The criteria for direct marketing begin with a reliable customer database. Other factors include offering greater customer value through a more customized and personalize approach for product and service offerings, distribution processes tailored to meet the needs of customers, and the opportunity to build customer loyalty. One of the first criteria for direct marketing is to have a consistent customer profile available which describes the dominant target markets. This information must have sufficient detail to support a customer database. A customer database quantitatively captures the key characteristics of prospects and customers who are most ready, willing, and able to purchase your product or service. It may offer demographic information about their age, income, education, gender, and previous mail order purchases. In concert with this information, this customer database identifies customers who possess these characteristics:
• Have purchased most frequently.
• Purchased recently.
• Spend the most at each transaction.
This database is used to accomplish the following.
• Identify prospects.
• Decide when a customer needs a specific offer.
• Enhance customer loyalty.
• Stimulate repeat purchases.
Access to a customer database is the first step. The next set of criteria includes enhancing customer value through one or more of the following factors:
• Customized product and service solutions.
• Personalized interaction before or during the actual transaction.
• The development of expertise within an industry or based on specific issues.
• Individualized distribution processes accompanied by customized marketing offerings.
When these criteria are met, the organization may be able to leverage areas of expertise, economies of scale, and have the potential to build customer loyalty. An organization may be able to achieve greater target-market precision through direct marketing than it can experience through a mass marketing or channel marketing approach.