1. Database and Direct Response
Marketing
Anisa
Osariana
201080016

2. Developing Loyal Customers
• The 3 R’s
• Recognition
• Relationship
• Rewards

3. Database Marketing
Building relationships
Database Analytics
• Data-Driven Programs
• Data-Driven
Communications
• Direct Response
Marketing
Identifying customers
DATABASE

4. Tasks in Database Marketing
•Building a data warehouse
•Database coding and analysis
•Data mining
•Data-driven marketing communications
•Data-driven marketing programs

5. Building the Data Warehouse
•Operational database
•Customer transactions
•Follows accounting rules
•Marketing database
•Current customer information
•Former customer information
•Prospect information

6. Marketing Data Warehouse
•Customer names and addresses
•E-mail addresses
•Record of visits to the firm’s Web site
•History of every purchase transaction
•History of customer interactions
•Inquiries
•Complaints
•Returns

7. Marketing Data Warehouse
• Customer survey results
• Preferences and profiles
supplied by the customer
• Response history from
marketing campaigns
• Appended data
• Demographic and
psychographic data
(Knowledge Base
Marketing or Claritas)
• Geocoding
(CACI Coder Plus)
• Database coding through
customer analyses
• Lifetime value
• Customer segment
cluster
• RFM (recency, frequency,
monetary) analysis

8. Database Coding and Analysis
•Personalized communications
•Marketing campaigns
•Common forms of coding
•Lifetime value analysis
•Customer Clusters

9. Lifetime Value Analysis
• Represents the profit revenue of a customer
throughout the lifetime of the relationship
• Individual lifetime value
• Customer segment lifetime value
• Key figures
•Revenue and costs
•Retention rate
•Visits or purchases per time period

10. Data Mining
• Building profiles of
customer groups
• Preparing models that
predict future purchase
behavior
• Drives
• Marketing
communications
• Marketing programs

11. Why the Internet is Important in
Customer Communications
• Low cost
• Available 24/7.
• Metric analysis
• If the message was read
• Time it was read
• How much time was spent
• Customers access to additional information
• Build a bond with customers.

12. Why build a data
warehouse? Why
code data?
Why mine the data?
• Establish One-on-One
Communications
• Build Relationship
• Repeat Purchase (Customer
Loyalty)

13. Database-Driven
Communications
• Identification codes
• Customer IDs/passwords
• Personalized greetings
• After-sale communications
• Customer profile information
• In-bound telemarketing
• Trawling

14. Database-Driven Marketing
Programs
• Permission marketing
• Frequency/loyalty
programs
• Customer relationship
management

15. Steps in Building a Permission
Marketing Program
• Obtain permission
• Offer a curriculum over time
• Reinforce incentives to continue the relationship
• Increase level of permission
• Leverage the permission to benefit both parties

16. Successful Permission Marketing
• Ensure recipients have granted permission
• Make e-mails relevant
• Customize program by tracking member activity
• Empowerment
• Reciprocity

17. Frequency Program Objectives
• Maintain sales, margins, or profits
• Increase loyalty of existing customers
• Induce cross-selling to existing customers
• Differentiate a parity brand
• Preempt the entry of a new brand
• Preempt or match a competitor’s program

18. Frequency Program
Goals
• Develop customer
loyalty
• Matching or
preempting the
competition
• Target higher income
households
Principles
• Design the program to
enhance the value of the
product.
• Calculate the full cost of
the program.
• Design a program that
maximizes the
customer’s motivation to
make the next purchase.

19. Customer Relationship
Management
• Database technology
• Customize products
• Customize communications
• Many CRM programs failed
• Built on two primary metrics
• Lifetime value
• Share of customer

20. Steps to Develop
Customer Relationship Management
• Identify the company’s customers
• Differentiate customers in terms of needs and value
• Lifetime value
• Share of customer
• Interact with customers
• Improve cost efficiency
• Enhance effectiveness of interaction
• Customize goods or services

21. Customer Relationship
Management Reasons for Failure
• Implemented before a solid customer strategy is
created
• Rolling out a CRM program before changing the
organization to match the CRM program
• Becoming technology driven rather than customer
driven
• Customers feel like they are being stalked instead
of being wooed

22. Direct Response Marketing
• Direct Response
Marketing is the
targeting of products to
customers without the
use of other channel
members
• Direct Marketing
Association
• Prospecting 60%
• Customer retention
40%

23. Direct Mail
• Most common form of
direct marketing
• Types of lists
• Response list
• Compiled list
• Advantages
• Target mailings
(consumer, b-to-b)
• Measurable
• Driver of online sales
• Disadvantages
• Clutter
• Costs
• Digital direct-to-press

24. Catalogs
• Long-term impact
• Low-pressure sales
tactics
• First stage in buying
cycle
• Database
• Specialty catalogs
• Business-to-business

25. Direct Response Marketing
Direct Response Media
• Television
• Radio
• Magazines
• Newspapers
Internet
• Direct response to ads
• Cost-effective
• Builds relationships
• Personalization of
communication
• Customization of offer
• Search engine ads

26. Direct Response Marketing
Direct Sales
• In the consumer sector,
several companies use
direct sales
• The sales person
contacts friends,
relatives, coworkers, and
others and provide them
with small catalogs or
marketing brochures
Telemarketing
• Inbound telemarketing
• Cross-selling
• Outbound
telemarketing
• Cold calling
• Database
• Prospects

27. Personal Selling
• Personal selling offers a face-to-face opportunity to
build relationship with consumers
• Personal selling should not be limited to simply
making sales, but an additional objective should be
to develop longer-term relationship with customers

28. Personal Selling
• Generating leads
• Qualifying prospect
• Knowledge acquisition
• Sales presentation
• Handling objectives
• Sales closing
• Follow-up

29. THANK YOU