Database Marketing and Direct Response
Marketing
Chapter – Eleven (11)
Lecturer – Md Shahedur Rahman
Remember this !!
 IMC program relies heavily on the employees
who have the most interactions with
customers.
 These individuals are the face of 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.
Personal Selling
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
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
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
Database Marketing
Database Marketing
 Database development and database marketing programs are
often used to supplement personal selling activities.
 Database development refers to the creation of a database
to support the overall company, IMC program and the total
marketing effort.
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
Determining Objectives
 What kinds of data are currently available?
 When (or how often) will information be
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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?
Typical Objectives for an IMC Database
 Provide useful information about a firm’s customers
 Create information about why customers purchase the
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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
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
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
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
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
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 ?)
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
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.
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?
Direct Marketing
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:
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Mail
Mail-order Catalogs
Mass Media – TV, radio, magazines and newspapers
Alternative Media
Mail
Catalogue
Mass Media
Alternative Media
Internet
Email
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
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
Customer Relationship Marketing
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
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
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
 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