Direct Marketing

Direct marketing Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a website, then the effort is considered to be direct response advertising.

History The term direct marketing is believed to have been first used in 1961 in a speech by Lester Wunderman, who pioneered direct marketing techniques with brands such as American Express and Columbia Records.[citation needed] The term junk mail, referring to unsolicited commercial ads delivered via post office or directly deposited in consumers' mail boxes, can be traced back to 1954.[1] The term spam, meaning "unsolicited commercial email", can be traced back to March 31, 1993,[2] although in its first few months it merely referred to inadvertently posting a message so many times on UseNet that the repetitions effectively drowned out the normal flow of conversation. Although Wunderman may have been the first to use the term direct marketing, the practice of mail order selling (direct marketing via mail) essentially began in the U.S. upon invention of the typewriter in 1867.[citation needed] The first modern mail-order catalog was produced by Aaron Montgomery Ward in 1872.[citation needed] The Direct Mail Advertising Association, predecessor of the present-day Direct Marketing Association, was first established in 1917.[citation needed] Third class bulk mail postage rates were established in 1928.[citation needed] Direct marketing's history in Europe can be traced to the 15th century. Upon Gutenberg's invention of movable type, the first trade catalogs from printer-publishers appeared sometime around 1450.[citation needed]

Benefits and drawbacks Direct marketing is attractive to many marketers, because in many cases its positive effect (but not negative results) can be measured directly. For example, if a marketer sends out one million solicitations by mail, and ten thousand customers can be tracked as having responded to the promotion, the marketer can say with some confidence that the campaign led directly to the responses. The number of recipients who are offended by the junk mail/spam, however, is not easily measured. By contrast, measurement of other media must often be indirect, since there is no direct response from a consumer. Measurement of results, a fundamental element in successful direct marketing, is explored in greater detail elsewhere in this article. Yet since

the start of the Internet-age the challenges of Chief Marketing Executives (CMOs) are tracking direct marketing responses and measuring results.[citation needed] While many marketers like this form of marketing, some direct marketing efforts using particular media have been criticized for generating unwanted solicitations. For example, direct mail that is irrelevant to the recipient is considered junk mail, and unwanted email messages are considered spam. Some consumers are demanding an end to direct marketing for privacy and environmental reasons,[citation needed] which direct marketers are able to provide by using "opt out" lists, variable printing and more targeted mailing lists.

Channels Some direct marketers also use media such as door hangers, package inserts, magazines, newspapers, radio, television, email, internet banner ads, pay-per-click ads, billboards, transit ads. And according to Ad Age, "In 2005, U.S. agencies generated more revenue from marketing services (which include direct marketing) than from traditional advertising and media."[citation needed]

Direct mail Main article: Advertising mail See also: Direct mail fundraising The most common form of direct marketing is direct mail,[citation needed] sometimes called junk mail, used by advertisers who send paper mail to all postal customers in an area or to all customers on a list. Typical junkmail. Any low-budget medium that can be used to deliver a communication to a customer can be employed in direct marketing. Probably the most commonly used medium for direct marketing is mail, in which marketing communications are sent to customers using the postal service. The term direct mail is used in the direct marketing industry to refer to communication deliveries by the Post Office, which may also be referred to as "junk mail" or "admail" and may involve bulk mail. Junk mail includes advertising circulars, catalogs, free trial CDs, pre-approved credit card applications, and other unsolicited merchandising invitations delivered by mail or to homes and businesses, or delivered to consumers' mailboxes by delivery services other than the Post Office. Bulk mailings are a particularly popular method of promotion for businesses operating in the financial services, home computer, and travel and tourism industries. In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. In the United States and United Kingdom, for example, there are bulk mail rates that enable marketers to send mail at rates that are substantially lower than regular first-class rates. In order to qualify for these rates, marketers must format and sort the mail in particular ways - which reduces the handling (and therefore costs) required by the postal service.

Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out following database analysis to select recipients considered most likely to respond positively. For example a person who has demonstrated an interest in golf may receive direct mail for golf related products or perhaps for goods and services that are appropriate for golfers. This use of database analysis is a type of database marketing. The United States Postal Service calls this form of mail "advertising mail" (admail for short).

Telemarketing The second most common form of direct marketing is telemarketing,[citation needed] in which marketers contact consumers by phone. The unpopularity of cold call telemarketing (in which the consumer does not expect or invite the sales call) has led some US states and the US federal government to create "no-call lists" and legislation including heavy fines. This process may be outsourced to specialist call centres. In the US, a national do-not-call list went into effect on October 1, 2003. Under the law, it is illegal for telemarketers to call anyone who has registered themselves on the list. After the list had operated for one year, over 62 million people had signed up.[3] The telemarketing industry opposed the creation of the list, but most telemarketers have complied with the law and refrained from calling people who are on the list.[citation needed] Canada has passed legislation to create a similar Do Not Call List. In other countries it is voluntary, such as the New Zealand Name Removal Service.

Email Marketing Email Marketing may have passed telemarketing in frequency at this point,[citation needed] and is a third type of direct marketing. A major concern is spam, which actually predates legitimate email marketing. As a result of the proliferation of mass spamming, ISPs and email service providers have developed increasingly effective E-Mail Filtering programs. These filters can interfere with the delivery of email marketing campaigns, even if the person has subscribed to receive them,[4] as legitimate email marketing can possess the same hallmarks as spam.

Door to Door Leaflet Marketing Leaflet Distribution services are used by extensively by the fast food industries, and many other business focussing on a local catchment Business to consumer business model, similar to direct mail marketing, this method is targeted purely by area, and costs a fraction of the amount of a mailshot due to not having to purchase stamps, envelopes or having to buy address lists and the names of home occupants.

Broadcast faxing A fourth type of direct marketing, broadcast faxing, is now less common than the other forms. [citation needed] This is partly due to laws in the United States and elsewhere which make it illegal. [citation needed]

Voicemail Marketing

A fifth type of direct marketing has emerged out of the market prevalence of personal voice mailboxes, and business voicemail systems. Due to the ubiquity of email marketing, and the expense of direct mail and telemarketing, voicemail marketing presented a cost effective means by which to reach people with the warmth of a human voice. Abuse of consumer marketing applications of voicemail marketing resulted in an abundance of "voice-spam", and prompted many jurisdictions to pass laws regulating consumer voicemail marketing. More recently, businesses have utilized guided voicemail (an application where pre-recorded voicemails are guided by live callers) to accomplish personalized business-to-business marketing formerly reserved for telemarketing. Because guided voicemail is used to contact only businesses, it is exempt from Do Not Call regulations in place for other forms of voicemail marketing.

Couponing Couponing is used in print media to elicit a response from the reader. An example is a coupon which the reader cuts out and presents to a super-store check-out counter to avail of a discount. Coupons in newspapers and magazines cannot be considered direct marketing, since the marketer incurs the cost of supporting a third-party medium (the newspaper or magazine); direct marketing aims to circumvent that balance, paring the costs down to solely delivering their unsolicited sales message to the consumer, without supporting the newspaper that the consumer seeks and welcomes.

Direct response television marketing Direct marketing on TV (commonly referred to as DRTV) has two basic forms: long form (usually half-hour or hour-long segments that explain a product in detail and are commonly referred to as infomercials) and short form which refers to typical 0:30 second or 0:60 second commercials that ask viewers for an immediate response (typically to call a phone number on screen or go to a website). TV-response marketing—i.e. infomercials—can be considered a form of direct marketing, since responses are in the form of calls to telephone numbers given on-air. This both allows marketers to reasonably conclude that the calls are due to a particular campaign, and allows the marketers to obtain customers' phone numbers as targets for telemarketing. Under the Federal Do-Not-Call List rules in the US, if the caller buys anything, the marketer would be exempt from Do-Not-Call List restrictions for a period of time due to having a prior business relationship with the caller. Major players are firms like QVC, Thane Direct, and Interwood Marketing Group then cross-sell, and up-sell to these respondents. One of the most famous DRTV commercials was for Ginsu Knives by Ginsu Products, Inc. of RI. Several aspects of ad, such as it's use of adding items to the offer and the guarantee of satisfaction were much copied and came to be considered part of the formula for success with short form direct response TV ads (DRTV)

Direct selling Direct selling is the sale of products by face-to-face contact with the customer, either by having salespeople approach potential customers in person, through indirect means such as Tupperware parties.

Integrated Campaigns For many marketers, a comprehensive direct marketing campaign employs a mix of channels. It is not unusual for a large campaign to combine direct mail, telemarketing, radio and broadcast TV, as well as online channels such as email, search marketing, social networking and video. In a report[5] conducted by the Direct Marketing Association, it was found that 57% of the campaigns studied were employing integrated strategies. Of those, almost half (47%) launched with a direct mail campaign, typically followed by e-mail and then telemarketing.

See also • • • • • • • • •

Direct response marketing Database marketing Direct mail Customer relationship management Direct Marketing Associations Personalized marketing Predictive analytics Telephone Preference Service Leaflet Distribution

References 1. ^ Entry for junk, Online Etymology Dictionary. Retrieved February 19, 2008. 2. ^ Origin of the term "spam" to mean net abuse, Brad Templeton's website. Retrieved

February 19, 2008. 3. ^ National Do Not Call Registry Celebrates One-Year Anniversary, Federal Trade

Commission, June 24, 2004. Retrieved February 19, 2008. 4. ^ What is a "Whitelist" and why do I want to work with a "Whitelisted" Mail Distributor? 5. ^ "The Integrated Marketing Mix," Use of digital Media Rising, 'BtoB Magazine,' July 14, 2008

6. Direct mail fundraising is a form of direct marketing widely used by nonprofit

organizations in North America and Europe to recruit or "acquire" new donors or members and to inform, cultivate, resolicit, and "upgrade" the level of their contributions or dues. The technique has been shown to work equally well in many other countries across the globe. Its use is spreading quickly. 7. The professional use of direct mail fundraising requires an understanding both of the principles and practice of direct marketing and of the discipline of fundraising. In direct marketing, practitioners view large numbers of prospects or donors through the

lens of statistics. Fundraising teaches us how to view prospects or donors as individuals, with unique values, beliefs, and preferences.

8. History 9. The practice of direct mail fundraising is rooted in experiences many centuries old.

Published examples can be found as early as 12th century Japan as well as in the correspondence of abolitionists in 18th and 19th Century Great Britain.

10.History and growth in the United States 11. However, in its modern form, direct mail fundraising appeared in the United States

only after World War II, when nationwide charities such as the National Easter Seal Society sought ways to broaden their fundraising base. 12. It was only with the advent in the 1960s of the ZIP Code and, later, the computer that direct mail fundraising began to gain wide use. Before the ZIP code, it was difficult to target appropriate recipients of direct mail fundraising appeals, and before the computer, compiling and maintaining lists of supporters was tedious and costly. During the 1970s, when computers became increasingly affordable, the use of direct mail fundraising spread widely. It quickly became the means by which most Americans learned about and first provided financial support for their charities of choice. 13. The explosive growth of the nonprofit sector in the United States — quadrupling in the 1980s and doubling again in the 1990s and early 2000s — led to a massive expansion in the use of direct mail to build and sustain large, nationwide donor and membership lists. Today, direct mail fundraising accounts for at least one-fifth of the more than $250 billion contributed annually in the U.S. to the nation's 1.6 million nonprofit organizations.[citation needed]

Advertising mail Advertising mail, also known as direct mail, junk mail, or admail, is the delivery of advertising material to recipients of postal mail.[1][2] The delivery of advertising mail forms a large and growing service for many postal services, and direct mail marketing forms a significant portion of the direct marketing industry. Some organizations attempt to help people opt-out of receiving advertising mail, in many cases motivated by a concern over its negative environmental impact. Advertising mail includes advertising circulars, catalogs, CDs, “pre-approved” credit card applications, and other commercial merchandising materials delivered to both homes and businesses. It may be addressed to pre-selected individuals, or unaddressed and delivered on a neighbourhood-by-neighbourhood basis.[3][4]

Postal services 1928 direct mail advertising letter offering mail delivery of fish and seafood

Postal systems have enacted lower rates for buyers of bulk mail permits. In order to qualify for these rates, marketers must format and sort the mail in specific ways - which reduces the handling required by the postal service.[5] Income from advertising mail represents a significant and growing portion of some postal service's budgets, and it is a service actively marketed by them.[6] In Canada, addressed and unaddressed advertising mail accounted for 20% of Canada Post's revenue in 2005,[7] and the share is increasing.[8] Postal services employ the terms advertising mail, admail, and direct mail, while avoiding and objecting to the pejorative term junk mail.[9][10] In many developed countries, advertising mail represents a significant and growing amount of the total volume of mail. In the United States, "Standard mail: advertising" comprised 29% of all mail in 1980 and 43% in 2003.[11]

Direct mail marketing Design and format Direct mail permits the marketer to design marketing pieces in many different formats. Indeed, there is an entire subsector of the industry that produces specialized papers, printing, envelopes, and other materials for direct mail marketing. Some of the common formats include: • •

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Catalogs: Multi-page, bound promotions, usually featuring a selection of products for sale. Self-mailers: Pieces usually created from a single sheet that has been printed and folded. For instance, a common practice is to print a page-length advertisement or promotion on one side of a sheet of paper. This is then folded in half or in thirds, with the promotional message to the inside. The two outside surfaces are then used for the address of the recipient and some "teaser" message designed to persuade the customer to open the piece. Clear bag packages: Large (often 9x12 or bigger) full-color packages sealed in a clear, plastic outer wrap. The contents show through the clear bag, giving the potential for maximum initial impact. Clear bag packages can be extremely effective and are very affordable based upon the campaign open-rate.[citation needed] Postcards: Simple, two-sided pieces, with a promotional message on one side and the customer's address on the other. Envelope mailers: Mailings in which the marketing material is placed inside an envelope. This permits the marketer to include more than one insert. When more than one advertiser is included, this is often called "marriage mail". Valpak is one of the largest examples of a marriage mail service. Snap Mailers: Mailers that fold and seal with pressure. The sides detach and the mailer is opened to reveal the message. Dimensional Mailers: Mailers that have some dimension to them, like a small box. Intelligent Documents: Programmable mail pieces built dynamically from database information, and printed digitally for faster production.

Advantages and disadvantages Many people respond positively to direct mail advertising and find useful goods and services on offer. Traditionally, this was more true in rural areas where people had to travel many miles to do their shopping and direct mail and mail order shopping was a major convenience. However, some people dislike it, in the same way as with telemarketers' calls and, as noted above, e-mail spam, and some jurisdictions like the US have laws requiring junk mailers to withhold their offerings from residents who opt out. Advantages for marketers include the following: •

Targeting - Historically, the most important aspect of direct mail was its ability to precisely target previous customers. If a suitable list was available, it could do a good job of targeting prospects.

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Personalization - Direct mail can address the customer personally and be tailored to their needs based on previous transactions and gathered data.

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Optimization - Because of its direct accountability, direct mail can be tested to find the best list; the best offer; the best timing (and many other factors). Then the winning tests can be rolled out to a wider audience for optimal results.

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Analysis - The bulk mailing is large enough to allow statistical analyses. For example the results can be analysed to see in detail the performance of individual offers in say a squinch report which shows sales per square inch. With suitable media or source codes, the performance of lists can be captured. These enable better selection of offers and lists for future mailings.

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Accumulation - Responses (and non-responses) can be added to the database, allowing future mailings to be better targeted.

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Advocates make the following arguments ... o Efficient use of advertising dollars o Highly selective, targeted and personalized o Flexible o High quality reproduction o Response easily measured  87% of consumers are either “very” or “quite” satisfied with the products they buy through Direct Mail  56% of consumers said that value for money was the main benefit of buying through Direct Mail, whilst 63% said convenience.

Disadvantages include: •

Cost - The cost per thousand will be higher than almost any other form of mass promotion (although the wastage rate may be much lower). Also, development costs in database acquisition/development. It is however important to note that despite the production and development costs, direct mail can be very profitable, if executed correctly. Lastly, when comparing different media costs, return on investment is the best measure.

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Waste - Large quantities of paper and plastic are thrown away (see below).

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Alienation - Some recipients resent direct marketing being "forced" upon them, and boycott companies that do so. Moreover, they may obtain Prohibitory Orders against companies whose direct marketing mail they find offensive.

Targeting Advertisers often call direct mail "targeted mailing", since mail is usually sent out following database analysis. For example a person who purchases golf supplies may receive direct mail for golf related products or perhaps for goods and services that are appropriate for golfers. When direct mail uses database analysis, it is a type of database marketing. Advances in computing and communications technology have significantly impacted the direct mailing industry in recent years. As computers become more powerful and databases become larger, new opportunities arise for direct mail companies to perform more in-depth processing of their mailing lists. Mailings can be targeted based on location and demographic data. This allows mailings to be targeted more specifically and potentially increases response rates. Web sites are appearing which allow clients to create their mailing lists interactively using map-based interfaces.

Personalized URLS Personalized URLs, also known as PURLs, are personalized websites used in conjunction with direct mail that are designed to gather information about the person that visits it. Marketing companies find this useful when testing marketing methods and response rates. Personalized URLs are generally printed on the direct mail piece in the format JohnSample.domain.com or domain.com/JohnSample. They recognize the individual who is visiting the site and can welcome them by name. They also have the ability to obtain and disperse detailed and specific information pertaining to the individual looking at the site.[12] Personalized URLs are assigned to individual recipients based on the direct mail campaign database and are included either as the only variable or as one of several variable fields in the larger variable data printing communication. When recipients of the direct mail piece log onto their PURL, the information from the campaign database is used to tailor the web page experience to that specific recipient. They are referenced by name, and the graphics, text, offers, and other information on the page can also be tailored to them personally, based on the information in the marketer's database.Studies have shown that people prefer to get additional information online, so Personalized URLs create a seamless way to connect the printed piece to the Web.[citation needed]

Business-to-Business Mailings (B2B) Business products and services have long used direct mail to promote themselves. Traditionally, this worked in one of two ways. As a direct sale, therefore precluding the use of a salesperson or a retail store, or as a method of generating leads for a salesforce. The former method was ideally used by products that were easy to sell, were familiar to the prospect and needed no demonstration. The latter method was used for large ticket items or for those that needed demonstration for example.

Opting out Several organizations offer opt-out services to people who wish to reduce or eliminate the amount of addressed advertising mail they receive. In the United Kingdom, the Mailing Preference Service[13] allows people to register with them for removal from posted as opposed to hand delivered mail. In the United States, the Direct Marketing Association's Mail Preference Service[14] functions similar to telemarketing do not call registries, though mailer participation is voluntary. Several nonprofit organizations, such as 41pounds.org, offer optout services as well.[15] Some organizations are lobbying for a mandatory Do Not Mail registry in the U.S., similar to the United States National Do Not Call Registry.[16] In response to a US Supreme Court ruling (Rowan v. Post Office Dept.[17]), the United States Postal Service provides enables an applicant to obtain a Prohibitory Order, which gives consumers the power to stop non-governmental organizations from sending them mail, and to demand such organizations remove the consumers’ information from their mailing lists. In Canada, the highly-publicized Red Dot Campaign[18] offers advice on reducing unaddressed advertising mail. The campaign focuses on advertising the Canada Post policy to respect "No Junkmail" signs, noting that this policy is not promoted by Canada Post itself. The name "red dot" refers to an internal marker used by Canada Post to indicate which households do not wish to receive unaddressed admail.[8] [19] [20] The UK Royal Mail also offers an opt-out service, though it sparked public outrage by warning that unaddressed government mailings could not be separated from advertisements, and those who opted-out of the latter would stop receiving the former as well.[21] Several websites critical of junk mail have guides for people interested in reducing the amount of junk mail they get, such as the Center for a New American Dream[22] and SimpleStop.

Environmental impact Several of the above organizations, as well as environmental groups, express concern about the environmental impact generated by junk mail. In the US, the Environmental Protection Agency estimates that 44% of junk mail is discarded without being opened or read, equaling four million tons of waste,[23] with 32% recovered for recycling.[24] Further, the Ohio Office of Compliance Assistance and Pollution Prevention (OCAPP) estimates that 250,000 homes could be heated for a single day's junk mail.[25] In the UK, the Minister of State responsible for the Department for Environment, Food and Rural Affairs estimated that "direct mail and promotions" accounted for between 500,000 and 600,000 tonnes of paper in 2002, with 13% being recycled.[26] The government and the Direct Marketing Association (UK) together agreed on recycling targets for the direct mail industry, including a goal of 55% by 2009, though the DMA's latest estimates are that the industry will fall well short off this mark.[27]

References 1. ^ "Direct mail", Merriam-Webster Online, 2008 2. ^ "Junk mail", Merriam-Webster Online, 2008

3. ^ "Canada Post - Unaddressed Admail". Retrieved on 2008-02-27. 4. ^ "India Post - Direct Post". Retrieved on 2008-02-27. 5. ^ "United States Postal Service Tips for Using a Postage Meter for Bulk Mailings"

(2008-02-27). 6. ^ See e.g. "Royal Mail - Reach your customers with Direct Mail" (2008-02-27). 7. ^ "Canada Post chief seeks to boost profit", CBC, CBC (2006-06-13). Retrieved on 28 February 2008. 8. ^ a b "Website shows way to stop Canada Post junk mail", CTV.ca, CTV (2008-02-11). Retrieved on 28 February 2008. 9. ^ "USPS defends junk mail" (2008-02-27). 10. ^ "Canada Post Letter to the Editor" (2008-02-27). 11. ^ Schmid, Greg (May 2003). "Two Scenarios of Future Mail Volumes" (PDF). U.S. Department of the Treasury. Retrieved on 2008-02-27. 12. ^ "Purls of Wisdom". Retrieved on 2008-04-28. 13. ^ "MPS online". Retrieved on 2008-02-27. 14. ^ "Mail Preference Service DMA’s Mail Preference Service". Retrieved on 2008-0227. 15. ^ See e.g. Green, Chuck (2006-09-25). "The direct mail stops here: New company 41pounds.org helps people halt the deluge", Waste News. 16. ^ http://www.donotmail.org 17. ^ "Rowan v. United States Post Office". 18. ^ "Red Dot Campaign". Retrieved on 2008-02-27. 19. ^ "Website promotes red dots to stop junk mail", CBC.ca, CBC (2008-01-31). Retrieved on 27 February 2008. 20. ^ "Campaign seeks to save paper by refusing junk mail", canada.com, CanWest (2008-02-10). Retrieved on 27 February 2008. 21. ^ Barrow, Becky (2006-08-29). "Anger over Royal Mail's junk mail warning". Retrieved on 27 February 2008. 22. ^ See e.g. Ryan, Terri Jo (2007-08-06). "You're pre-approved to dunk the junk!", The Virginian-Pilot & The Ledger-Star., "How to Junk Junk Mail and Other Paper Clutter", The Washington Post (2008-01-20). 23. ^ EPA Junk Mail Reduction 24. ^ Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2003, EPA, 2005, http://www.epa.gov/msw/pubs/msw03rpt.pdf 25. ^ Ohio OCAPP 26. ^ "House of Commons Hansard Written Answers for 16 October 2003 (pt 4)". Retrieved on 2008-03-13. 27. ^ Hoffbrand, Jenny. "DMA: Recycling targets ‘miles away’", Precision Marketing.

The purposes of Direct Marketing Associations The purposes are generally .. • • • • •

Promoting direct marketing techniques and companies to consumers. Fighting negative images of the direct marketing industry. Providing training and professional development opportunities to marketers. Conducting industry research. Hosting networking conferences for marketers.

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Promoting direct marketing, informing consumers of the safeguards that exist, and promoting the DMA as their protector, contact point and regulator. Trying to ensure that their members create consumer confidence. Advising how companies should use information by operating within the terms of Data Protection Acts. Lobbying against Data Protection Acts which protect data against redistribution. Lobbying against laws forbidding e-mail address harvesting.

Controversy Direct Marketing Associations have attracted controversy, as they purport to defend and promote spam, junk mail, and telemarketing, which many consumers find irritating and intrusive. The DMA has a political action committee that makes political contributions in order to further its causes. The DMA asserts that the mass-mailings done by its members are both economically and environmentally beneficial (the latter because they supposedly reduce the number of car trips taken by shoppers who would otherwise shop at conventional stores). Telemarketing legislation: The United States telemarketing industry was affected by a national do-not-call list, which went into effect on October 1, 2003. Under the law, it is illegal for telemarketers to call anyone who has registered themselves on the list. After the list had operated for one year, over 62 million people had signed up [1]. The telemarketing industry opposed the creation of the list, but most telemarketers have complied with the law and refrained from calling people who are on the list. Canada has passed legislation to create a similar Do Not Call List. In other countries it is voluntary, such as the New Zealand Name Removal Service.

FEDERATION OF EUROPEAN DIRECT AND INTERACTIVE MARKETING - Your unique resource for pan-European direct and interactive marketing The Federation of European Direct and Interactive Marketing (FEDMA) was created in 1997 by a merger two bodies-the European Direct Marketing Association (est. 1976) and Federation of European Direct and Interactive Marketing (est. 1992). FEDMA is the single voice of the European direct and interactive marketing industry. Its national members are direct marketing associations (DMAs) representing users, service providers and media/carriers of direct marketing. FEDMA also has more than 200 direct company members.

Today, direct marketing strategies (via mail, telephone, Internet and direct response) are an essential tool for companies to approach, inform and retain customers, as well as providing customer relationship services. The development of sophisticated databases, telemarketing and e-marketing has made direct marketing increasingly popular as a marketing strategy and has encouraged strong investment. The direct marketing sector represents an annual expenditure of over 100 billion euro and employs over 2 million people directly, and many more indirectly, within the EU.

Database marketing From Wikipedia, the free encyclopedia Jump to: navigation, search Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing. The distinction between direct and database marketing stems primarily from the attention paid to the analysis of data. Database marketing emphasizes the use of statistical techniques to develop models of customer behavior, which are then used to select customers for communications. As a consequence, database marketers also tend to be heavy users of data warehouses, because having a greater amount of data about customers increases the likelihood that a more accurate model can be built. The "database" is usually name, address, and transaction history details from internal sales or delivery systems, or a bought-in compiled "list" from another organization, which has captured that information from its customers. Typical sources of compiled lists are charity donation forms, application forms for any free product or contest, product warranty cards, subscription forms, and credit application forms. The communications generated by database marketing may be described as junk mail or spam, if it is unwanted by the addressee. Direct and database marketing organizations, on the other hand, argue that a targeted letter or e-mail to a customer, who wants to be contacted about offerings that may interest the customer, benefits both the customer and the marketer. Some countries and some organizations insist that individuals are able to prevent entry to or delete their name and address details from database marketing lists.

Sources of data Although organizations of any size can employ database marketing, it is particularly wellsuited to companies with large numbers of customers. This is because a large population provides greater opportunity to find segments of customers or prospects that can be communicated with in a customized manner. In smaller (and more homogeneous) databases, it will be difficult to justify on economic terms the investment required to differentiate messages. As a result, database marketing has flourished in sectors, such as financial services, telecommunications, and retail, all of which have the ability to generate significant amounts transaction data for millions of customers. Database marketing applications can be divided logically between those marketing programs that reach existing customers and those that are aimed at prospective customers.

Consumer data

In general, database marketers seek to have as much data available about customers and prospects as possible. For marketing to existing customers, more sophisticated marketers often build elaborate databases of customer information. These may include a variety of data, including name and address, history of shopping and purchases, demographics, and the history of past communications to and from customers. For larger companies with millions of customers, such data warehouses can often be multiple terabytes in size. Marketing to prospects relies extensively on third-party sources of data. In most developed countries, there are a number of providers of such data. Such data is usually restricted to name, address, and telephone, along with demographics, some supplied by consumers, and others inferred by the data compiler. Companies may also acquire prospect data directly through the use of sweepstakes, contests, on-line registrations, and other lead generation activities.

Business data For many business-to-business (B2B) company marketers, the number of customers and prospects will be smaller than that of comparable business-to-consumer (B2C) companies. Also, their relationships with customers will often rely on intermediaries, such as salespeople, agents, and dealers, and the number of transactions per customer may be small. As a result, business-to-business marketers may not have as much data at their disposal as business-toconsumer marketer are accustomed. One other complication is that B2B marketers in targeting teams or "accounts" and not individuals may produce many contacts from a single organization. Determining which contact to communicate with through direct marketing may be difficult. On the other hand it is the database for business-to-business marketers which often includes data on the business activity about the respective client. These data become critical to segment markets or define target audiences, e.g. purchases of software license renewals by telecom companies could help identify which technologist is in charge of software installations vs. software procurement, etc. Customers in Business-toBusiness environments often tend to be loyal since they need after-sales-service for their products and appreciate information on product upgrades and service offerings. This loyalty can be tracked by a database. Sources of customer data often come from the sales force employed by the company and from the service engineers. Increasingly, online interactions with customers are providing B2B marketers with a lower cost source of customer information. For prospect data, businesses can purchase data from compilers of business data, as well as gather information from their direct sales efforts, on-line sites, and specialty publications.

Analytics and modeling Companies with large databases of customer information risk being "data rich and information poor." As a result, a considerable amount of attention is paid to the analysis of

data. For instance, companies often segment their customers based on the analysis of differences in behavior, needs, or attitudes of their customers. A common method of behavioral segmentation is RFM, in which customers are placed into subsegments based on the recency, frequency, and monetary value of past purchases. Van den Poel (2003) gives an overview of the predictive performance of a large class of variables typically used in database-marketing modeling. They may also develop predictive models, which forecast the propensity of customers to behave in certain ways. For instance, marketers may build a model that rank orders customers on their likelihood to respond to a promotion. Commonly employed statistical techniques for such models include logistic regression and neural networks.

Laws and regulations As database marketing has grown, it has come under increased scrutiny from privacy advocates and government regulators. For instance, the European Commission has established a set of data protection rules that determine what uses can be made of customer data and how consumers can influence what data are retained. In the United States, there are a variety of state and federal laws, including the Fair Credit Reporting Act, or FCRA, (which regulates the gathering and use of credit data), the Health Insurance Portability and Accountability Act (HIPAA) (which regulates the gathering and use of consumer health data), and various programs that enable consumers to suppress their telephones numbers from telemarketing.

Advances In Database Marketing While the idea of storing customer data in electronic formats to use them for databasemarketing purposes has been around for decades, the computer systems available today make it possible to gain a comprehensive history of client behavior on-screen while the business is transacting with each individual, producing thus real-time business intelligence for the company. This ability enables what is called one-to-one marketing or personalization. Today's Customer Relationship Management (CRM) systems use the stored data not only for direct marketing purposes but to manage the complete relationship with individual customer contacts and to develop more customized product and service offerings. However, a combination of CRM, content management and business intelligence tools are making delivery of personalized information a reality. Marketers trained in the use of these tools are able to carry out customer nurturing, which is a tactic that attempts to communicate with each individual in an organization at the right time, using the right information to meet that client's need to progress through the process of identifying a problem, learning options available to resolve it, selecting the right solution, and making the purchasing decision. Because of the complexities of B2B marketing and the intricacies of corporate operations, the demands placed on any marketing organization to formulate the business process by which such a sophisticated series of procedures may be brought into existence are significant. It is often for this reason that large marketing organizations engage the use of an expert in marketing process strategy and information technology (IT), or a marketing IT process strategist. Although more technical in nature than often marketers require, a system integrator

(SI) can also play an equivalent role to the marketing IT process strategist, particularly at the time that new technology tools need to be configured and rolled out. New advances in cloud computing and marketing's penchant for both outsourcing services to third-party agencies and avoiding involvement in the creation of complex technological tools has provided a fertile soil for Software as a Service (SaaS) providers to centralize the marketing database under a hosting service model that incorporates functions from CRM, content management and business intelligence under one offering to automate the marketing process.

See also • •

Customer Relationship Management Lifetime value

References •

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Baesens Bart, Stijn Viaene, Dirk Van den Poel, Jan Vanthienen, and Guido Dedene (2002), “Bayesian Neural Network Learning for Repeat Purchase Modelling in Direct Marketing”, European Journal of Operational Research, 138 (1), 191-211. Optimal Database Marketing, Drake & Drozdenko, Sage Publications (2002) Hughes, Arthur M. (2000), Strategic Database Marketing: The Masterplan for Starting and Managing a Profitable Customer-Based Marketing Program, 2nd edition, McGraw-Hill, New York. David Shepard Associates (1999), The New Direct Marketing: How to Implement A Profit-Driven Database Marketing Strategy, 3rd edition, McGraw-Hill, New York. Hillstrom, Kevin (2006), Hillstrom's Database Marketing, Direct Academy Peppers, Don and Rogers, Martha (1996), The One to One Future (One to One), Current. Prinzie Anita, Dirk Van den Poel (2005), "Constrained optimization of data-mining problems to improve model performance: A direct-marketing application", Expert Systems with Applications, 29 (3), 630-640. Tapp, Alan (1998), Principles of Direct and Database Marketing, Trans-Atlantic Publications. Prenner, John (2000), ROI Driven Database Marketing, UC Press Van den Poel Dirk (2003), “Predicting Mail-Order Repeat Buying: Which Variables Matter?”, Tijdschrift voor Economie & Management, 48 (3), 371-403. Munoz, Arturo F (2008), "Why Successful Marketing In A Recession Requires A Solid Marketing IT Process Strategy"

Direct response marketing From Wikipedia, the free encyclopedia Direct response marketing is a form of marketing designed to solicit a direct response which is specific and quantifiable. The delivery of the response is direct between the viewer and the

advertiser, that is, the customer responds to the marketer directly. This is in contrast to direct marketing in which the marketer contacts the potential customer directly. In direct marketing (such as telemarketing), there is no intermediary broadcast media involved. In direct response marketing, marketers use broadcast media to get customers to contact them directly. It is direct response marketing because the communications from the customer to the marketer are direct, this differentiates it from simple direct marketing in which the communications from the marketer to the customer are direct, but do not allow for instant feedback. Like direct marketing, direct response seeks to elicit action. It is inherently accountable since results can be tracked and measured. Furthermore, direct response campaigns perform best if the underlying strategies and tactics are highly competitive.

Characterized By Direct response advertising is characterized by four primary elements: • • • •

An offer Sufficient information for the consumer to make a decision whether to act An explicit "call to action" Means of response (typically multiple options such as a toll free number, web page, and email.)

Media One common form of direct response marketing today is the infomercial. Companies such as Script to Screen, Hawthorne Direct, Guthy Renker[1] and International Shopping Network specialize in infomercials. Infomercials are also known as direct response TV commercials. Short form direct response commercials have time lengths ranging from 30 seconds to 2 minutes. Long form infomercials are 30 minutes long. Infomercials try to achieve a direct response via television presentations. Viewers respond via telephone or Internet, credit card in hand. Noted infomercial personalities include Cher, George Foreman (with the George Foreman Grill), fitness guru Jack Lalanne, inventor / salesman Ron Popeil, Billy Mays, Tony Robbins, and Vince Offer. An offshoot of the infomercial is the home shopping industry. In this medium, a home shopping host will showcase a product directly to the viewer, and encourage them to purchase the item. Noted pioneers in this industry include the first home shopping host, Bob Circosta; Bud Paxson and Roy Speer, founders of the first home shopping channel HSN; and Joseph Segel who founded America's most successful home shopping channel QVC. Other media, such as magazines, newspapers, radio, and e-mail can be used to elicit the response, but they tend to achieve lower response rates than television. Mail order describes a form of direct response in which customers respond by mailing a completed order form to the marketer. Mail order is slow and response rates are low. It has been eclipsed by toll-free telephone numbers and the internet.

While certain media, as mentioned above, are commonly used in direct response campaigns, in fact, direct response is media neutral, provided the campaign comprises the four main elements of direct response, it classifies as such. Furthermore, direct response is organization neutral, which is to say that it is practiced by organizations of all types and sizes, regardless of industry.

Principles Direct response ads like infomercials can be contrasted with normal television commercials because traditional commercials normally do not solicit a direct immediate response from the viewer, but instead try to brand their product in the market place. Improving the appeal and uniqueness of an offer is a first step for improving response. An offer must be targeted such that its appeal is relevant to the wants or needs of the audience, so the choice of media or list carries similar importance as the perceived value of the offer. There are many other best practices and techniques used to achieve results including but not limited to the use of urgency, clear and compelling copy, and graphics and design which reinforce the message.