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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
14. Direct Marketing © The McGraw−Hill
Companies, 2003
• The U.S. Postal Service. Postal Zip codes and the extended four-digit code
provide information on both household and business locations.
• List services. Many providers of lists are available. The accuracy and timeliness
of the lists vary.
• Standard Rate and Data Service. SRDS provides information regarding both
consumer and business lists. Published in two volumes, Direct Mail List Rates
and Data contains over 50,000 list selections in hundreds of classifications.
• Simmons Market Research Bureau. SMRB conducts an annual study of
customers who buy at home via mail or telephone (see Figure 14-4). It compiles
information on total orders placed, types of products purchased, demographics,
and purchase satisfaction, among others.
• Direct Marketing Association. The direct marketers’ trade organization promotes
direct marketing and provides statistical information on direct-marketing use.
The DMA’s Fact Book of Direct Marketing contains information regarding use,
attitudes toward direct marketing, rules and regulations, and so forth.
Consumer-goods manufacturers, banks, credit bureaus, retailers, charitable organizations,
and other business operations also sell lists and other selected information.
Companies can build their own databases through completed warranty cards, surveys,
and so on.
Determining the Effectiveness of the Database While many companies
maintain a database, many do not use them effectively. Collecting names and
information is not enough; the list must be kept current, purged of old and/or inactive
customers, and updated frequently. The more information about customers that can be
contained in the database, the more effective it will be. The Postal Service recommends
an RFM scoring method for this purpose. 13 RFM stands for the recency, frequency,
and monetary transactions between the company and the customer. More
specifically, data need to be entered each time there is a transaction so the company
can track how recently purchases have been made, how often they are made, and what
amounts of money are being spent. In addition, tracking which products and/or services
are used increases the ability to conduct the activities previously mentioned (on
page 467). By analyzing the database on a regular basis, the company or organization
can identify trends and buying patterns that will help it establish a better relationship
with its customers by more effectively meeting their needs.
Direct-Marketing Strategies and Media
As with all other communications programs discussed in this text, marketers must
decide the message to be conveyed, the size of the budget, and so on. Perhaps the
major difference between direct-marketing programs and other promotional mix programs
regards the use of media.
As shown in Figure 14-1, direct marketing employs a number of media, including
direct mail, telemarketing, direct-response broadcasting, the Internet, and print. Each
medium is used to perform specific functions, although they all generally follow a
one- or two-step approach.
In the one-step approach, the medium is used directly to obtain an order. You’ve
probably seen TV commercials for products like wrench sets, workout equipment, or
magazine subscriptions in which the viewer is urged to phone a toll-free number to
place an order immediately. Usually these ads accept credit cards or cash on delivery
and give an address. Their goal is to generate an immediate sale when the ad is shown.
The two-step approach may involve the use of more than one medium. The first
effort is designed to screen, or qualify, potential buyers. The second effort generates
the response. For example, many companies use telemarketing to screen on the basis
of interest, and then follow up to interested parties with more information designed to
achieve an order or use personal selling to close the sale.
Direct Mail Direct mail is often called “junk mail”—the unsolicited mail you
receive. More advertising dollars continue to be spent in direct mail than in almost any
471
Chapter Fourteen Direct Marketing