Direct & Telemarketing

PROF: SAMEER KULKARNI ©

MUMBAI-INDIA
CONTACT-9923505962
 What is Direct
Marketing?
 An interactive system of marketing
which uses one or more advertising
media to effect a measurable
response at any location, forming a
basis for creating and further
developing an ongoing relationship
between an organisation and its
customers.
 Direct Marketing is both marketing
and sales.
Direct Marketing is the translation of
one-on-one, face-to-face selling into
Reasons for the growth in
direct
marketing
 The range of direct marketing
techniques
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General Advertising and Direct Mail
A Simple Comparison
Advertising Direct Marketing
Mass Targeted
Competitive Attention Selective Attention
Breadth Depth
Remember Respond
Impression Decision
Pay for Everyone Pay for Targets
The Two Most 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?
The Relative Power of Media

Face-to-Face
Strengths Weaknesses
 Sight  Likeability
 Sound
 Demands Time
 Eye Contact
 Expensive
 Body Language
 Interaction
 Demo Ability
 One-to-One
 Provides Time
 Pre-selection
 No Attention Competition
 Chemistry
The Relative Power of Media

Direct Mail
Strengths Weaknesses
 Sight  Easy not to engage
 Pre-selection  4 seconds to involve
 Low attention competition  Postal system dependent
 List dependent
The Relative Power of Media

Telephone (Outbound)
Strengths Weaknesses

 Sound  Interruptive
 Some Chemistry  Requires Time
 Interaction  Annoying
 One-to-One
 Pre-selection
 Low Attention Competition
Some Unfortunate Truths 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.
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
The Cost of Acquisition in a
Sales Sequence
Step1: Step 2: Step 3:
Lead Generation Qualification Sales Call
Vehicle: LPS (Local
Vehicle: Direct Mail Vehicle: Telephone
Personal Service)
Universe: 10,000 Universe: 500 Universe: 50

Cost/Contact: $1.00 Cost/Contact: $10.00 Cost/Contact: $200.00

Response Rate: Conversion to Appt. :

Conversion to Sale: 25%
5% 10%

Cost/Conversion: Cost/Appointment: Cost/Sale:

$10,000/500 = 500 x 10 = 5,000/50 = 50 x $200 = $10,000/13 =
$20 $100 $770

Total Cost of Acquisition = $20 + $100 + 770 =

$890
Common Sales Sequences

Mail/Ad Phone Mail/Email Phone LPS

 Generate Qualify  Provide  Set  See
Interest Decision information appt. rep
Authority or quote
Determine
who is involved

Phone Mail/Email Phone LPS

Generate  Provide Info Answer  Demo
and Qualify  Confirm Call Questions  Close
 Id decision Back Set appt.
process

Sell the next step.

 Qualified leads are based on
need – not interest
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Ad Generated Interest Need Generated Interest

Ad Ad
 Selection Factors

 Consumer  Business Lists

 SIC (Standard
Lists Industrial
Classification)
 Age
 Employee Size
 Income  Annual
 Gender Sales/Revenue
 Marital Status  Title
 Any other
 Homeowner information captured
 Dwelling Type (home on subscription form
or apartment) (publications)
 Corporate linkage
 Mail order buying (by information
product type)  # of years in
 Interests business
 Presence of children  Geographical (zip,
SCF, county, state)
 Geographical (zip,  Credit information
SCF, county, state,
Outer Envelope Formats

 Window Envelopes
 Plastic Card
 Invoice
 Personal
 Odd Size (9x12; 6x9)
 Offer Disclosing
 Lumpy
 Certified
Outer Envelope Formats

 See Through
 Dimensional
 Tactile Devices
 Teasers
 1st Class vs. Third
 Stamp vs. Meter
 Handwritten
 Invitation
Letter Planning and
Structure
The Opening

The Body

The Close

The Signature

The P.S.
Writing Leads for Letters – How to
Start

 A strong, startling fact, research result,

something true of their industry
 Establish a connection
 referral
 similaroccupation
 status as a customer, etc.
 recognition of status as a
donor/contributor
 Tell a story
 A quote
 Reference a competitor
Post-Call Follow-Up

 Letters/email from the rep

 New information (pricing, research, etc.)
 Discount
 Appeal rotation
 Decision cycles
The Three Phases in the Lifetime of a
Customer

Phase Phase Phase

1 2 3

Relationship Relationship Relationship

Formation Cultivation Management
Reinforce Decision Personalize Cross-Sell
Key to Source Build Trust Fit Value Proposition
and Channel Quantify Potential to Customer Needs
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 LTV from early behavior

 Provide opportunities for additional
transactions while interest is high
 Use communication to drive behavior and the
relationship
Management – Retaining/Growing the
Relationship at the Lowest Cost

Customers Mailings

A 12x

B 8x

C 7x

D 6x
The Issues in the Management of Direct
Marketing

 Relationship retention
 Relationship growth
 Matching cost of retention and
growth stimulation to LTV
 Retention and growth are
accomplished by frequency of
contact and power of contact
 It is easier to convert ‘B’ customers
to ‘A’s’ than D’s to C’s
Compares' of a Sales Support
Situation

Customers Face-to- Phone Mail/ Annual

Face E-Mail Cost $

A ($1MM+/yr.) 12 12 12 $3,744
($3,600) ($120) ($24)

B ($500 - 1MM/yr.) 6 18 14 $2,008

($1,800) ($180) ($28)

C ($250 - $500/yr.) 4 12 16 $1,352

($1,200) ($120) ($32)

D ($250/yr.) 2 8 16 $712
($,1,600) ($80) ($32)
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
 Recipients of Direct Mail

 Customers
 Have pre-existing interest
 Will read more copy
 Require less costly mail
 Mailing to customers generates $ and improves
retention
 Frequency tolerance
 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
 Gatekeepers/Saboteurs
 Mail Room
 Administrative Assistant
 Spouse
 Post Office
More 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.
More 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.

Applications of telemarketing
• Generate leads.
• Screen leads before follow up.
• Arrange opportunities for representatives.
• Direct sales.
• Encourage cross / up selling.
• Dealer support.
• Account servicing.
• Market research.
• Test marketing.
Use of telemarketing

• New business and lead generation

28%
• Customer care
26%
• Customer service
26%
• Brand loyalty
14%
• Crisis management 6%
Do’s and don’ts of
telemarketing –
The do’s
Do’s and don’ts of
telemarketing –
The don’ts
Limitations of telemarketing

• Operational issues - requires systems

that can cope with volumes of inbound
calls.
• Regulatory issues regarding for
example unsolicited mail and cold
calling.
 Thank
You