copyright by debra l. zahay 2002 acquiring and retaining customers and branding using marketing...

Copyright by Debra L. Zahay 2002

Acquiring and Retaining Customers and Branding using Marketing Technology

Debra ZahayAssistant Professor of Marketing and Electronic Commerce

North Carolina State UniversityFebruary 26, 2002

Thanks to Yesmail.com and Mary Lou Roberts


Marketing

• An interactive process whereby firms’ create value for their customers and profits for themselves

• In Emarketing, we use technology to facilitate this process


The Promotion MixThe Promotion Mix

AdvertisingAdvertising Sales PromotionSales Promotion

Direct PromotionDirect Promotion Public RelationsPublic Relations

Elements of the Promotion MixElements of the Promotion Mix


Customer Acquisition

Search engines

Online advertising& mktg.

Offline Advertising

Acquire customers


Online Advertising

Online Advertising Banners Interstitials Superstitials

E-Mail Advertising

Off-Line Advertising

Affiliate Programs

Viral Marketing

Newly- Acquired Customers

Portal Deals


SEARCH

• Directories (Yahoo!, Excite, commercial directories)

• Search Engines (Google, . . .)– Keywords– Title Tags– Meta Tags


Total US marketingexpenditures

(billions)

Direct Marketing - Enormous and Growing

1998 2002

Projected Internet marketing expenditures

(billions)

$18.5

$122

$163Direct Marketing

BrandAdvertising

Source: DMA Source: Forrester Research

$1.8

Direct Marketing

BrandAdvertising


Email is Cheaper, Faster and More Effective

DirectMail

Lower Cost

DirectMail

$1.25

$.25

Higher Response

Response ratesCost per unit

DirectMail

3-6 weeks

3 days

Quicker Results

Time required for75% of responses

5-15%

1-2%

Source: Forrester, DMA75-90% lower costSource: GartnerGroup Source: YesMail, DMA


Email Marketing - Rapid Growth Predicted

Revenues(billions)

Email services market revenues

012345

’99 ’00 ’01 ’02 ’03 ’04

Email retention servicesEmail acquisition services

$4.8 Billion

Source: Forrester Research


What’s Going on Here?

Email is changing the face of direct marketing . . .


Creating a True 1-to-1 ChannelWhy?

– Cost-efficient

– Effective

– Can be rapidly deployed

– Produces real-time, immediate results

– Ideal testing medium

• Offers, message/copy formats, pricing, product features, list sources, etc.

– Trackable, measurable and ROI-driven

• Track individual behavior – click-through to conversion– Email offer, shopping cart, checkout, register, confirmation, order


Creating a True 1-to-1 ChannelWhy?

– Can be personalized• Deliver highly relevant and targeted content on

an individual basis

– Delivers direct and indirect reach

• Hits decision makers the way postal mail cannot– Referrals, viral marketing, WOM

– It’s everywhere

• 83% of respondents to recent Price Waterhouse Coopers study said email is their primary reason for using the Internet

*Email Marketing Association (EMA)


Wide Range of Strategic Applications

1. Research1. Research

2. Awareness2. Awareness

3. Branding3. Branding

4. Lead Generation4. Lead Generation5. Customer Acquisition5. Customer Acquisition

6. Customer Management & Communication

6. Customer Management & Communication

7. Up-sell & Cross-sell7. Up-sell & Cross-sell

8. Retention & Loyalty8. Retention & Loyalty

Customer Acquisition Customer Acquisition and Relationship and Relationship

ContinuumContinuum


• Study of companies doing ecommerce revealed:– 66% Use email for promotions and

discounts– 48% Newsletters– 34% New products– 28% Marketing & advertising– 24% Alerts and reminders– 8% Market research

…and Tactical Applications

Source: Forester Research, 1999


How is This Possible?

Email + Permission From intrusion to invitation

From spam to effective direct marketing


PERMISSION MARKETING

• Opt-Out

•OPT-IN


BRAND = BRAND EQUITY

Brand Awareness

• Brand Recognition

• Brand Recall

Brand Image

• Favorability

• Strength

• Uniqueness


Branding/Awareness

NextMonet.com

• Goal to introduce new online art gallery and build brand awareness

• Formal, classy tone

• Includes multiple calls to action to:

- Browse site

- Register to win free trip

- Become a member

- Check out feature article


Customer Acquisition

Eddie Bauer

• Goal to drive potential buyers to website rather than in-store

- Close sale online via direct selling

• Call-to-action is to Shop Now

• Specials featured to provoke impulse buying


Customer Acquisition Case StudyOshKosh B’GoshGoals

Increase traffic for new online family apparel store

Test scenarios before committing significant budget dollars

Program Test variables included:

Message length Format (HTML vs. text) Offer type Target audience selection

Results Response rates ranged from

2.6% to 16.4%, Highest results from the HTML

version of a $10 off offer to people interested in family/children

Program Response Short copy, $5 offer, Shopping

6.8%

Short copy, $10 offer, Shopping

6.6%

Long copy, $5 offer, Family/Kids

8.4%

HTML, $5 offer, Family/Kids

6.5%

Long copy, $10 offer, Family/Kids

11.2%

HTML, $10 offer, Family/Kids

16.4%

Long copy, $5 offer, Shopping

2.6%

Long copy, $10 offer, Shopping

3.1%

HTML, $5 offer, Shopping

3%

HTML, $10 offer, Shopping

3.8%


Up-selling/Cross-sellingSmarterKids.com

• Educational toy company

• Goal to encourage additional holiday sales from current customers

• Limited time offers good only for that day

• Series (1 per day, for 12 days) sent to people who bought during the 1999 Holiday season

• Personalized


Customer Retention

Nokia• Goal to engage

current Nokia cell phone customers who gave their permission

• eNewsletter to encourage interaction with the product

• user tips

• order accessories


OTHER ONLINE TECHNIQUES

• Affiliate Programs

• Portal Deals

• Viral Marketing www.ideavirus.com

• Inexpensive

• Expensive

• Hard To

Execute


So, What’s Next?

Get ready for the next generation of email marketing!

1st Generation

Broadcast, SPAM:

• High-volume/low cost

• Send and forget

• Generally not relevant

2nd Generation

Permission Marketing:

• Responsible

• Segmented

• Usually Relevant

• Value add

3rd Generation

Interactive Marketing:

• Focus on the individual

• Content personalized to recipient

• True 1-to-1

• Dialogue-based

• Closed loop

• “Mail Worth Opening”


STRATEGIC IMPLICATIONS

• Continued Customer Acquisition Is Essential• Retention Is Less Expensive Than Acquisition• Use Multiple Acquisition Techniques OnLine and OffLine• Cost Effectiveness Does Matter• Branding Is Possible On The Internet


CUSTOMER EXPERIENCE

ON THE WEB SITE

IS OF SUPREME IMPORTANCE…….SO,

What did you experience on your

companies web site?

copyright by debra l. zahay 2002 acquiring and retaining customers and branding using marketing...

Documents

dma slide

process slide

order slide

face of direct marketing

forrester research slide

offline advertising

mary lou roberts slide

unit direct mail