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DIRECT MARKETING

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This presentation shall help you with the basics of the Direct Marketing to boost Revenue. As a management faculty this presentation was prepared for academic purposes having practical insights.

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DIRECT MARKETING

  1. 1. Direct Marketing to Boost Revenue
  2. 2. What is Direct Marketing? Direct Marketing is both marketing and sales. Direct Marketing is the translation of one-on-one, face- to-face selling into broad reach media. Definition: Any advertising activity which creates and exploits a direct relationship between you and your prospect or customer as an individual.
  3. 3. Difference from other activities?  General advertising speaks to people en masse. It does not try to isolate them as individuals. Nor does it normally demand immediate action.  Sales promotion is designed to achieve an immediate effect on sales. It does not build relationship.  Public relations employs media controlled by others.  Packaging is again devoid of any relationships.
  4. 4. Direct Marketing is always selling  Product / Service / Next Step  Response  Continued Engagement
  5. 5. Mass Targeted Competitive Attention Selective Attention Breadth Depth Remember Respond Impression Decision Pay for Everyone Pay for Targets General Advertising and Direct Mail – A Simple Comparison Advertising Direct Marketing
  6. 6. Two Important Factors in DM  Pre-selection Refining the target based on pre-existing level of interest  The Offer What does it take to provoke response?
  7. 7. The Relative Power of Media  Likeability  Demands Time  Expensive Weakness Face-to-Face Strengths  Sight  Sound  Eye Contact  Body Language  Interaction  Demo Ability  One-to-One  Provides Time  Pre-selection  No Attention Competition  Chemistry
  8. 8.  Sight  Pre-selection  Low attention competition Strengths Direct Mail  Easy not to engage  4 seconds to involve  Postal system dependent Weaknesses  List dependent The Relative Power of Media
  9. 9. The Relative Power of Media  Sound  Some Chemistry  Interaction  One-to-One  Pre-selection  Low Attention Competition Strengths  Interruptive  Requires Time  Annoying Weaknesses Telephone (Outbound)
  10. 10. Reasons for Growth in Direct Marketing
  11. 11. Some Unfortunate Truth About Direct Marketing  The more we need people to read (listen, watch), the less willing they are to do so.  The more resistant the universe, the more expensive the cost of buying sales time (choice of medium, and devices within each medium; offer)  Cost of persuasion power is inversely proportional to the level of pre-existing interest within a prospect universe  The more it costs to acquire a customer, the less valuable the customer.
  12. 12. Sales Support – The Sales Sequence  The sales sequence is the set of decision steps necessary to close a sale matched with a set of communications designed to provoke each step.  Direct Marketing tools are typically used to narrow the universe to “qualified prospects” .  DM sells the next step in the sequence.  The cost of acquisition is the total cost of all the contacts at each step necessary to provoke a single decision to the next step.
  13. 13. Cost of Acquisition in a Sales Sequence Step1: Lead Generation Step 2: Qualification Step 3: Sales Call Vehicle: Direct Mail Vehicle: Telephone Vehicle: Personal Selling 10,000 500 Universe: 50 Cost/Contact: 1.00 Cost/Contact: 10.00 Cost/Contact: 200.00 Response Rate: 5% Conversion to Appt. : 10% Conversion to Sale: 25% Cost/Conversion: 10,000/500 = 20 Cost/Appointment: 500 x 10 = 5,000/50 = 100 Cost/Sale: 50 x 200 = 10,000/13 = 770 Total Cost of Acquisition = 20 + 100 + 770 = 890
  14. 14. Common Sales Sequences Mail/Ad Phone Mail/Email Phone P Sales  Generate Interest  Qualify  Decision  Authority  Determine DM  Provide information or quote  Set appt.  See rep Phone Mail/Email Phone P Sales  Generate and Qualify  Id decision  Provide Info  Confirm Call Back Answer Q’s Set appt.  Demo  Close Sell the next step.
  15. 15. Direct Marketing Techniques
  16. 16. Selection Factors  Consumer Lists  Age / Income  Sex / Marital Status  Homeowner  Type of apartment  Interests  Presence of children  Geographical (zip, county, state)  Business Lists  Standard Industry Details  Employee Size  Annual Sales/Revenue  Title  Any other information Corporate information, number of years in business  Geographical (zip, county, state)  Tel / Fax / E-mail / Web  Credit information
  17. 17. Few Envelope Formats  Window Envelopes  Plastic Card  Invoice  Personal  Odd Size  Certified  See Through  Dimensional  Invitation  Handwritten  Readers Digest Used funny stamps and impressive stamps in their Direct Marketing Campaigns
  18. 18. Letter Planning and Structure  The Opening  The Body  The Close  The Signature  The P.S.
  19. 19. Writing Leads for Letters – How to Start  A strong, startling fact, research result, something true of their industry  Establish a connection  referral  similar occupation  status as a customer, etc.  recognition of status as a donor/contributor  Tell a story  A quote  Reference a competitor
  20. 20. Post-Call Follow-Up  Letters/email from the rep  New information (pricing, research, etc.)  Discount  Appeal rotation  Decision cycles
  21. 21. The Three Phases in the Lifetime of a Customer 1 Phase 2 Phase 3 Phase Relationship Formation Reinforce Decision Key to Source and Channel Relationship Cultivation Personalize Build Trust Quantify Potential Relationship Management Cross-Sell Fit Value Proposition to Customer Needs
  22. 22. The Second Transaction is Critical  Customers are converted or lost in the first 30 – 120 days  Create positive early experiences that cement the relationship  Fast shipping, delivery  Project Loyalty from early behavior  Provide opportunities for additional transactions while interest is high  Use communication to drive behavior and the relationship
  23. 23. Retaining/ Growing the Relationship at the Lowest Cost Customers Mailings A - Diamond 12x B - Gold 8x C - Silver 7x D - ? 6x
  24. 24. Recipients of Direct Mail  Customers  Have pre-existing interest, Will read more copy  Require less costly mail  Mailing to customers generates $ and improves retention  Prospects  Pre-existing interest is “likely”  Requires more expensive mail to buy readership  Resistant to reading (looking for a reason to stop)  Relevance is key  Influencers
  25. 25. Unfortunate Truths - Direct Mail  People read direct mail, looking for a reason to stop  The margin of error on direct mail is greater than in any other medium.  Special interest offerings tend to do best in direct mail, but the more specialized the interest, the more limited the growth potential (requires product proliferation – old/new/same).  There is an inverse relationship between degree of pre-existing interest and cost per response.  There is a direct relationship between readership and response.  People are not dying to hear from you.  Very little body copy is ever actually re-read.
  26. 26. Formulate your strategy  What is your overall business activity  What is your positioning?  What current marketing activities do you conduct?  What is the state of your database?  Have you sold the concept of Direct Marketing within your organization?  Where exactly Direct Marketing should fit in your organization
  27. 27. Formulate your Strategy / Campaign
  28. 28. Various Mediums available  Direct mail  Door to door drop  Newspapers  Magazines  Broadcasters: TV, Radio.  Telephone, Fax  Posters  Newsletters  Web as powerful medium………….Video mailers / Pod cast
  29. 29. Database is the Key
  30. 30. Successful Direct Marketers  American Express  Readers Digest  Eureka Forbes, Amway, etc.  Banks: HDFC, ICICI, Barclays and many others  Insurance companies: LIC, TATA AIG, MAX  Book Publishers: Sage Publications, etc  Magazines: India Today, Money Life, Business Today  Advertisements: Times of India, Sakal, etc.
  31. 31. The Last Premise Focus on Them “You can make more friends in 2 months by becoming interested in other people than you can in 2 years by trying to get people interested in you.” Dale Carnegie
  32. 32. References Commonsense Direct Marketing David Ogilvy And others
  33. 33. Q&A - Contact Avinash MurkuteAvinash Murkute Mobile: +91-9822698070 E-mail: avinash@galaxy4u.in Web: www.galaxy4u.in -------------------------------------------------------- Doubt is the key to knowledge.

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