fundamentals of direct marketing to consumers
TRANSCRIPT
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DM DAY 2001DM DAY 2001Fundamentals of Fundamentals of
Direct Marketing to ConsumersDirect Marketing to Consumers
John M. Coe
President
Database Marketing Associates
Scottsdale, AZ
480-778-9900
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My Objectives TodayMy Objectives Today
• Present to fundamentals of consumer direct marketing to you.
• Give you the opportunity to ask questions on issues or problems that you are facing today.
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AgendaAgenda
• Trends and Issues
• Breaking through the clutter
• List, Offer and Creative
• Media
• Testing
• Measurement
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Three Key Issues Three Key Issues • Clutter
– There has been a six fold increase in the last 20 years in messages we see or hear in our daily lives.
– It’s now between 3,000 and 5,000
• As consumers we are on overload and are increasingly tuning out – Response rates are declining
• The privacy issue is headed straight at direct marketers
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Breaking Through the ClutterBreaking Through the Clutter
• Tighter targeting and segmentation leads to increased relevancy of message and offer.
• Personalization that recognizes the relationship you have with the recipient of the communication.
• Media combinations that overlay
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Breaking Through the ClutterBreaking Through the Clutter
• Permission based programs and relationship marketing– Not just an web based program
• Great offers or very unique selling propositions – Consumer think most products and
services are commodities
• Straight talk
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The Interplay of the Three The Interplay of the Three Direct Marketing Elements Direct Marketing Elements
• Targeting and list 40 – 50%
• Offer 30 – 40%
• Creative & media 30 – 40%
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The Wonderful World of ListsThe Wonderful World of Lists
• There are over 100,000 lists available– SRDS Mailing List Books
• Three general types of public lists– Compiled– Response/purchase– Co-op databases
• House or customer
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The List BusinessThe List Business
• Owners, managers and brokers
• Co-op databases
• Rental vs. purchase
• Seed names
• List accuracy and decay rates
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More List StuffMore List Stuff
• All lists have “selects” and your targeting process should identify the proper “selects”– Typical selects
• Most DM campaigns use multiple lists and there is normally a merge/purge process.
• Correct postal preparation is important as well.
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Targeting for list selectionTargeting for list selection
• “Affinity” list selection is a process of deciding how closely the list matches the characteristics of your most likely customer.– Prior behavior is the strongest predictor of
response and campaign success
• Profiling and modeling is a database approach that takes actual customers and enhances and then profiles the file with demographic and lifestyle information.
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RFM as a Targeting ModelRFM as a Targeting Model
• Recency of purchase
• Frequency of purchases
• Monetary value of purchases
• Score the customer file by quintiles and assign a score for all three characteristics – 125 cells.
• Which is the best predictor of future response?
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Offer StrategiesOffer Strategies• The offer is the reason to respond or
buy now – it’s not the product/service.
• Most common offer types are:– Price – Time – Availability
• Multiple offers
• Kobs’ 99 Offers
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Creative Creative
• The creative triangle– Copy– Graphics– Production
• Direct marketing creative is different from advertising creative and requires additional skill sets.
• The role of the Creative Brief
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Rational/Emotional GridRational/Emotional Grid
• FCB Grid
• A template to help you think through the creative development of a DM campaign
• Can also be used to graph the competitive messages
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The Rational/Emotional Grid
Rational(thinking)
Emotional(feeling)
HighImportance
LowImportance
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The Rational/Emotional Grid
Rational(thinking)
Emotional(feeling)
HighImportance
LowImportance
Examples of Products/Services
•Computer Systems
•Insurance•Farm Tractors
•Temporary Services
•Cellular Phones
•Company Cars•Software
•Mfg Maintenance Supplies
•Employee Uniforms
•Long Distance Service
•Office Supplies
•Office Furniture
•Wall Hangings
•Corporate Gifts
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The Rational/Emotional Grid
Rational(thinking)
Emotional(feeling)
HighImportance
LowImportance
Marketing Communication Tactics
•Long Copy Letter•Impact Mailing
•Complex Packages
•Telemarketing
•Dialogue eMail
•Video
•Advertising•Short Copy Letter
•Brochures/Pictures
•Humor
•Permission eMail
•Post Cards•Self Mailers
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Creative TipsCreative Tips
• Take your personal opinion out of the process to act as your own creative director. Use known and proven principals plus the “eye of the beholder”
• Cost should not be the first consideration. Results, as measured in gross margin or profit terms is the guiding factor.
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Creative TipsCreative Tips
• Relevancy of message and offer fights through the clutter.
• Remember that a “flat” piece of mail is handled differently than a 3-D or something that goes “bump in the mail”.
• Don’t try to trick the audience.
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Direct Mail Creative Direct Mail Creative GuidelinesGuidelines
• Direct mail is a conversation with one person.
• Design the envelop to get it opened!
• Letter is the heart of your communication and does the hard work.
• Design the response vehicle first and then write the letter.
• Who’s the “hero”? Offer, reader or you?
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Bob Stones’ Seven Copy Bob Stones’ Seven Copy GuidelinesGuidelines
• Feature the most important benefit no later than in the headline, first sentence or first paragraph.
• Immediately enlarge on your most important benefit.
• Identify specifically what they will get if they act now.
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Seven Copy GuidelinesSeven Copy Guidelines
• Back up your statements with proof, endorsements or testimonials.
• Call to action -- tell them what to do, when and even how .
• Highlight what they might lose.
• Rephrase the prominent benefits in the closing offer.
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Creative TipsCreative Tips
• Design the letter– 1st, 2nd and 3rd order scanable
• Z path – start upper left; exit lower right
• Folds – reader will open to widest point
• Color out pulls b/w – 2 to 1
• Cartoons vs. picture – a tough choice
• No more than 7 lines per paragraph
• Type size should be no less than 10 point
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Creative TipsCreative Tips
• Opening paragraph should have no more that 11 –17 words.
• All sentences should average no more than 14 words.
• In a 2-page letter, break the last sentence into the next page.
• Quotes increase readership and interest – unless they are by you.
• Odd numbers are more believable than even
• Be as specific as possible
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Creative TipsCreative Tips
• Don’t ever use an *
• Serif type is best for letter readability
• The eye goes to anything out of order
• Use screen tints – red and yellow are best
• After their name people read either the– P.S. or response card
• Avoid reverse-out type – decrease readership by 33%
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Media – a Brief OverviewMedia – a Brief Overview
• Mail– Post card– Inserts– Self-mailer– Letter package– Impact mailing
• Telephone– In and out-bound
• E-mail and Internet
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MediaMedia• TV
– Short form– Long form
• Radio
• Outdoor and others
• Combinations– TV and mail– Mail and phone– E-mail and phone
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Brand ResponseBrand Response
• The advertising quandary:– “we advertise for brand awareness but
measure by number of leads or sales we make”
• Combine brand advertising with direct response.– The key is the offer that is related to
the USP– The design of the ad changes as well
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TestingTesting
• You are not a direct marketer unless you test. Why test?
• What to test is the issue– List – Offer– Creative
• How to test is the second issue– A/B split – Multiple cell– Statistical projections
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MeasurementMeasurement
• Response rates
• Cost per lead
• Cost per sale
• Breakeven
• Lifetime value
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To Sum UpTo Sum Up
• Consumer DM is BIG – in 2000 sales were $937.7 billion
• We have barely touched the surface in this large, growing and sophisticated world.
• Suggest you learn more by joining the DMA, attending conventions, reading trade journals and stealing from people like me.
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Thanks for AttendingThanks for Attending
• Questions – call us at 480-778-9900
• Come to a completely different session on B2B this afternoon
• By By