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Direct Marketing Companies

Employees at the Bradford Group in Niles, Illinois, enjoy lunch and coffee breaks in an award-winning setting, with tables nestled among bubbling brooks that wend their way through towering palm trees and a warren of brightly lit, open-plan offices. The sound of running water reaches every corner of the building, providing a soft white noise that helps employees concentrate on the task at hand: selling limited-edition plates to collectors around the world.

In 1973, Bradford founder J. Roderick MacArthur began importing plates from France, selling them to collectors and deal- ers. As the popularity of collector’s plates grew, he decided to orga- nize the market by developing a medium for buying and selling the most actively traded issues.

Today the Bradford Exchange is the world’s largest trading cen- ter for limited-edition collector’s plates, where brokers handle trans- actions between buyers and sellers. A leader in the direct marketing of collector’s plates, Bradford has developed and marketed hun-

Copyright © 2008 by The McGraw-Hill Companies, Inc. Click here for terms of use. Basye, Anne. Opportunties in Direct Marketing, McGraw-Hill Professional Publishing, 2008. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uodammam-ebooks/detail.action?docID=4656990. Created from uodammam-ebooks on 2019-01-05 12:48:45.

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dreds of series, from plates illustrated with scenes from Lord of the Rings to others featuring work by artists from China, Russia, and Egypt. Other divisions of the Bradford Group sell collectible dolls, music boxes, Christmas ornaments, and ceramic villages.

The company is a good example of a business that sells its prod- ucts primarily through direct marketing media. While it generates sales through space advertising and direct mail, other companies also market through television, radio, package inserts, or any num- ber of media. Unlike catalogs that offer a spectrum of merchan- dise, these promotions focus on one or two products at a time. For example:

• Omaha Steaks offers choice gourmet meats, seafood items, and hors d’oeuvres to consumers and businesses.

• Harry and David sells fruits, chocolates, and desserts and is well-known for its Fruit of the Month Club.

• Printing services offer discounted personalized checks for consumers and business as well as such related items as return address labels and stationery.

Business-to-Business Direct Marketing

In the business-to-business market, companies sell products and services to businesses through the people who buy for those busi- nesses. A steep rise in the cost of personal sales calls helped to make direct marketing a more popular way to market products and ser- vices to businesses. Today, direct and interactive marketing is used to sell computer supplies and accessories, electronics, office sup- plies, educational material, books, newsletters, magazines, checks, and specialty business forms.

26 Opportunities in Direct Marketing Careers

Basye, Anne. Opportunties in Direct Marketing, McGraw-Hill Professional Publishing, 2008. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uodammam-ebooks/detail.action?docID=4656990. Created from uodammam-ebooks on 2019-01-05 12:48:45.

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Some business-to-business companies sell only through direct marketing; others have established a direct marketing arm that sup- plements their traditional business. Hewlett Packard and IBM, for example, both have divisions that sell their equipment to businesses via Internet and mail order.

Many of the techniques used to reach businesspeople resemble those used to sell to consumers at home. “A person doesn’t change that much when he or she takes off a jogging outfit, puts on a busi- ness suit, and heads to the office,” notes Jim Kobs. “The main dif- ference is that business buyers are spending company money, not their own. And in the case of many small businesses where the owner is the decision maker, they are also spending their own money in an office setting.”

Businesses also use direct-marketing programs to generate leads. A telecommunications company like MCI uses direct-marketing telemarketing to solicit new business subscribers. A small business may seek new clients, like the advertising agency that sent a boxed shoe to twenty-five new prospects a week, with a package headlined “Now that we’ve gotten a shoe in the door.” But most business-to- business sales take place through catalogs, which will be examined in Chapter 4.

Advantages of Starting in a Direct Marketing Company

According to widespread industry sentiment, the best place to launch a career is in a direct marketing company or a direct mar- keting division. The primary reason for this is that working on the client side can give you a complete education in running a direct marketing program. You can learn everything from targeting an

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audience and developing a marketing strategy to constructing an offer, creating and producing a package, and maximizing the value of your customers in the back end.

Knowledge of these phases of the direct-marketing cycle is an asset no matter what corner of the industry you end up in. Claude Hopkins, inventor of many of today’s direct-marketing techniques, began by writing copy for the Bissell Carpet Sweeper Company, where his first sales letter inspired one thousand orders, the first the company had ever made by mail order. Before he founded the direct-marketing agency Stone & Adler, Bob Stone sold surgical bandages by mail to first-aid departments of manufacturing com- panies and later oversaw all direct mail for a business publishing firm. These aren’t isolated examples. A whole host of direct mar- keting luminaries began on the client side.

Positions in Direct Marketing Companies

What kind of work can you expect to do in a direct-marketing company? You might be surprised to learn about the number of pro- fessionals needed in this type of business.

Marketing

Direct-marketing companies offer challenging positions in mar- keting and advertising. Entry-level marketing assistants handle administrative and reporting work for product managers but also are given some responsibility for marketing lower-volume lines.

Assistant product managers assume complete responsibility for marketing medium-volume lines to current and new customers. They plan, develop, execute, and analyze new direct-response cam-

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paigns, expand the customer base, and project and monitor sales volume and expenses.

Product managers and senior product managers have complete marketing responsibility for one or more top-selling lines, as well as supervisory and management responsibility for their subordi- nates. Generally, the higher up the product management ladder you go, the more involved you’ll be in companywide strategy and man- agement issues.

Managing a product line entails the following:

• Deciding on price points • Constructing offers and guarantees • Determining mailing schedules and markets • Tracking and analyzing sales trends • Looking at response and making any necessary

modifications to marketing plans and programs • Working with media people to choose media vehicles that

will attract new prospects • Working with the research department to discover more

information about the market, its characteristics, and its potential

• Working with creative staff to come up with a marketing strategy that can be executed creatively and effectively

• Working with letter-shop to make sure that deadlines are met and mailings go out on schedule

• Calculating profit and loss on mailings

A product manager makes sure that promotions are going out, product is being shipped, customers are paying, and revenue goals are being achieved smoothly and flawlessly. New customer acquisi-

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tion professionals expand the customer base by devising promo- tional campaigns that will bring new clients to the house file and by researching and purchasing outside media such as magazines, Sunday newspaper magazines, television, package inserts, catalogs, and some outside lists.

Most direct marketing companies have an in-house list manager who manages the house file, which is the database that contains buying histories and demographic profiles of all current customers. The list manager maintains the database, enhances it with addi- tional demographic data as needed, and promotes it to list brokers and other direct-marketing companies that wish to offer a non- competing product or service.

Creative

Writers, artists, and designers build the creative campaigns that are used to solicit customers. They work hand in hand with the mar- keting staff, who present the creative staff with a profile of a mar- ket, information about the product, and a marketing platform or strategy from which to generate ideas for the creative presentation.

Proofreaders and editors check all copy before it is laid out and proof it again before it goes to the printer. Sometimes proofreaders and editors who are interested in becoming copywriters are given small writing projects to determine their skill. Those who display a real gift for copy can move up, along with copywriter trainees, who are challenged to write copy for products as soon as they are hired, albeit for less profitable lines.

Copywriters are charged with creating effective, product-specific copy that persuades prospective customers to make a purchase. Early in their careers, they may focus on smaller projects, while senior copywriters handle projects for important, high-volume prod-

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ucts or services. But regardless of their position on the career lad- der, copywriters must choose the right voice for each product and craft convincing, persuasive copy that effectively covers the mar- keting and creative platform devised by the marketing team.

A former copywriter for the Bradford Exchange says, “To real- ize that one of your ideas, something you wrote and helped to cre- ate, may have made a very profitable difference in response, or even just convinced one more person to buy a plate—that’s very satisfy- ing for a writer. You know that people all over the world are read- ing your work—and liking it.”

Writing copy means knowing everything about the product you’re promoting and the people you’re promoting it to. “No sales- person would dare knock on doors without first learning all about the product: How it works. How it’s made. How it differs from com- peting products,” creative expert Martin Gross reminds copywrit- ers. A copywriter who is assigned specific lines must become fully immersed in its products and customers. Becoming fully knowl- edgeable about a product can be more difficult in direct-marketing agencies, where copywriters bounce from project to project.

Art directors are charged with making a package or ad succeed visually by taking a concept and copy and:

• Illustrating it • Choosing a clear typeface and designing type blocks • Choosing headline faces • Providing input on paper stock and ink colors • Coordinating the look of every component in a direct-mail

package, from the brochure and the letter to the order form, outer envelope, and buck slip (a separate slip attached to a piece)

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For direct-marketing beginners, the road into art direction begins in graphic design. Keyliners, typesetters, and other graphic design staff prepare the final art for the printer. Facility with desk- top publishing and illustration programs is an absolute requirement in this area.

Traf f ic coordinators schedule the production of jobs and handle the administrative duties that, neglected, can derail a project. They stay on top of paperwork, make sure writers and art directors meet their deadlines, and route copy, art, and mechanicals for approval. In some companies, traffic coordinator is an entry-level job with a future, but in others, it’s not even a rung on the career ladder.

Interactive Team

Many companies employ interactive teams charged with finding new ways to use the Internet to relate and sell to customers. In one major technology company, the interactive team’s strategic objec- tive is to know, value, and target its customers. To meet that objec- tive, the team has developed relationship marketing programs by collecting customer names on the Web, mining the data to identify prospects for new purchases and upgrades, and developing online communications to customers.

To build the database, team members create incentives to encourage customers to register on the company’s website. On the registration form, the customer can indicate whether he or she wants to receive future communications from this company and is also assigned a user identification password. The passwords store a customer’s profile and preferences so that when the customer visits the site, he or she is directed right to the screen or area desired. Credit card data also are stored to make purchasing faster. The pass-

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word enables the company to track who visits the site and how often.

Two kinds of incentives—intrinsic and extrinsic—are offered to encourage customers to register. Intrinsic incentives are benefits that naturally come with registration, such as better and faster support, more news about product updates, and expedited checkout. Extrin- sic incentives are similar to traditional direct response offers: a 50 percent discount on their next purchase from a particular site or a free magazine subscription. “Our intent is to make registration easy and compelling,” says one team member.

Customer names gathered through registration go into a com- pany’s database. Whereas previously the company’s database served as a giant electronic address book, primarily used to contact cus- tomers for product recalls, today it is used to drive marketing by enabling the company to personalize e-mail message content to spe- cific customer segments or even individual customers.

The team’s customer knowledge manager uses the classic direct- marketing formula of RFM (recency, frequency, and monetary value of customer purchases) to sift through the database and find customers for specific offers. (In some companies, the customer knowledge manager also collects the data and manages the data- base.) The manager mines the data by applying statistical analysis to the vast company database to find buyers who are likely to buy a second printer or respond to a cross-selling effort. When cus- tomer valuation and segmentation techniques have identified high- spending customers with a very high lifetime value, the company will develop a customer loyalty program designed to reward the most valuable customers. By giving these customers a significant reward, like access to priority queuing for technical support, the

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company hopes not only to retain their business but to encourage others to spend more in order to join the group.

The electronic messaging manager uses this customer information to create content for e-mail marketing messages that deliver news and offers to registered customers who have opted in or agreed to receive them. Newsgrams blend news items with promotions for new products and link each feature through a hot link to the com- pany’s website, where readers can learn more about a product or access a vendor.

The team’s main goal is to create retention or “stickiness”—to get customers to access the company’s site often and to stay a while before jumping to another site—as well as to drive purchases at its e-commerce site.

Close-Up Look at a Direct Marketing Career

Read the following personal account to learn about the career of a direct marketing professional.

Marketing Collectible Plates: Brian Covey

Plates from the Bradford Exchange aren’t what you use to set the table. Some are shaped like cookie jars cut in half. Some are three dimensional and include sculpted animals. Some are battery oper- ated and light up or play music. One plate includes an angel’s wing with real feathers.

“We push the envelope on the definition of a plate,” says Brian Covey, an assistant product manager who manages twenty lines of three-dimensional plates that feature sculpted, cast, and hand- painted figurines like animals, flowers, and Disney and Warner Brothers characters.

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Brian, who holds an M.B.A. in marketing from the University of Wisconsin, is part of a cross-functional team that works to develop and market plates profitably. To introduce a new plate, team members from product development, marketing, and advertising meet to review the concept and discuss advertising approaches. Often new concepts and prices are tested to better gauge what appeals to Bradford customers. “We use statistical analysis,” says Brian. “We don’t make these decisions until the results are in.”

Test results are used to segment Bradford’s enormous customer list to find likely buyers for the new plate. “Using statistical data from test responders, we can build a probability model and predict purchasing behavior based on how customers fit within the model,” Brian explains. While Bradford’s database experts actually build the models, it’s up to Brian to interpret the statistics and find profitable segments to mail.

Deciding to whom and when to mail is one of Brian’s biggest responsibilities. He monitors Bradford’s house file for new names to mail. “Our list changes constantly,” he says. “If a new two- dimensional Disney plate does well, I’ll mail an offer for one of my three-dimensional Disney plates to everyone who purchased. I spend a significant amount of time performing analysis on partic- ular segments to mail. I then have to review my decisions with my manager.”

Brian also looks outside the Bradford house list for new cus- tomers, especially for products that don’t exactly match the taste of the typical Bradford customer, a middle-aged woman with tradi- tional or conservative values. Space advertising in TV Guide and Sunday newspapers brought in buyers for a Mark McGuire plate.

Brian works with advertising to develop mailing packages and makes sure that the right components, such as brochures, letters,

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and envelopes, are delivered in the right quantities. He also moni- tors inventory and decides whether sales of a plate warrant addi- tional production. After a year or two, he may decide to close a line. “We produce limited editions, so we don’t offer the same product year after year,” Brian explains. “Our customers are always looking for something new and fresh.”

Although the Bradford Exchange is known for its analytical approach to direct marketing, Brian’s job isn’t all analytical. His cre- ative judgment comes into play during product development, when he may recommend a change in color palette; and in advertising, when he might suggest adding die-cut brochures, special inserts, or an elaborate certificate to a mailing package. Even the many reports he generates offer a creative outlet. “We gather large amounts of data through creative marketing,” he explains. “Sometimes there’s so much, it can be a challenge to present it in a clear, concise man- ner to my superiors.” On the whole, Brian estimates his job is 70 percent analytical and 30 percent creative. “Basically, my job is to make good decisions for my line.”

Salary Ranges

Although salary levels may vary from company to company, they are fairly consistent throughout the industry. Keep in mind that the benefit packages a company offers, such as educational reimburse- ment programs and profit sharing, can add a great deal to a per- son’s overall compensation.

According to the Direct Marketing Association, while the many variables in each job function make it difficult to quote specific salaries, entry-level salaries are competitive with those in other areas of marketing. However, direct marketing’s testability, measurabil- ity, and accountability allow for greater advancement opportunities.

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The following salary figures, and those given in chapters 4, 5, 6, 7, and 8, are from the 2007 National Salary Guide compiled by Crandall Associates Inc., an executive recruitment firm that spe- cializes in direct and interactive marketing. All figures are based on employees with one to three years of experience and are reprinted here with permission.

Merchandise Buyer $44,500–$52,500 Merchandise director $78,000–$92,500

Marketing Market research manager $50,600–$57,900 Market research director $69,900–$77,100 Director, integrated direct marketing $75,800–$83,300 Media manager $50,600–$57,500 E-mail marketing manager $60,500–$69,900 Internet marketing director $80,000–$89,300 Internet marketing manager $59,000–$66,300 Website manager $55,700–$68,000

Creative Copywriter $47,300–$57,500 Creative director $76,900–$84,600

Operations Customer service manager $46,300–$55,500 Fulfillment manager $49,500–$57,400 Warehouse manager $51,300–$56,300 Data processing manager $65,900–$75,400

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