Managing a Profitable Customer-Based Marketing Program - Research Paper Example

Strategic Database Marketing - the Masterplan for Starting and Managing a Profitable Customer-Based Marketing Program Introduction Hughes (2000) explains that, Direct marketing is where business people approach their potential customers directly with goods that they selling. This system of marketing advertises using one or more of advertising media which, this is a report about traditional direct marketing, how the use of database enhanced direct marketing and how it evolved into interactive marketing. It focuses mostly on interactive marketing and what the future holds, trends, etc. (Chiagouris and Wansley, 2000). Traditional direct marketing In direct marketing the marketers ask and get responses from the customers. This enable the marketers to get knowledge of their prospective customers thus making them know their target customers. The customers who had common interests were grouped together (Chiagouris and Wansley, 2000). . The direct marketing enabled sales to consumers to grow because consumers accepted direct marketers and also there was an increase in the costs that were associated with personal sales calls. For instance, the average cost of a single sale was estimated to be about $137 by the end of 1970s (Falls, 2008). Benefits of Direct marketing The upbeat results of this form of marketing can be measured directly. E, g if a marketer uses one hundred solicitations by mail to reach potential customers and gets a response of ten then it implies that there was a 10%response in the campaign. This is an advantage as compared to sending the mail in junk which cannot be measured directly. Through the use of the internet, the marketing managers are able to measure the results their campaign (Hughes, 2000). This is mostly realized by the use of a specific Web site that get pages that directly relate to material being used in the advertisement. The usefulness of the campaign is calculated by dividing the number of messages that were used in the campaign by the number of people who visit the unique Web site page. The challenges of direct marketing Some direct marketers who use media to advertise their products have been condemned for coming up with solicitations which are relevant due to poor combination of demographic database; this is a disadvantage to marketers because they waste money to reach customers who will not be interested in purchasing their products(Arthur M, 2000).. People are not aware of how the personal information that they include on an order form can be used as target advertising at some other time. One popular assumption in direct marketing is that for example if a customer places an order of a swimsuit from a clothing catalog, then he or she is obviously interested in swimming pool supplies as well as equipments that are used for exercise. This makes direct marketing to be an overload to potential customers because they get unwanted calls or mails from the marketers. Many companies that use direct marketing mechanism have self-policing links that discourage fraudulent actively. The direct marketing agencies do not respect the do-not-call list that is maintained by government agencies such as the Federal Trade Commission Chiagouris and Wansley, 2000). How database has enhanced direct marketing The use of database system came up as an improved form of direct marketing which emerged in1980s. The personal details like names, address, email and location about prospective clients and customers are compiled and maintained in a large database which aimed at boosting the marketing of the products (Chiagouris and Wansley 2000). . It enhanced direct marketing because it emphasized its operations on data analysis through which statistical techniques were used to develop the behaviors of consumers’ models which in turn enabled them to communicate to the customer that was selected. More accurate models were developed because the database used to hold more data about customers. It changes the role of direct marketing that is, the marketing became more competitive this is because cost that was used greatly reduced. Changing the cost of structures implying that there is a reduction in the cost of electronic processing hence increasing the income that as a result of marketing their products (Hillstrom, 2006). The use database has enabled the marketers to have more data about their potential customer. Data that is stored in the database include: shopping history, address names, demographics among others. In case of large companies which have millions of data about their customers then a multiple terabyte data warehouse is used. With the use database in direct marketing, the reactions of customers were recorded because of the new technology that was in place (O'guinn, 2008). The direct responses enabled marketing to grow because traders were able to communicate with the customers. Interactive Marketing A considerable number of events and activities have happened in the realm of interactive marketing from the mid-nineties which have resulted to certain patterns. Interactive Marketing in earlier years appeared to reflect a broad-based picture. For instance, Hughes (2000) observed that Interactive Marketing is "media that provides the opportunity to instantaneously advertise, execute a sale, and collect payment." In addition, Hughes (2000) realized consumer role in Interactive Marketing and defined it as "the extent to which users can participate in modifying the form and content of a mediated environment in real time." Advanced Targeting of the Consumer One key trend of Interactive Marketing in future will likely be the continued use of new technologies to facilitate advances towards targeted consumers. The current technologies already offer consumers the opportunity to give feedback information to manufacturers and retailers and, voice their preferences, as well as communicate with other consumers, salespeople, and producers. Traders are able to make use of information from consumers to segment the market, create ideas for future services or products, and personalize their marketing messages. Therefore, ads might be targeted to specific individual wants besides a psychographic or demographic group (Hillstrom, 2006). In future, the exchange of information between producers and consumers through advanced targeting will help to facilitate concrete and more efficient interrelationships between the consumer and advertiser. Interactive Marketing techniques in future will need to be customized in order to nurture this relationship through stages of awareness and willingness to trigger a relationship with a company. Both customer and advertiser need to acknowledge by knowing what the company brand is offering so as to enhance moving toward. This in return will lead to building positive trust and feelings thereby solidifying advertiser and customer relationship (Chiagouris & Wansley 2000). Media Convergence According to (Hughes, 2000), television and the Internet being a single interactive communicative product as well as the VCRs, will be everywhere (Hughes, 2000). Nonetheless, personal digital assistants PDAs, pagers, and cell phones, will all merge into one interactive mobile device. At that time, ordinary print media will be able to incorporate the Internet so as to provide readers with a more interactive experience. The effect interactive marketing on these new devices will have influence on consumers. New or Improved Interactive Channels Conceivably, the most fascinating trend in Interactive Marketing in future will be the inception of a complete set of media forms and potential which will enhance its consumer's to access all types of information (Hughes, 2000). It is evident that advertisers who apply interactive marketing will realize success through community advertising. In this kind of marketing, consumers will be able to share ideas about a particular product in the market. For instance, chat rooms, blogs, and other Internet populace will be areas where consumers are most likely to be in order to receive relevant messages. Besides, the whole nature of online communities will be enhanced and even caused to be very powerful way of communications. This ability of will introduce new and improved sources of interactive communication therefore enabling interactive marketing to offer good services to both the consumer and advertiser (Hillstrom, 2006). Proliferation of broadband, rich media and video advertising Interactive marketing will greatly help in the dissemination of product information since there will be over 75% internet users in the U.S. Interactive marketing, through broadband and video advertising will be able to engage consumers by using rich media and as a result improving interactive marketing enormously. In future, the ability to video case as well as highlighting on consumer information will enable purchases to be made online (Chiagouris and Wansley, 2000) Statistics from these latter abilities will help to track many engagements that could be applied to evaluate time used with ad. According to research, the future of social media as a way of linking customers is going revitalize how businesses will be conducted in future. There is no doubt that social media will have significant command in interactive marketing in the future. This will be due to the adverts that interactive marketing will be serving. Interactive marketing through TV and digital video recorders (DVRs) The future consumer will be easily and widely reached through product advertisings done by digital video recordings (DVRs) or set-top boxes like TiVo. However, direct reaction via TV menu screens and other strategies are still in their formative times and therefore are priced considerably high for the returns they are getting but will be affordable in future (Chiagouris and Wansley, 2000). It is also observed that retailers and manufacturers who have wide appeal will realize productive opportunities in the coming years and therefore will be able to sell goods and grow databases and channel. Behavioral targeting, retargeting, and “personalized messaging” In future, using behavioral targeting will allow the marketer to place an ad on an advertising page. However, despite the page being a public site the ad will be shown on this page only to consumers who have interest in the ad. Retargeting will allow a user to have a specific message sent to consumers who abandon a Website, shopping cart, or form. This trend will show great potential for online merchants (Shepard, 1999). In future personalized messaging, online display advertising will be linked to a marketer’s internal databases. These databases will be able to recognize the consumer, and then deliver personalized information to the consumer within that ad. Gaming Interactive marketing in future will invest and develop ads through gaming as a means to market products and or services. Since Video gaming offers a good chance to connect with consumers who are traditionally difficult-to-reach. Promotions, streaming video and interactive tools Through these promotions, interactive tools and streaming video, the future of interacting marketing will benefit marketers enormously due to increased use of their Websites for promotions and interactive facilities that enable browsing, registration for re-contact, and product education (Shepard, 1999). Polls, quizzes, as well as contests that will be necessary to a merchant’s products and services drive incremental sales in future. In addition, the future of broadband penetration will allow video products to benefit through demonstrations that engage consumers. This social contact will therefore increase interactive marketing and in due time realize sales in broad-band. Multivariate optimization tools Multichannel performance is another area that will revitalize in future therefore allowing optimization of Web pages by marketers (Falls, 2008). Registration of pages, home pages, shopping carts, and major product pages are classically optimized. According to industry research there are indications that online communications can better online and offline revenue and return on investment in future therefore improving interactive marketing. Conclusion In conclusion, in earlier times, direct marketing was extensively used to reach customers, the marketers increased their sales. In direct marketing, traders were able to get immediate response from their potential customers, therefore enabling these traders to know how well the business was doing. At the introduction of database system, these marketers revitalized with an ability to reach their customers at any time because they had their details recorded (O'guinn, 2008). Finally, according to research, the future of interactive marketing portends some exciting opportunities for organizations to improve in regard to consumer relations. However, these opportunities would have significant risks attached. For instance, in a free-market with unregulated economy there will be proliferation of standards between various online platforms (Shepard, 1999). In addition, there are no clear forecasts when this will be rectified so that standards can be established and adopted across board. According to evaluations future investment in multiple interactive channels of communication will be less expensive and advertisers will not be compelled to adopt risk diversification approach as well as prioritize their opportunities. References Hughes, A (2000): Strategic Database Marketing. The Masterplan for Starting and Managing a Profitable Customer-Based Marketing Program: McGraw-Hill, New York. Berlo, D (1960): The Process of Communication: New York: Holt, Rinehard & Winston. Chiagouris L and Wansley, B (2000): Branding on the Internet: Marketing Management: New York, Book Print. Shepard, D (1999).The New Direct Marketing: How to Implement A Profit-Driven Database Marketing Strategy, 3rd edition, McGraw-Hill, New York. Warren, K & Sandra M (1992): Marketing, Englewood Cliffs: New Jersey, Prentice-Hall Hillstrom. K (2006): Hillstrom's Database Marketing, Direct Academy, New York O'guinn, T (2008): Advertising and Integrated Brand Promotion: London, Oxford University Press. Read More