Mark 453, Ch8 - Direct Marketing

Front 1

Steps to creating a Data Warehouse

Back 1

1. Create warehouse
2. Code & analyze data
3. Pick program & tactic best suited to utilize info

Front 2

Internal Data Sources

Back 2

- Newsletters
- Customer service
- Surveys

Front 3

3 Types of Rented Lists

Back 3

1. Response List
- Info on previous customers who've responded favorably
- Expensive -> High targeting

2. Compiled List
- Collected data on purchases & behavior
- Marketers can pay to be included & own data
- Most likely to comply

3. Subscription List
- Info on individuals subscribing to media
- Least expensive due to lower degree of targeting

Front 4

What is Lifetime Value Analysis and the 4 key figures it uses?

Back 4

Profit of customer through lifetime relationship
- Revenues
- Costs
- Retention Rates
- Visits/purchases during a period

Front 5

What is RFM analysis and how is it coded?

Back 5

Recency (date of last purchase, 5=most recent)
Frequency (# of purchases within a period, 5=frequently)
Monetary (expenditures per year with a firm, 5=big spender)

Most useful = Recency
Least predictive = Monetary

Front 6

What are data mining & modelling?

Back 6

Data Mining
- Program used to develop profile of company’s best customers
- Used to target sales calls

Data Modelling
- Predict future sales based on past purchase activities

Front 7

Permission Marketing: Steps

Back 7

1. Obtain permission
2. Offer meaningful ongoing curriculum
3. Reinforce incentive to remain in relationship
4. Increase level of permission
5. Leverage permission to benefit both parties

Front 8

Permission Marketing: Keys to Success

Back 8

Relevant to Customer Receiving
Customize permissions to meet needs of individuals

Front 9

Permission Marketing: Incentives

Back 9

High perceived relevance of info
High perceived monetary benefit
Lower perceived entry cost
Lower perceived privacy costs
Lower perceived info processing costs

Front 10

Permission Marketing: Empowerment & Reciprocity

Back 10

- Allow consumers to believe they have power throughout relationship

- Sense of obligation when customer receives rewards

Front 11

Loyalty Programs: Goals

Back 11

- Develop customer loyalty
- Match the competition
- Higher income families more likely to join

Front 12

Loyalty Programs: Use/Goal of CRM

Back 12

- Bond with customers
- Goal: Share of customer

Front 13

Loyalty Programs: Principles

Back 13

1. Design program to enhance value of product
2. Calculate full cost of program
3. Maximize customer's motivation to make next purchase

Front 14

Loyalty Programs: Steps

Back 14

1. Process
2. Service
3. Personal/emotional

Front 15

Types of Direct Marketing Communications

Back 15

Direct Mail
- Majority of direct marketing investment

Email Marketing
- Customer already engaged in medium can lead to purchase

Telemarketing
- Most successful when used with database

Front 16

Direct Marketing Pros & Cons

Back 16

Pros:
- Targetability
- Customizability
- Measurable
- Timely

Cons
- Image Limitations
- Clutter
- Selective Exposure
- High Cost Per Contact