Marketing Communications

440 CHAPTER 13 DIRECT MARKETING

The growing importance of one-to-one marketing^53 has made it clear that generating

and managing customer information has moved from a strategic opportunity to a strategic

necessity. Companies that are first to detect and answer customer needs with the right

product or service at the right moment, offered through the right channel, have a substantial

competitive advantage. A file with address data is not enough to support marketing decisions

and drive customer loyalty programmes. More sophisticated database techniques have to be

used. Figure 13.6 shows five stages in the use of database marketing:^54 from the use of the

database as a file with addresses (untargeted approach) to the use of database marketing to get

the right product through the right channel at the right moment to the customers (event-

driven database marketing).

Stage 1: Untargeted marketing

Often, the starting point of database marketing in a company is the phase in which a company

uses a database of prospects. They are selected on certain criteria to fit with the target group

of the product or service that the direct marketer will promote in the mailing sent to this

broad group of potential customers.

Stage 2: Product-driven mailings

The disadvantage of the first step in database marketing is that the criteria to determine who

will be addressed are compiled by the marketer. Sometimes, when the wrong criteria are

chosen, the mailing can be ineffective. The second step in database marketing is to choose the

target group on the basis of a test action instead of mailing a predetermined target group. This

second step is based on response scoring models. A sample of potential prospects is mailed,

and response profiles are compared with non-response patterns. The result of this comparison

is a model of customer characteristics with a predictive value for response. This model is then

Figure 13.6 Five stages in the use of database marketing

Source: Based on Bügel, M.S. (1997), ‘Van Direct Mail naar Event-Driven Marketing’ (From Direct Mail to Event-Driven

Marketing), Tijdschrift voor Strategische bedrijfs communicatie, 3(2), 98–106.

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