Three Cheers for Direct Marketing

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From the course by University of Pennsylvania

Introduction to Marketing

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University of Pennsylvania

Introduction to Marketing

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Course 1 of 6 in the Specialization Business Foundations

Taught by three of Wharton's top faculty in the marketing department, consistently ranked as the #1 marketing department in the world, this course covers three core topics in customer loyalty: branding, customer centricity, and practical, go-to-market strategies. You’ll learn key principles in - Branding: brand equity is one of the key elements of keeping customers in a dynamic world in which new startups are emerging constantly. - Customer centricity: not synonymous with customer service, customer centricity starts with customer focus and need-gathering. - Go-to-market strategies: understand the drivers that influence customers and see how these are implemented prior to making an investment. Complete this course as part of Wharton's Business Foundations Specialization, and you'll have the opportunity to take the Capstone Project and prepare a strategic analysis and proposed solution to a real business challenge from Wharton-governed companies like Shazam and SnapDeal or to a challenge faced by your own company or organization. Wharton-trained staff will evaluate the top submissions, and leadership teams at Shazam and SnapDeal will review the highest scoring projects prepared for their companies.

From the lesson

CUSTOMER CENTRICITY: The Limits of Product-Centric Thinking & The Opportunities and Challenges of Customer Centricity

Module 2 of our class features Professor Peter Fader, who will focus on concepts related to Customer Centricity. In an economy that is increasingly responsive to customer behaviors, it is imperative to focus on the right customers for strategic advantages. The coming weeks will provide the foundation needed to build a customer centric outlook. If you want to read more about Professor Fader’s views on customer centricity, feel free to follow him on Twitter (@faderp). He regularly shares relevant perspectives and readings there.

From Product-Centric to Customer-Centric Management15:25

Cracks in the Product-Centric Approach9:49

Data-Driven Business Models4:26

Three Cheers for Direct Marketing3:51

Which Firms Are Customer Centric?12:11

What is Customer Centricity?11:28

Living in a Customer-Centric World14:48

More Reflections on Customer Centricity3:21

Questions on Customer Centricity6:00

Meet the Instructors

Barbara E. Kahn
Professor of Marketing and Director, Jay H. Baker Retailing Center
The Wharton School
Peter Fader
Professor of Marketing and Co-Director of the Wharton Customer Analytics Initiative
The Wharton School
David Bell
Xinmei Zhang and Yongge Dai Professor, Professor of Marketing
Marketing

[MUSIC]

So while the Harris and Tesco stories are terrific, I will provide

pointers to some books that summarize each of those stories quite well.

I want to emphasize that they're not the only ones who have built a business

around a deep understanding of their customers,

and by no means are they the first.

In fact, the first companies that actually built a business in

this manner, around their customers, has happened many, many years ago.

And it emerges from the sector of direct marketing.

When I say direct marketing most people

don't have a real positive association with it.

They think about low end products.

They think about infomercials and other, you know, not great marketing activities.

it, it's, it's not the kind of industry that

you aspire to be associated with or learn from.

But when you strip away what most customers

see from direct marketers, and look at the actual

business practices below the surface, you

realize that it's actually quite impressive.

If you, if you look at, at what direct marketing is

really all about, it is really building the business around the customer.

But not just, the customer in some generic sense, but around each and every customer.

It's about understanding the relationship with each different customer.

Who has bought what from us. For how much.

What kinds of products have

they inquired about. What kinds of products have they returned.

What interactions have they had with customer service.

That's what direct marketing is all about.

It's having a much richer relationship between the company.

And the customer.

What's interesting about it is, that direct marketing is not a new concept.

it's been around since 1967, when Lester Wonderman

looked at these emerging set of data driven

business practices. And said, you know what?

There's actually a lot we can do, we can actually formalize some of

these business practices, and come up with some best practices associated with them.

But even if you don't spend a lot of time thinking about direct marketing, a lot

of the words and the concepts have already

filtered their way into today's everyday marketing conversation.

So, a lot of the segmentation concepts that Barbara discussed are

often associated with direct marketing.

But even other expressions like customer lifetime value.

Something that you've heard about before, that we're going to spend more

time talking about, that's, that, that comes directly from the direct marketers.

So the direct marketers were the first ones who said, you know what?

We can collect all this data about our

customers, about each and every one of them, and

we can actually build a business by understanding

who the valuable customers are, who the less valuable

ones are.

Which messages we should be sending to which customers at

which time, and, importantly, what kinds of products we can develop

and deliver in order to create more value for our most

valuable customers and to try to attract more customers like them.

So the Harris and Tesco stories are wonderful, but they're not unique.

And so I want to spend a

lot of time celebrating some direct marketing practices.

And I want to emphasize that a lot of firms out there today might

not aspire to be direct marketers, but they don't realize it, but they are.

Any company that's operating on the internet.

Any company that has the capability to track a particular customer over time.

Has the capability to learn from direct marketing, and I

encourage all of you to read books on direct marketing.

Even if you don't think about yourself

that way, there's just so many concepts that you can learn

and leverage, especially as we enter this world of big data.

[MUSIC]

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