication objectives
• This spells out what the campaign is hoping to achieve,
such as sales volume and value, number of orders,
customer retention and/or acquisition and lead
generation.
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Managing a Direct Marketing Campaign
Creative Decisions
2. Target Market Analysis
• Target consumers will be identified, profiled and their
needs and buyer behavior analyzed. This is essential so
that the creative team adopts the Ogilvy philosophy of
never selling to a stranger.
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

11. 3. Brand benefits
• The product features can be linked by use of phrases
like ‘which results in’ or ‘which means that’. Any
differential advantages need to be identified through an
analysis of competitor brands’ strength & weaknesses.
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Managing a Direct Marketing Campaign
Creative Decisions
4. Development of an offer
• Potential offers should be pre-tested with the target
audience to establish their attractiveness. Offers may
be price related or take the form of free gifts (e.g. a free
telephone/radio alarm to people taking out insurance.
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

12. 5. Message Communication
• In direct mail the offer can be communicated by the
envelope as well as the internal contents. Recipients
must be told clearly how to respond.
• In telemarketing, scripts are often used to communicate
message.
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Managing a Direct Marketing Campaign
Creative Decisions
6. Action Plan
• An action plan focusing on when the campaign is to run,
how often and recommendations regarding the most
appropriate media to use needs to be drawn up.
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

13. Managing a Direct Marketing Campaign
Media Decisions
1. Telephone
2. Direct Mail
1. Solo Mailings, 2. Catalogs
3. Broadcast & Electronic Media
1. Direct-Response Television
2. Direct-Response Radio
3. Internet & World Wide Web
4. Space Advertising in Print Media
1. Newspapers and Magazines
5. Specialty Advertisements in Print Media
1. Newspaper Insert, 2. Bind-Ins and Blow-Ins
3. Bingo Cards, 4. Bill/Package Stuffers
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

14. Direct Mail:
• Direct mail is material set by post to a home or business
address with the purpose of promoting a product and/or
maintaining an ongoing relationship.
• The effectiveness of direct mail relies heavily on the
quality of the mailing list.
• The management of direct mail involves asking five
questions:
1. Who: Who is the target market? Who are we trying to
influence?
2. What: What response is required? A sale, an enquiry?
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Managing a Direct Marketing Campaign
Media Decisions
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

15. Direct Mail:
• The management of direct mail involves asking five
questions:
3. Why: Why should they buy or make an enquiry? Is it
because of our product is faster, cheaper etc.?
4. Where: Where can they be reached? Can we obtain their
home or working address?
5. When? When is the best time to reach them? Often this
is at the weekend for consumers and Tuesday,
Wednesday or Thursday for business people.
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Managing a Direct Marketing Campaign
Media Decisions
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

16. • Once the creative & media decisions have been made,
the action plan will be executed. Campaign should be
evaluated against defined objectives which include:
– Sales volume or value
– Response rate and number of enquiries
– Cost per order/enquiry/sale
– Number of new customer
– Conversion rate from enquiry to sale
– Renewal rate
– Repeat purchase rate
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Managing a Direct Marketing Campaign
Campaign Execution and Evaluation
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

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Managing a Direct Marketing Campaign
Campaign Execution and Evaluation
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN
Measure Operationalization
Response rate Percentage of prospects contacted who replied
Number of inquiries No of requests for information
Number of qualified leads No of leads who expressed interest
New customer acquired No of purchasers who had not purchased before
Customer acquisition cost Total marketing costs divided by number of new
customers
Lapsed customer reactivated Inactive customers who purchased
Average sales Total sales divided by no of buyers
Product returns & adjustments Dollar amount of returns and adjustments
Customer service requests No of post-sale service requests
Customer lifetime value (LTV) Net present value of a customer over a specified
period of time

18. • Most of these objectives measure the immediate (short-
term) impact of a DM campaign. Direct marketers
should not ignore longer term impact of a campaign
which takes into account the LTV of a customer.
• A campaign in the short term may not appear cost
effective, but when the impact through renewals and
repeat purchase is taken into account its longer term
value may be very positive.
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Managing a Direct Marketing Campaign
Campaign Execution and Evaluation
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

19. While evaluating past programs, the direct marketer should
also uncover their budgets. Previous budgets are
extremely useful in at least two ways:
1. They show the manner in which budgets are typically
presented in that firm, prevents a great deal of ‘rework’.
2. They can help advert mistakes arising from not
including key cost components. This kind of error can
make the difference between a successful DM
campaign and a disastrous failure.
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Managing a Direct Marketing Campaign
Determining the Budget
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN

20. • The example shows a sample budget for a hypothetical
direct mailing. It is essential that the budget be broken
down into individual elements, each of which can be
costed separately.
• It also shows a time schedule for a relatively simple
direct mail program using several different vendors. It
lists each separate activity indicating the beginning and
ending date for each one and its resulting duration.
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Managing a Direct Marketing Campaign
Determining the Budget
Direct Marketing Managing a Direct Marketing Campaign
ACCMAN