Marketing Communications, Chapter 11
Tasks in Database Marketing
-Building a data warehouse -Database coding and analysis -Data mining -Data-driven marketing communications -Data-driven marketing programs
Purposes of Data Coding and Data Mining
-Develop marketing communications & programs -For personal sales (Qualify prospects, Information for sales calls)
Methods of Closing Sales
-Direct close -Trial close -Summarization close -Continuous "yes" close -Assumptive close
Direct Marketing Communications Process Five Steps
-Establishment of objectives -Communication of an offer through the appropriate medium -Response, or customer orders -Fulfillment, or filling orders and handling exchanges and returns -Relationship building through maintenance of the company's database and customer service
Steps in the Selling Process
-Generating leads -Qualifying prospect -Knowledge acquisition -Sales presentation -Handling objections -Sales closing -Follow-up
Methods of Handling Objections
-Head-on approach -Indirect approach -Compensation method -"Feel, felt, found"
Goals of Frequency or Loyalty Programs
-Maintain or increase sales, margins, or profits -Increase loyalty of existing customers -Preempt or match a competitor's offer -Encourage cross-selling -Differentiate the brand -Discourage entry of a new brand
Limitations of Catalogs
-Negative perceptions: Can be viewed as junk mail by many -Costs: Cost per 1000 higher than mass media -Response rate: Relatively low at 3% to 4% -Mailing list: Databases constantly maintained
Ways to Generate Leads:
-Networking -Directories -Cold calls -Referrals -Database-generated leads -Direct response ads -Online ads -Trawling -Analytical techniques, such as data mining
Steps in Building a Permission Marketing Program
-Obtain permission from the customer. -Offer the consumer an ongoing curriculum that is meaningful. -Reinforce the incentive to continue the relationship. -Increase the level of permission. -Leverage the permission to benefit both parties.
Database-Driven Marketing Programs
-Permission marketing -Frequency programs -Customer relationship management efforts
Qualifying prospects means evaluating leads on two dimensions:
-Sales potential -Probability of acquiring the prospect as a customer.
Advantages of Catalogs
-Targeted: Can be directed to specific segments -Engages attention: Use of high-quality design/photography -Complete information: Extensive product info/comparisons -Convenience: Variety of purchase options
Data mining includes two activities:
-building profiles of customer segments -preparing models that predict future purchase behaviors based on past purchases
Methods of Direct Response Marketing
-direct mail to customers/prospects -emails to customers/prospects -internet -catalogs -mass media -outbound marketing -search engine marketing
Two primary CRM metrics are the
-lifetime value of the customer -share of customer
The initial sales call can be designed to gather information, discuss bid specifications, answer questions, or to close the deal with a final pitch or offer. The exact nature of the first sales call depends on the information gathered prior to the call. Also, the stage of the buying process affects the presentation. The types of sales presentations used typically fall into one of these categories: ______.
-stimulus-response -need-satisfaction -problem-solution -mission-sharing
Frequency Program
A company offers free or discounted merchandise or services for a series of purchases -Frequent-flyer program
joint venture
A partnership in which two or more companies join to undertake a major project.
assumptive close
A salesperson can also assume the customer will say "yes." She might ask, "How many cases do you want?" or "How would you like this to be shipped?"
personal selling
Any form of direct contact between a salesperson and a customer.
The challenge becomes locating quality leads from the list. _____ are the worst method of generating leads. The salesperson has no idea whether the company or individual has any interest in the product.
Cold calls
_______ Are the Foundation of the DMC Arena Successful direct marketing efforts can be traced back to the effectiveness of the company's database. _____ plays an integral part in creating and maintaining databases that can contain millions of pieces of information. For example: Nintendo uses the 2 million names in its database when introducing new versions of its video game system
Databases; Technology
______ remains the most common form of direct response marketing.
Direct mail
________ constitutes the primary benefit of database marketing. Although database marketing can be used for selling products, retention and relationships remain the primary focus.
Enhancing customer loyalty
The newest form of data analytics is based on information provided by mobile ____ technology. Cell phone companies such as Verizon can track customer locations and combine it with profile information.
GPS
______ helps decision makers finalize placements of retail outlets and directs marketing materials to specific geographic areas. Geocoding combines _____ information with ____ data.
Geocoding; demographic; lifestyle
______ Television, radio, magazines, and newspapers provide additional tools for direct response advertising.
Mass Media
_____ generate the most ideal leads, because most recommendations are made by satisfied individuals.
Referrals
Geocoding
The process of adding geographic codes to each customer's record so that customer addresses can be plotted on a map
summarization close
The salesperson may also summarize the product's benefits and how it meets the customer's needs prior to asking for the order.
feel, felt, found method
The salesperson permits the customer to talk about her fears or worries. In response, the salesperson can relate experiences and how the product resulted in a positive experience. -used when customers do not have specific objections but are anxious or worried about the consequences of switching to a new vendor.
reciprocity
a sense of obligation toward the company. consumers should be given rewards along the way, not just at the beginning.
Successful loyalty programs are based on two principles: _______ and _____. Participants in a loyalty program should feel value accrues from belonging to the program. When the customer in turn rewards the perceived value by making additional purchases, it creates a sense of reciprocity. When the customer and the company both benefit from the relationship, it continues.
added value; reciprocity
Direct Marketing Key Players = ______ agencies, ______ agencies service firms (specializing in supplying printing, mailing, list brokering and data management) and fulfillment houses that take care of special promotion events that require rebates, coupons etc.
advertising; direct marketing
Data warehouse holds _____. The IT department and marketing team distinguish between an _____ database and the ______ database when building a data warehouse.
all customer data; operational; marketing
Indirect approach:
allows the salesperson to never really tell the customer he is wrong. Instead, the salesperson sympathizes with the customer's viewpoint and then provides the correct information.
head-on approach
answers the objection directly (suggests that the customer is wrong)
Direct Mail Message Nine Elements Involved: -Get _____: use pictures and headlines that tour the product benefits -Be _____: send the right message to the right person -_____ with an individual name -Use a strong ____-in: "Dear Friend: I could really kick myself!" -Put the offer as _____ in the body of the letter as possible -The letter explains the details of the offer and use testimonials or evidence that clearly describes benefits to the customer -Drive to _____ using short pieces to drive interested prospect to the website for details -Closing by _____ the offer and stating additional incentives and a clear call to action -_____, Test, test every single element - small changes can boost conversion rates dramatically
attention; relevant; Personalize; Lead; early; Website; repeating; Test
Direct Marketing Industry begins with research and database development - its main tools are ______ as well as other new media i.e., social media.
catalogs, direct mail, telemarketing, direct-response advertising, and the Internet
Permission marketing definition
companies send promotional information to only those consumers who give the authorization to do so.
Empowerment
consumers believe they have power throughout the relationship and not just at the beginning when they agreed to join the program. They can make decisions and have choices about what to receive.
A database-driven marketing program starts with assigning individual customers IDs and passwords that allow them to access components of the website that are not available to those who simply visit the site without logging on. IT professionals tie IDs and passwords to ____ on each customer's computer in order to customize pages and individual offers. When the system works properly, the customer does not have to log in each time. Instead, the cookie automatically does it for the person.
cookies
When a customer places an order, _____ can occur by offering other products or services. At times, customers make inbound calls to register complaints or talk about problems. The least popular method for direct marketing is _____. New legislation now requires prior consent before outbound sales calling or texting to a cell phone.
cross-selling; outbound telemarketing
A response list consists of _____. A compiled list provides ______.
customers who have made purchases or who have responded to direct mail offers in the past; information about consumers who meet a specific demographic profile
Opening Thought: Prior to any form of broadcast media, marketers relied heavily on the _____ medium to reach their target audiences with information about their products primarily through the US mail system. With the advent of the digital age, this time old medium has taken on a new life and role for marketers. Today, marketers now have a new medium that allows them to communicate directly with, rather than at, their target audience ensuring efficiencies regarding reach and frequency.
direct mail
The need-satisfaction sales approach
discover a customer's needs and then provide solutions
For business-to-business marketers, _____ works better than postal mail and other direct marketing forms when the recipient is familiar with the company.
Permission marketing programs have the potential to build strong, ongoing relationships with customers when they offer something value. To optimize permission marketing, firms feature _____ and ______.
empowerment; reciprocity
The lifetime value figure
estimates the value of future profits the individual or segment will generate over a lifetime relationship with a brand or firm
An operational database _______. The marketing department manages the marketing database, which contains _______.
holds the individual's transactions with the firm and follows accounting principles; information about current customers, former customers, and prospects
Telemarketing takes place in two ways: ______.
inbound or outbound
Permission marketing programs can be offered on the internet, by telephone, or through direct mail. Permission can be obtained by providing _____ for volunteering, such as information, entertainment, a gift, cash, or entries in a sweepstakes.
incentives
Inbound telemarketing: _____ Outbound telemarketing: _____
individual calls a company; company calls an individual
The _____ offers the key technology for database-driven communications. The Importance of the Internet in Customer Communications -It is the _____ form of communication. -It is _____ 24/7. -Metric analysis reveals that the customer read the message, the time it was read, and how much time was spent reading it. -It can build a bond with customers.
internet; cheapest; available
Database marketing
involves collecting and utilizing customer data for the purposes of enhancing interactions with customers and developing customer loyalty.
The quality of the mailing ___ normally determines the success of a direct mail program. Companies utilize two sources when compiling a mailing list: _____
list; the firm's internal database and/or a commercial list.
Many marketing experts believe a ____ value provides more accurate information, because it sums costs across a market segment. Individual lifetime value calculations normally only contain costs for single customers.
market segment
Direct marketing may have higher costs per impression than ______, be it is less expensive in the long run because its messages are tightly targeted to reach prime prospects/customers.
mass media
Maximize a customer's motivation to make another purchase. Consequently, ______ users represent the most valuable target group.
moderate
Database coding and analysis provide information for the development of _______ communications. They assist in creating marketing promotional campaigns. Common forms of database coding include _____.
personalized; lifetime value analysis, customer clusters, and location-data tracking
Customer relationship management (CRM) programs
provide a method to employ databases that customize products and communications with customers, with the goals of higher sales and profits.
Personal selling offers a face-to-face opportunity to build _______ with consumers. The goal of personal selling should not be limited to making sales. Developing longer-term relationships with customers represents a second key objective. Relationship selling seeks to create a customer for life, not for a single transaction.
relationships
Successful database marketing emphasizes identifying customers and building _____ with them. *** page 1 photo
relationships
problem-solution sales approach
requires employees from the selling organization to investigate a potential customer's operations and problems and then offers feasible solutions. -aa team of individuals such as engineers, salespeople, and other experts
A company can purchase a commercial list as either a ____ list or a ____ list.
response; compiled
Trawling
searching the database for a specific piece of information for marketing purposes.
cross-selling
selling additional products or services to an existing customer
Direct Sales
selling to customers directly at home or work -The salesperson contacts friends, relatives, coworkers, and others and provides them with small catalogs or marketing brochures. Alternatively, individuals host parties and invite friends and relatives to see products.
stimulus-response sales approach ("canned" sales pitch)
specific statements (stimuli) designed to elicit specific responses from customers. -The salesperson memorizes the stimulus (the pitch) -Telemarketers, retail sales clerks, and new field sales reps often rely on this method.
One program closely tied to database marketing, direct response marketing (or direct marketing), involves _____.
targeting products to customers without the use of other channel members
International Implications -Differences in _____ -_____ and internet availability -_____ laws: information collection methods and types of information -Legal restrictions -______ differences A company's marketing team considers all local legal, social, cultural, technological, and competitive conditions before embarking on an international database-driven marketing program or direct marketing program.
technology; Language; Local; Cultural
The cost of maintaining the relationship represents another important amount. It measures all costs associated with marketing, communicating, and maintaining the database records. A lifetime value figure for a customer segment of $1,375 represents ____.
the amount of revenue, on average, that each customer will generate over his or her lifetime.
The lifetime value it measures ______. Share of customer refers to ______.
the potential level of purchases to be made; the percentage of expenditures a customer makes with one particular firm compared to total expenditures in that product's category
Continuous "yes" close
the salesperson asks a serious of questions along the way, ensuring the customer will continuously respond "yes", so when it comes time to ask for the order the customer may be more likely to respond with a "yes"
direct close: ______ Trial close approach: ______
the salesperson asks for the order outright. the salesperson asks for feedback that provides information regarding the customer's reaction, without asking directly for the sale. A positive reaction leads the salesperson to ask for the order. If not, then he returns to the sales presentation.
compensation method
the salesperson replies "yes, but..." and then explains the product's benefits or features that answer the customer's objection. -used when the customer's objection is partially true
mission-sharing
two organizations develop a common mission and share resources to accomplish that mission. -resembles a joint venture as much as a selling relationship.
Data mining involves
using computer data analysis software to study data to find meaningful information and help build relationships.
Research indicates that a _____ ratio reward schedule is superior to regularly scheduled rewards in motivating additional purchases. A variable ratio means that _____. They do not know exactly when a reward will be given or the size of the incentive. The random reward schedule should be frequent enough to encourage them to make ongoing purchases.
variable; customers receive intermittent reinforcements
