Introduction
The Association for Train Operating Companies (ATOC) is considering a marketing strategy that can maximize their budget as well as provide an environment to obtain their marketing objectives. However, the manual operations of ticketing booths including the long processing period before issuance of Young Person’s Rail Card (YPRC) will serve as the bottleneck to attain their marketing aspirations. Manual collection of customer data makes retrieving them and using them for decision-making tedious and difficult that makes managers less motivated to do so. Operational resolution of problems results to client’s excruciating frustration and would less likely to ride rail again. The marketing solution through rail discounts turned out to be a problem.
This paper presents a bulk of direct marketing (DM) theories and evidences as a background on how ATOC’s aspirations can be guided towards success. This includes practical view of DM, describing different channels of DM and some cases/ evidences/ applications of DM. Second, an introduction to a profitable DM is inserted to be able to have a grasp on what comprises an effective DM. Lastly, the presentation of DM strategy applicable to ATOC is discussed in detail which can be at times silent on its use of the initial theories, evidences and pattern of DM but such is the result of analysis and compatibility with the budget and target market of ATOC. At the end, conclusion is placed to wrap-up the paper and presents some enlightening findings from the theoretical background to the recommendation itself.
Practical Background to Direct Marketing
Imagine you can minimize your concern from the world news of escalating oil prices by avoiding demanding too often. Also, you can retaliate against store owners who are obviously patronized by a crowd of customers but who has little concern to relax the long-waiting lines to the cashier. Through a company that provide direct marketing (DM) to its customers, these savings and conveniences can be obtained. Aside from this, customers will get satisfaction in the same way from the first experience of the DM service or even better since the company itself is upfront and personal with each of their clients.
DM is a commitment formed by a firm to a satisfied customer wherein the whole product experience from order request to delivery is provided. Commitment is an important factor for DM because the firm should be a consistent service provider to obtain the ultimate objective of the strategy which is brand recognition and loyalty. However, when a firm engages to DM activities, it has communicated to a customer a bold attempt to secure their trust and confidence through exposure firm’s resources and capabilities. This may result to overestimation of what the firm can actually provide and how long. In effect, the risk of drifting to an expectant customer and unable to completely suffice its need becomes an area of concern.
In respect to this, communication channels that directly link the warehouse, service units, collection and other divisions of the firm to customers are necessary. Inquiries, orders, service requests and other complaints can be channeled through interactive websites, phone or kiosks. For the advertising and feedback, the firm can use direct mail, catalogs interactive TV and websites. As observed, DM communication offers efficient way to reach customers. It also supplies the data in order for the firm’s information system to be regularly updated. In effect, the customer database from DM communication is important for the firm to aid in customer management as well as to customers for an informed purchase and after-sales satisfaction.
At this point, it is fitting to say that DM supports not only the marketing area of a firm but also other departments. Defects are communicated through the production team, delivery delays to the scheduler, competitive discounts/ other promotions to finance, and additional manpower to the human resources. The advantageous part of this support is that the information is directly gathered from end-users both potential and actual at present time and divulge by firm’s employees. This will lead to faster customer response, customization and consistency of operational actions. Costs are minimized since market research is not necessary and middlemen’s conflicting interests against the firm’s goals is avoided. The day-to-day addressing of feedback will guide higher management to act on potential opportunities and threats in the competitive environment for the purpose of strategic planning.
DM is used as an advertising medium apart from mass-intended channels such as from print advertisements or commercials form radio and television. There is a personal touch when a firm delivers its messages because customers are contacted personally. Their individual concerns are highlighted making a customized communication loop. They would feel special and again landing into the core of DM to satisfaction and commitment. Due to this, DM is acknowledged to be compatible when offering expensive products that customers regarded as risky purchase. This is so because those products either occasionally purchased (computers, cars) or suggest status of the user (jewelries, clothes).
On the other hand, DM and mass media can go hand-in-hand to create an integrated DM. This process will expose large potential customer base at awareness level initially through mass media. After demand is stimulated, interested customers would then undergo the DM of the firm from providing product knowledge to actual purchase and delivery. In the contrary, since the high-end market is the most likely target of the firm, the resort to mass media options becomes minimal and strategic. Locations of billboards will be situated near business centers or heavily trafficked highways and print ads will be seen in magazines rather tabloids. The secret lies when DM is successful. Repeat customers create experience curves wherein marketing of word-of-mouth becomes natural outcome from satisfaction. As suggested, DM is most effective for products that are viewed by customers on their added-value rather than price.
Channels of DM
Face-to-face selling is the oldest form of direct marketing and is considered the most “direct” DM channel. However, this can be very expensive and requires a pool of devoted sales agents that it undermines the capability of technology to make operations efficient. Such can be useful when targeting a huge contract from a major customer. Second, direct mail usually has leaflets and other give-away from marketers for the intention to send an offer, message and reminder to a person. This channel became more popular with technological improvement of fax-mail, e-mail and voice-mail that enables a firm to send the message with lesser on-freight risks from postal services and lower costs with wider customer scope in just a click.
Catalog marketing can be sent directly to clients in print form or through CDs and online videos. These catalogs embody either the general products of a firm, only their specialty ones or those under over-stock level. In effect, the channel does not only maximize revenues but also minimize warehousing costs. However, a database is necessary for an effective catalog marketing strategy. This will avoid re-distribution of catalogs to customers under bad debt and control its inventory. In contrast, telemarketing or also referred as m-commerce functions in two way. It can serve both inbound and outbound for the purpose of taking orders, maintaining relationships, prospecting and answering assistance and technical inquires. Unlike catalog, this channel is prompt since the firm and customers are at the other end of the line.
Infomercials and shopping channels are classified under direct-response marketing. There is little dynamic interaction between the channel and customers unless the latter take a call. Such are more advertising-based channels intended to highlight the features of the firm’s products. Its scope is comparatively larger than any other channels but costs are incurred by the firm based on frequency or length of airing. Further, kiosks can serve as the mini-retail store of the firm to emphasize its new products less known by the market. It is a small building with an agent capable to provide ample information about the product launch. It is a best place to house “hot” products whose demand is “sleeping” since market testing can be conducted in the kiosk.
These channels basically require database to store information of customers, complaints and other key statistics. Without database management, problems will be continuously cured without an antidote to completely deter. No other channel can provide the platform to retrieve data in an efficient manner that forgets about the clutter of corporate records in white papers than the use of information technology. This is one way e-marketing extend aid to the firm. E-marketing involves electronic podium to create marketplace through internet. A customer can view the products, purchase them and pay all at one internet experience. Interactivity is high than any other channels. It is also responsible for e-mail. However, unsolicited emails could reap customer relationships instead of enforcing it due to privacy needs of customers.
Cases, Studies and Applications of DM
Pfizer is rethinking its marketing strategy for its arthritis drugs. Doctors are too busy in examining the patients that after giving the necessary recommendation, there will be short-time for patients to forward their queries about other features of the products. This may result to less effective benefits of the drugs due to sub-optimal emphasis on other medication factors like eating before taking a drug. To resolve this issue, the firm had provided user manuals for patients. The manual is designed with an easy-to-understand language and supplemented with health tips to promote readability and functionality. This strategy is backed by its website and links including 800-telephone number.
Successful direct marketing-driven companies and executives emphasize knowledge on marketing techniques, experience in DM campaigns and familiarity with the new available technologies. They must have costumer understanding and must be able to innovate as fast as the development in technology to remain competitive. With this mind-set, they can anticipate customer response and segmentation. Otherwise, they would loose a share in the market from a competitor who exploited the presence of new printer models, secured mode of payment or fad. Creating knowledge from databases and environmental analysis are critical to execute DM plan.
As the world moves toward dynamic social and technological changes and so consumers had evolved into more complicated creatures. This applies to direct marketing advertising. From the two dimensions of advertising beliefs (economic and social effects) on a study way back on 1968 and supported in a similar conclusion on 1980 studies, recent surveys revealed that the dimension spans to six (perceptions about personal and social benefits, commercial execution, deceptive factor, offensive aspects, frequency of airing, and absence of sufficient information). To close the debate, (1993) concluded a seven-factor model of consumer evaluations which include personal (product information, role/ image, pleasure) and social effects (good for the economy, materialism, value corruption, no sense).
The study of (1997) showed that DM advertising segmentation is crucial if the firm wants to maximize their DM activities. This is because their data suggested that there is no general attitude on consumer’s view on DM. Another, ordering through information is high for the word-of-mouth and low on television because impersonal commercials have the tendency to depart from the reality in favor of entertainment while the former can be more formal and interactive. Further, demographic investigations suggested that more women favor DM advertising wherein men tend to be critical. Other factors such as age, occupation and education have direct impact on person’s view and response on DM.
At the end, the study recommended that firms using DM advertising can enhance the acceptability and positive effects of DM. This can be done by evaluating the contents of a certain print-ad carefully since it can destroy the credibility of product information. Money-back guarantees can also uplift the attractiveness of a product exposed under DM since it minimizes the risk of the speculating consumer. Lastly, to avoid annoyance from customers, firms should diligently seek permission before applying DM strategies directly to them. This will enhance not only acceptability of their practices but more importantly to prevent any government and legal action regarding issues of privacy.
Before 1990s, computer-aided DM primarily aided telemarketing in two ways. A salesperson that regularly uses the telephone to reach customers for delivering messages, handle queries and record sales can enjoy the consistency and speed of computers. In addition, it provides a manager with broader understanding in the marketing parameters that can affect the effectiveness of the campaign. Using manual mode of retrieving data, evaluation from a telemarketing approach can undercut the quality of findings due to less motivation and difficulty that faces the manager.
On the survey of 15 companies, it is found that the easiest barrier to the implementation of computer-aided DM is the technology. The problem basically is the incompatibility in software (third and fourth language preference), hardware (mainframe, workstations or PC network choice) and networks (question of compatibility in geographical locations). Human conflict between the actual user and MIS personnel results to this setback as the former wants functionality while the latter prefers integration of one unit to the rest of the firm’s departments. The choice of the former resolves the efficiency problems in the day-to-day operations of the firm while the latter is more of a long-term commitment to save costs, training of personnel and efficiency in the long-run.
A major component of successful DM is to be able to predict the behavior of customers. In investment banking, giant brokerage firms like Merrill Lynch and Schwab is losing billions of dollars each year both in assets and revenues due to switching customers. Although they have access to customers, they have real problem in forecasting the specific time when customers will withdraw their investments. In a study, it is useful for such firms to consider statistical methods about probability structures to estimate whether a customer is in super-active, active or inactive state. The next purchase is monitored over time and fluctuations in the probability will alarm the firm to take precautionary or enforcing strategies to revert behavior. This will save it time and money since the probabilities are arranged according to order of priority and who will be contacted first (probably the bound-to-inactive customers). The process requires the firm to record the frequency of a certain past behavior in order to get a reliable parameter/ framework in assessing future behaviors.
From its humble beginning, Dell Corporation is already an ice breaker to the business realm starting with a mere ,000 in 1984 to current total sales of about billion. With a visionary leader Michael Dell and his reliance on DM strategy, this dream had turned into reality. Unlike other computer companies who sell their products to retailers, Dell avoids the pass-on costs of storage and transportation including mark-ups to end-users by directly contracting with them. In addition, they process of monitoring consumer demand is integrated in the sales deal since the customers have to specify the requirements of their computers. This built-to-order and just-in-time manufacturing enables Dell to increase value-added features (new technologies can be easily installed) and decrease costs (storage and inventory). DM for Dell places customers in the driver seat of the sales deal where they are the “boss” from the start to the end of the sales experience.
One would ask, how would potential customers cling to the firm if they are not aware of its name, or if so, the depth of its products and services? Dell confronted questions like this by using media devices to stimulate interest so that DM can be established. 0 The firm advertises in newspapers, magazines, internet and televisions to get large awareness program. The primary intention of such strategy is for interested people to call or visit Dell’s website and place their orders, hence, opening the door for DM to take place. The advertising strategy not left unevaluated and Dell assesses the volume of calls or number of clicks to the website to determine the effectiveness and level of customer responsiveness of the advertisement. The response rate will be compared to the costs of the advertisements to determine the most effective advertising medium/ content.
Although Dell highly depends on DM implementation, selecting the right approach to customers provide the backbone for the firm to avoid underperforming or over performing an expectation. Catalogs are only given to regular and preferred customers. This example can be considered as a process of market segmentation where in the firm segregates a certain group of customers that share similar characteristics. In effect, they are approached with varying marketing mix.
A Profitable Direct Marketing
DM is a lucrative strategy due top several factors. First, it is the only measurable advertisement and so decisions to intensify, relax or stop a marketing strategy have basis. Second is that it can be easily tested for a particular market and results can be evaluated. Because of this, expanding customer base is not only feasible but also controllable. Third, it is a way to maintain customer relations for a long-period of time since it is hard and more expensive to find a new customer than the old one. DM will serve as the platform for relationship marketing to take place.
DM oftentimes starts with an offer. This should encompass aspects such as believability, involvement from customers and creativity. As a result, a firm may end-up offering free-trial, samples, money back, credit card/ installment payment schemes, early bird offers, multiple product offers/ discounts, among others. A checklist is showed in attach 1. The use of such DM offers varies with the type of people according to their attitudes, economic status, education and cultures. It will be a waste of money particularly printing if the firm put an ad in the “wrong hands”. To effectively determine a customer’s lists there are three types of list a firm may want to have: namely: in-house list are those customers who bought to the firm, direct response list are those from other firms and compiled lists are those from potential customers who shared similar characteristics that yet to purchase via direct mail. Determining the best list can be personally held or outsourced to a list broker. Attach 2 contains a sample of typical mailing list card.
The 80/20 rule states that 20% of customers bring 80% of the business have implication to the database of the firm. It can not only be enhanced and deepen knowledge of customer characteristics but also record the frequency and money spend. In effect, it can aid the firm in identifying the 20% and focus on them. Database is capable of market segmentation that it is a useful partner of an effective DM. It has also the ability to build a framework in which potential customers can be targeted.
Individual features of different channels including their benefits and costs should be noted. A direct mail is expensive but qualified potential buyers are covered. A critical factor in direct mail is the letter that should contain a “human sense” and appealing words that will get the readers hook. Brochure usually come hand-on-hand with the direct mail which can be of utmost importance if the product/ service offered by a firm has strong sales factor on appearance (furniture), has general use/ adaptability (car seats), contains several components (computers), is expensive (jewelry), has “before-after-effect” (cleaning service) and requires presentation (sports equipment). For brochures, color red is considered most effective since it is vibrant and stand-out from the rest of the mail.
Until recently, catalogs became widely-known for customers who do not have time and willingness to fill-up the mail order forms. By viewing the specialty products offered by a firm, they can simply call, place orders and wait for the delivery. With the introduction of the internet, the process becomes even more appealing. They can browse in online pages and do the same process as the phone-order. Catalogs make customers feel that they step in the store of the company. Successful catalogs embody the same message the product tells. When the product has style or connotes status for the customers, the quality of catalog’s paper and its contents follow sometimes storyline is included to intensify it interesting aspect.
Critical and one of the most complex tasks in DM is the fulfillment stage. This requires a firm to deliver the same product/ service to customer the same way the advertisement or direct mails have promised. Crucial to fulfilling promises upon an order is to determine whether the firm will hire an outsider for order requisition or delivery services. If its personnel, facilities and budget are not compatible with one option it is more efficient to outsource one of these activities. Inventory control and customer database are two of the most important aspect of fulfillment. In effect, computer program and capability really matters for a firm serving not only quantity (size) but also on quality (depth). Fulfillment is a vital factor of customer relationship management (CRM) and unless the customers know that the firm is credible, relationship will not be maintained, if not created in the first place.
The first stage in fulfillment is order entry in which the content of the customer’s response are recorded and his payment counted. Problems may arise such as short payment in which the firm must decide on whether to temporarily absorb the payment (it might not include freight charges) and deliver the items or freeze delivery until the customer replies upon notice. The second stage is the actual sending of goods to the customer’s indicated return address. To provide a quality delivered products, the firm should be involved in the receiving, inspecting and storing inventories. As it concluded that goods are really good, it next processes such as picking, packing, weighing and shipping will be taken by its own hands. At times of delays due to seller’s fault, three options are available: cancel the order and issue a refund, offer a substitute with similar value or send partial order with explanation.
The convenience of DM to provide numerical data and allow evaluation can serve as a hint for the firm to increase its price, increase response rate and lower costs (of say, fulfillment process). Costing the channel for DM or direct advertising response is important in determining the break-even point and analyzing the result of the strategy. Costs can be classified as creative, photos/ illustrations, printing, computer/ internet, letter shop, postage, telemarketing and other miscellaneous items.
The Application of Theories and Evidences to YPRC Case
The Young Person’s Rail Card (YPRC) is a rail discount card that costs 20 pounds a year and gives 1/3 discount to the holder at most train fares incurred before 10am on weekdays. Discount exception is held for first class and already discounted fares. It is operated by the Association of Train Operating Companies (ATOC) in behalf train selected train companies in Great Britain. The target market are full-time mature students aged 16-25, and in the case of 26 and older, they should fall under the category of being a full-time student. In the opening of annual operations for 2006-2007, ATOC intended the discount scheme to increase target market penetration up by 3% from the previous year and increase the average number of journeys made by YPRC holders. This goal will serve as the backbone of how we will develop a DM strategy for ATOC.
The ultimate strategy is to execute an effective program that will highlight advantages of using rail as an alternative mode of transportation in general and having YPRC in particular. This is a direct resolution to increase awareness on YPRC doubts/ ignorance which will not only make train usage competitive against car or coach but also to encourage regular travel aside from summer vacation periods. The effect is commutative for the market to avail YPRC. From this strategy, tactics will ensue. One is to develop an on-going relationship with customers that include regularly evaluating factors affecting rail travel. Customer information will be gathered at the time they purchase a ticket and present YPRC or through telemarketing. Additional discount will be useful for answering certain questions. Another is to launch an information campaign published on any university news organs/ publications where the target market studies. This will inform benefits of rail travel particularly on the routes hold by partner companies compared to car and coach. Costs comparison is also included, however, the costs column for the rail will have a note stating: “Call ATOC on how YPRC can minimize these costs” in which ATOC call number and website are attached.
Tactic 1 requires ATOC to secure call center agents either outsourced or personally employed. They will be responsible for outbound marketing. Their labor is necessary during peak seasons like July, August, December and April since these seasons are commonly allocated for leisure and travel purposes. They need not be aggressive when students are still concentrated on studies which might demerit YPRC image. This supports the accelerating usage of students at home where parents play a crucial role and would not want a rail association to intervene in their children’s academics. Their job is to intensify the awareness of previous customers on the new promotions as well as reminding them to renew their YPRC.
On the other hand, Tactical 2 will use the print media nearest to the interest of students which is their own publication. This is intended to those that do not YPRC yet and will necessitate call center agents for inbound marketing. The call will be toll-free while application for the card can be made on-line. This tactic will serve as an information line open seven days a week from 1-9 pm to allow students to inquire after school hours. The application including picture and payment can be made online; however, the proof of age (birth certificate and the like) should be personally presented in the ticketing booth. The subscriber will be informed when and where he can retrieve card and can use the discount right after issuance.
The major costs associated for tactical 1 is wages and telephone while in tactical 2 is wages, telephone, webpage maintenance and sponsorship in the publication. The wages can be minimized by hiring students during peak seasons to support outbound marketing and also provide the firm with word-of-mouth advertising capabilities since student-employees will return to their schools. ATOC should maintain a core group of experienced employees in both outbound and inbound marketing that will entail additional expense for the benefit and reward scheme. Since the toll-fee telephone is operational only from 1-9 pm communication costs are controlled. Sponsorship for a publication appearance can be compromised unlike FHM and other “luxurious” magazines. If there is a major cost and upgrade, it is ATOC’s webpage capability which should develop interactivity (including online application which is currently non-operational).
From this tactics, evaluation is possible since calls are monitored and put into the database. The name, address, school, age, reasons for using YPRC and other necessary information are updated while incoming calls are recorded both those that are answered and unable to entertain due to heavy call traffic. This will be recorded and will be assessed if there is a need for additional agents. Agents are classified as contractual or bound-to-be regular. The latter will receive extensive training in speech development and CRM. The records of active, non-active and expired YPRC users are also updated. This will determine the total number of YPRC users, lead to conclusion of the accurate number of untapped markets and suggest what remedy/ enforcement is to be carried.
Calls from new queries will be recorded including where they saw the advertisement. This will require every university ad to have control number on them before the conversation. This will serve as the basis to classify where the information come from and will also determine the effectiveness of publication sponsorship. In addition, calls that end to non-interest, interested but no money, interested but have no specific route on where the trains are bound and successful issuance are monitored.
Lastly, since the website upgrade can be the most expensive cost of all due to inclusion of security software for online application, its result should receive considerable amount of monitoring. Application forms are still available in ticketing booths but the subscriber should the requirements at hand. This will prevent waste, damage or lost of the application paper which not only a cost reduction for the firm but convenience to the subscriber. At this point, ATOC is slowly driving customers who are applying or renewing their YPRC away from the lines into the comfort of their computers. Since students can access a computer with higher possibility, due to school provision when they do not have their own, there will come a time that the website will be their primary destination to complete their transaction with the firm.
Worst case scenarios for these tactics can range from simple to difficult-to-handle complaints and so contingency strategies should be developed. Callers can be frustrated when their calls are continuously left unanswered through busy lines. Since the firm has only been starting the program, answering machines will be developed that will tell callers to access the website instead for complete information and online application. This will provide the firm an optimal number of call center agents despite dynamic number of callers that changes everyday, month, season and year. However, the interactivity and security of its website should be improved while responses to a customer inquiry should be clearly stated like “the response will be available in three days time”.
There are customers who may not be attracted to the 14-day processing period of their YPRC before issuance. This can be explained by an abrupt leisure tour that can minimize the interest of a potential subscriber. There are two options to handle this. First, ATOC can simply shorten the processing period at most three days by acquiring their own machine located in key stations for easy pick-up by customers. The concern of the firm is suspected the discount in bulk printing of YPRC which can efficient but have discouraging effects to interested subscribers. Another, it is also an option to issue a security code number from the time the payment is made online that can use to avail the same discount just by telling it to the booth assistant. However, this should be limited to only one use and the next time the subscriber will ride, he should have his YPRC. This two can be merged depending on the firm’s preference.
Student-subscribers whose route is not bound to the rail destinations may see it inconvenient to get their YPRC. In effect, ATOC should place an option on whether to deliver the card via direct mail for extra charge. The payment for this should be combined with the membership fee. In a different manner, YPRC holder may lose or severely damaged his card (which would waive the right for a discount) can seek replacement online or though telephone. The same delivery option is open as for new subscribers. For those renewing members, payment can be done online or through ticket booths while the card is inspected if replacement is necessary. In all these cases, the customer records of the firm will be the basis to accomplish a transaction in an efficient manner.
The time frame for the strategy is one year in which the starting point commences on September when the school classes starts. Due to this, tactical 1 will be implemented during summer vacations in December, April, July and August. Its evaluation will be at the end of the August. For tactical 2, the publication information commences at the initial issue of official student publication to the last issue of the year. Their evaluation will also be at the end of the year. Although the evaluation of the two tactics is held annually, this only shows the performance of the whole strategy. Monthly evaluation will be conducted to evaluate call center agents, database, webpage and other CRM activities.
The Budget and Break-Even Point
Item
Percentage of the Marketing Budget
Website/ Database
30%
School Marketing Mix
15%
Wages
15%
Other Media Advertisement
10%
Telephony
10%
YPRC Printing Machine
5%
Direct Mail for Premium Clients
5%
Contingencies
10%
The inclusion of YPRC printing machine is deemed necessary not only on the worst case scenarios but to promote CRM and their convenience. Telephony and telemarketing expenses which include employee wages will be reduced from the time the website/ database process becomes even more intensive. For the moment, the effectiveness of human intervention to subscription and retention of customers will be tested. After the year, it will tell if there is a difference. School penetration directly resolves 3% increase in YPRC penetration (objective number 1). This includes promotional activities like free-rides to test the convenience of the rail and the experience and sceneries of the routes. Tactic 2 also implementation is also related to this. Direct mail will be issued to loyal customers who are seen as promotionally-motivated in their decision to ride the rail. It will contain list of wonderful destinations in which the rail routes can easily transport them. Miscellaneous items include perks available for families and foreigners which are done occasionally, perhaps, to stimulate demand.
The 170,000 pounds that are currently allocated for fliers and station posters will be replaced by a more conservative and focused DM strategy. Seeing the transportation industry particularly the discounting associated with it is a yearly basis, spending a lot of money in marketing does not seem practical. The concentration of rail operators should be on their service performance. In effect, their contribution to ATOC of 1,500,000 pounds will be effectively allocated. As a result, it is to be considered that the practical level for the marketing strategy will be 50% of the total budget. The other half can be returned to rail operators to consider using the money to upgrade facilities. This move will support the fulfilling-of-promises stage created by ATOC and its YPRC. The value of the discount will only be offset if service is sub-standard. Students are young and expressive and comfort should be emphasized.
Item
Costs (in Pounds)
Website/ Database
225,000
School Marketing Mix
112,500
Wages
112,500
Other Media Advertisement
75,000
Telephony
75,000
YPRC Printing Machine
37,500
Direct Mail for Premium Clients
37,500
Contingencies
75,000
TOTAL
750,000
Break-Even Subscription/ Renewal
Divided by 20-annual fee
37,000 customers
The number of customers may seem large since the computation of gains from a marketing campaign is diverse. There is a need for the firm to estimate how much is the annual revenue it derives from an average YPRC holder to be able to get a more accurate measurement of a break-even. The 20-pound initial subscription and annual fee is intended not to shoulder the costs the firm incurred during the discount period rather the cost of printing the YPRC and evaluation effort. Due to this, the 37,000 customers could mean a very good number for the strategy to continue its present form. In addition, the impact of the campaign can usually be measured on the increase in passenger size and revenues of the rail operators.
Sample Content and Design of DM Strategies
Tactical 1: Outbound Call Scenarios and Position of the Call Agent
Call Agent: Good am sir/ madam. This is Young Person’s Rail Card representative. We would like to inform you that we have a promotion called “Summer Ride for Two” wherein your partner can avail 50% of what you avail as a member. Due to this, may we know if you wanted to renew you card?
Cardholder: Oh, absolutely!
The agent will record the confirmation of the cardholder into the database and weekly/ monthly reports will show if the call is really a successful one. That is, if the cardholder have renew his membership.
This opening remark of the call agent leads the cardholder to motivate renewing the card. The purpose for this is not only to motivate the cardholder to renew his membership but also invite a non-member to be aware of the promotion and experience riding the rail and discovering the covered routes. There will be multiple effects to enhance the attractiveness of using YPRC and riding rails.
Tactical 2: Inbound Call Answering an Inquiry
Caller: Is this the ATOC hotline?
Call Agent: Yes sir/ madam. How may we help you? Where did you know our number?
Caller states his/her concern about facts about YPRC benefits.
Call Agent tells an abrupt response using computer database for any questions. At the end of the conversation, this scenario would take place.
Call Agent: We are very pleased to serve you sir/ madam. Just in case you have anymore questions, just browse our webpage. You can even register and get your YPRC in no more than three days via ticket booth or charged delivery service.
This shows that the agent should have standardized mode of conversation. In addition, he/she should also be able to answer the questions in a fluent and lively manner. Due to this, the telemarketing emphasizes the need of people to talk to the firm personally and denotes that they are really interested in the service. Unlike browsing a webpage, telemarketing provides security that other modes of DM introduced by ATOC are genuine and protected. They should be the one to explain that payment on-line is safe, that their privacy will be secured with utmost care and their satisfaction form online convenience is guaranteed.
Conclusion
DM is an effective tool that ATOC can use to intensify its marketing campaign. It can aid to penetrate its target market and increase the use of cardholders to discounts. DM compatible with ATOC since its service needs long-term commitment to satisfy customers not only by providing information through advertising channels but more importantly fulfilling its promises. As a result, collaboration for the rail operators is necessary not only to integrate marketing messages into one holistic branding but also to integrate the meaning of the massages into the service experience proper. Transportation is viewed to be a public service and so customers are in the strong stance to demand a satisfactory service. In our recommendation, the most efficient (except for the website/ database improvement) tactics are used. There effectiveness will be evaluated and this evaluation is made possible since data are updated and reported regularly. All channels of DM will be routinely used to stimulate rail use, invite students to obtain YPRC and resolve worse-case scenarios that include the combination of direct mail, telemarketing, face-to-face marketing (ticket booth), interactive website, print-ads, among others. With the amount of excess money our strategy had saved, the program can be said to be flexible and adjustments in case of underperforming activity is relatively easy.
Attachments
Attach 1: Checklist for Offer Options
√ Price incentives
√ Payment options
√ “You have been specially chosen”
√ Premiums
√ Samples
√ Free-trial
√ Automatic shipping or negative option
√ Member gets a member
√ Early bird
√ Contests and sweepstakes
√ Multiple discounts
√ Multiple products
√ Deluxe edition
√ Bounce-back
√ Money-back guarantee
Attach 2: Typical Mailing List of a List Broker
Credit:ivythesis.typepad.com
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