Direct marketing, as practiced by professionally managed firms is a four-step process:
1. Identifying prospects
2. Establishing contact
3. Booking the order
4. Maintaining contacts to develop a mutually beneficial, long-term business relationship.
Identifying prospects and segmenting them into various categories based on certain specific criteria is critical to the success of direct marketing. This is done in different phases.
In the first phase, a preliminary list of potential or ‘may be’ customers is made through random mailing, house calls, or mass media advertisements using coupons or some other contact device. In marketing parlance it is termed ‘cold listing’.
This cold list is thoroughly scrutinized and attempts are made to identify those who are not likely to use the proposed product or service due to incompatibility of need, income, age, sex, occupation or any other reason.
All such people who don’t qualify as prospects are dropped from the list. The residual list is then known as the ‘hot list’. Firms may sometimes seek to gather additional information about those included in the initial list by contacting them on telephone or through other convenient media.
The next step is to draw a detailed profile of the prospect. This may include information on consumption habits, purchase behavior, personality and lifestyle, social class, exposure to media; and demographic particulars such as age, income, education, profession, family size, domicile and complete postal address. Technically this step is known as ‘profiling the respondent’ or ‘response graphic’.
The list is further split into separate clusters of identical groups, using some demographic, psycho graphic, or behavioral parameters. This exercise is termed segmentation.
Firms now adopt many innovative ways of clustering, using novel parameters such as traveling habits, food preferences, ownership of automobiles, possession of assets and durables, and taste for music and art.
Finally, each cluster is researched using some predetermined criteria, to identify the specific segment or segments to be targeted for marketing the product. This exercise is known as targeting.
If the product is a high-value item such as jewellery, a computer or an expensive gadget, direct marketing goes into further details and makes an elaborate study of each individual included in the target segment.
This is known as individualization. Now the firm may focus on the specific needs of the individual customer. Let us now see how it works in actual practice.
Having identified the customer and prepared a database of individual profiles, the next step is to call at the residence of individual prospects for live demonstration or to offer a free sample of the product.
Since the individualistic approach ensures better chances of being heard, it is far less difficult to get an order for the product.
In the afore-said example, the firm was successful not only in selling its gadget to a majority of the host-listed respondents, but in the future too, this database may be of immense help in identifying and targeting customers if it introduces some related product such as a blood sugar or body weight monitor, or a self testing kit for diabetic patients.
Finally, having been able to sell the product or service to a customer., it is essential to keep in touch with him/her through mail, telephone or any other means of communication, to retain him / her as a customer.
To create a lasting relationship, firms must maintain regular contact and update their data according to the changing needs and tastes of the customers.
1. Identifying prospects
2. Establishing contact
3. Booking the order
4. Maintaining contacts to develop a mutually beneficial, long-term business relationship.
Identifying prospects and segmenting them into various categories based on certain specific criteria is critical to the success of direct marketing. This is done in different phases.
In the first phase, a preliminary list of potential or ‘may be’ customers is made through random mailing, house calls, or mass media advertisements using coupons or some other contact device. In marketing parlance it is termed ‘cold listing’.
This cold list is thoroughly scrutinized and attempts are made to identify those who are not likely to use the proposed product or service due to incompatibility of need, income, age, sex, occupation or any other reason.
All such people who don’t qualify as prospects are dropped from the list. The residual list is then known as the ‘hot list’. Firms may sometimes seek to gather additional information about those included in the initial list by contacting them on telephone or through other convenient media.
The next step is to draw a detailed profile of the prospect. This may include information on consumption habits, purchase behavior, personality and lifestyle, social class, exposure to media; and demographic particulars such as age, income, education, profession, family size, domicile and complete postal address. Technically this step is known as ‘profiling the respondent’ or ‘response graphic’.
The list is further split into separate clusters of identical groups, using some demographic, psycho graphic, or behavioral parameters. This exercise is termed segmentation.
Firms now adopt many innovative ways of clustering, using novel parameters such as traveling habits, food preferences, ownership of automobiles, possession of assets and durables, and taste for music and art.
Finally, each cluster is researched using some predetermined criteria, to identify the specific segment or segments to be targeted for marketing the product. This exercise is known as targeting.
If the product is a high-value item such as jewellery, a computer or an expensive gadget, direct marketing goes into further details and makes an elaborate study of each individual included in the target segment.
This is known as individualization. Now the firm may focus on the specific needs of the individual customer. Let us now see how it works in actual practice.
Having identified the customer and prepared a database of individual profiles, the next step is to call at the residence of individual prospects for live demonstration or to offer a free sample of the product.
Since the individualistic approach ensures better chances of being heard, it is far less difficult to get an order for the product.
In the afore-said example, the firm was successful not only in selling its gadget to a majority of the host-listed respondents, but in the future too, this database may be of immense help in identifying and targeting customers if it introduces some related product such as a blood sugar or body weight monitor, or a self testing kit for diabetic patients.
Finally, having been able to sell the product or service to a customer., it is essential to keep in touch with him/her through mail, telephone or any other means of communication, to retain him / her as a customer.
To create a lasting relationship, firms must maintain regular contact and update their data according to the changing needs and tastes of the customers.