The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1750-5933.htm

DMIJ VIEWPOINT
2,4
Direct marketing and relationships
An opinion piece
192
Sally Harridge-March
Oxford Brookes University, Oxford, UK

Abstract
Purpose – The purpose of this paper is to discuss the complementary effect of relationship
marketing and direct marketing and outline the foundations of direct marketing that can be enhanced
by relationship marketing principles.
Design/methodology/approach – This is a personal viewpoint based on many years of working
in, teaching and research of direct and relationship marketing.
Findings – The paper finds that both disciplines of direct marketing and relationship marketing
have something of value to the other. The combination of the two strategies can only be of value and
benefit to both customers and organisations.
Originality/value – The value of this paper is that it outlines the symbiotic strength of direct
marketing and relationship marketing that allows contemporary marketers to utilise the best of both
disciplines to establish and maintain strong relationships with their customers
Keywords Direct marketing, Relationship marketing
Paper type Viewpoint

Introduction
Direct marketing has matured into an increasingly exact and complex science
requiring knowledgeable and experienced practitioners. More and more marketers are
convinced that they need to develop closer relationships with their customers in order
to achieve behavioural loyalty. This paper explores the complementary effect of
relationship marketing with direct marketing and draws attention to the foundations of
direct marketing that can be enhanced by relationship marketing principles.

Relationship marketing
Relationship marketing is a term introduced by Berry (1983) that puts forward that
marketers should move away from transactional marketing and build longer term
relationships with their customers, focusing on building trust between buyer and seller
so that loyalty develops. As a concept, there is little that can be faulted; after all, isn’t
that what all businesses want, loyal customers with whom they want a long
relationship?
The idea of relationship marketing was developed by Gronroos (1994) whose
opinion was that relationship marketing was all about identifying, establishing,
Direct Marketing: An International maintaining, enhancing and, occasionally, terminating relationships with customers.
Journal The objective of such relationships, he suggested, is to give mutual benefit through the
Vol. 2 No. 4, 2008
pp. 192-198 exchange and fulfilment of promises as well as communication. He went on to say that
q Emerald Group Publishing Limited
1750-5933
relationship marketing is the result of applying a set of processes involving interaction,
DOI 10.1108/17505930810931008 communication, dialogue and value (Gronroos, 2000). Over the last 20 years,
relationship marketing has been espoused by many in the services and industrial Direct marketing
arenas, where it is, perhaps, easier to developer longer term relationships. and relationships
The acquisition, retention and nurturing of customer relationships is fundamental
to an organisation engaging in relationship marketing. Nurturing the customer is a
step along the path to invoking loyalty on the part of the customer. Loyalty is one of the
objectives of relationship marketing because a loyal customer may be of strategic
advantage to an organisation. 193
Direct marketing
Direct marketing has a much longer history, originating from organisations selling
their products directly using a catalogue and mail-order. Much of the attraction of
buying this way came from the credit facilities that such companies offered as well as
the convenience of shopping from home and receiving one’s purchases through the
mail. From these rather humble beginnings, direct marketing has metamorphosed into
a complex science that involves collecting data on customers, storing transactional and
behavioural information in a database, analysing the performance of various tactics
and manipulating data to maximise the return on investment.

Direct marketing and relationships

Just because an organisation wants a relationship with a customer, it does not
necessarily mean that the customer wants a relationship with the organisation.
Marketers have to work hard at getting and keeping customers and working towards
getting their loyalty. Direct marketing may be part of the strategy for doing this.
Direct marketing has often been seen as a tool which enhances relationship building
because it enables organisations to “get a response” from those targeted, thus
establishing an exchange of views if not a full blown communication exchange. When
customers do respond to an offer, their personal data can be collected. When this
information is combined with that of other customers and is subsequently analysed, it
can yield important knowledge that aids customer segmentation and targeting..
Profiles can be developed of “good” customers, so that organisations can replicate the
success that they have had with one group of customers in another group.
Direct marketing, like relationship marketing, involves both acquiring new
customers and keeping those already gained. It has been claimed that organisations
should have both acquisition and retention strategies in order to maintain the customer
base. Latterly, some organisations have upgraded their databases to include customer
relationship management (CRM) programmes that enable them to combine data from
different sources to reduce duplication and have a more holistic view of the customer
from different perspectives. For example, a bank customer may provide data from
account transactions, enquiries about different products, online banking information,
payments or transfers between accounts and visits to branches.

Loyalty
Loyalty includes both attitudinal and behavioural dimensions (East et al., 2000). The
loyalty ladder (Christopher et al., 1991) helps marketers categorise their customers
according to their level of behavioural loyalty. These customers represent a more
attractive proposition to the marketer than the one-off transaction customer. The model
of the ladder has five rungs; suspect, prospect, customer, client and advocate. The
DMIJ concept of “supporter” was added to the ladder by McDonald and Christopher (2003).
2,4 The higher the up the ladder the customer moves, the higher the level of loyalty they
demonstrate.
However, in transactional markets, for example consumer goods, it has been more
difficult for marketers to develop relationship building strategies. O’Malley and Tynan
(2000) report that marketers in such sectors almost ignored relationship marketing
194 until the advent of database technologies which enabled direct marketing activities,
customer relationship management and relationship marketing to take place. As a
result, the term relationship marketing is often used as a catch-all phrase to describe
direct marketing or database marketing (Tapp, 2005).

Online relationships
In the online environment, Davis et al. (1999) proposed the idea that retailers apply a
trust building approach to consumer marketing relationships. Thus, relationships in
the virtual world are moderated by the participants’ ability to trust in each other. Thus
relationship exchanges are now occurring in multiple dimensions (Cannon and
Perrault, 1999) and customers can utilise many channels through which they can
communicate with organisations and through which organisations can direct
messages and encourage responses.
It is easy to see why some organisations might believe that because communication
is made so easy with the advent of sophisticated technology, they do not have to think
strategically about using direct marketing to kindle long-term relationships. However,
writers such as Godin (1999) remind us that having a customer’s permission to contact
them means that messages are likely to be better received. This is because customers
not only expect to hear from the organisation to whom they have given communication
permission, but also because they expect that the message will be both important and
relevant to them. Because the message is relevant, expected and has value for the
recipient, a positive response is more likely and a relationship can be started or
enhanced.
If an organisation that has received communication permission from a customer but
continues to send them irrelevant messages, then the organisations runs the risk of
alienating customers. In exchange for offering personal data and preferences,
customers have the right to expect that messages will be relevant. If messages are not
relevant and meaningful to individual customers, organisations run the risk of
alienating the very people with whom they wished to develop a relationship.

The basics of direct marketing

Now it is even more important now to remember the basics of direct marketing when
attempting to develop a relationship with a customer because of the alternative
channels they can use. Customers expect the organisation to know about them,
regardless of the channel they choose to access the organisation. The basics of direct
marketing, long espoused by practitioners and theorists alike, are:
.
the development of a database;
.
personalisation;
.
strategic customer relationships; and
.
measurement of results.
The database Direct marketing
Direct marketing requires that the marketer collects relevant information. The and relationships
information which an organisation stores about a customer should be fit for the
purpose intended. In other words, data should be up to date and error free. Getting the
single customer view (SCV) from the numerous touch-points to which a customer has
access is not simple (Lawson, 2008) However, it is important because it does not inspire
confidence in a customer to receive duplicate messages from an organisation, whether 195
by mail, e-mail, mobile or telemarketing. Messages sent to customers need to be
personalised in terms of the way they like to be addressed and the method used to
communicate. Customers then feel that they have control over the way in which
marketing messages are received. As a result, direct marketing can be seen to be less of
an intrusion. The database can be used to tailor relevant communications as well as
provide information for future profiling.
It is also important not to betray customer trust by allowing data to be used by
others. It is essential that data is kept safe and that privacy is not abused. Without
confidence in security, customers may limit their communication with the
organisation. The risk of fraud or financial abuse may also restrict customers from
using transactional technology (Tsiasmes and Siomkos, 2003). For this reason, a
relationship may not develop if offline channels are not available.

Personalisation
Digital printing and online facilities allow marketers to personalise products, pricing
and promotions to match their customer needs. It is no longer necessary to bombard
prospects with hundreds of offers (although my letter box and e-mail inbox denies
this!). If an organisation has any kind of relationship with a customer, even if it is only
one transaction, they know much about that customer that allows the personalisation
of future communications. Previous purchases can act as a platform for the offer of
similar or related products. Sophisticated analysis can yield suggested purchases
derived from the buying behaviour of similar customers, as Amazon’s systems allow.
Working on the principle that loyal customers are less likely to be price sensitive
Amazon experimented unsuccessfully with personalizing prices, where loyal
customers were offered higher prices than new customers (Cox, 2001). Some
customers believe that such dynamic pricing is illegal or at least should not be allowed
(Alreck and Settle, 2007). It is possible to personalise a price from analysis of previous
purchases. At the very least, some customers think that it is unfair to loyal customers
and boycott organisations that attempt price personalisation.

Strategic customer relationships

Most organisations will need both to keep their existing customers and acquire new
ones. Acquisition and retention strategies need to work together and concurrently to
maximise share of customer wallet and prevent customer churn. Loyalty-schemes may
help to get behavioural loyalty in the short term but do not necessarily achieve
combined attitudinal and behavioural loyalty. Just because a customer is habitually
loyal it does not mean that they will not transfer their custom to another provider if
triggered to do so. For this reason, organisations need to discover who their most
important customers are and how they are going to keep them. Organisations also need
to know how those customers were recruited in the first place, thus allowing the
DMIJ opportunity for the marketer to replicate their success by using the same approach for
2,4 acquiring similar customers (Sargeant, 2001) Satisfying these customers may not be
enough, there may be more that an organisation needs to do to prevent them from
leaving, such as allocating a named contact person, offering privilege access, special
events, etc. for such customers so that transferring their business to a competitor
becomes an emotional wrench for them.
196
Measuring response
Contemporary customer relationship management software can help marketing
organisations analyse their success with campaigns. What works for one customer
may not work for another, so testing different prices, offers and messages becomes
easier with sophisticated analysis capability. In addition, measuring the profitability of
a customer over time can help with retention strategies and point to opportunities for
cross selling and up-selling.
Measuring response builds into what we know about the customer and, hence,
future campaigns can utilise response information to help predict revenue and profit
levels.
Knowing what customers respond to can help with computing allowable spend
when designing customer acquisition strategy. The budget allowed for retaining
customers can also benefit from analysis of what has worked well before.
Marketers need to think about the most effective methods for achieving what they
are setting out to do. While sending out e-mails may be of low cost, they may not
generate the best level of response from customers. Similarly, mail-shots may generate
a varying level of response. In other words, an organisation needs to compare and
contrast the results from different media and tools to help them predict future response
rates and thence determine the most effective and efficient way to achieve their
objectives.

Conclusions
Direct marketing today necessitates entering into and maintaining a relationship with
a customer. Indeed, research conducted by Gyro International (2008) found that 83 per
cent of marketing directors questioned agreed they would be concentrating on existing
customers during the current difficult economic environment. Getting and keeping
loyal customers is an essential part of an organisation continuing in business when
threatened by recession and will continue to be important when the economy recovers.
The literature on direct marketing and relationship marketing has continued to
converge over the last few years. Now, they share a symbiotic strength that allows
contemporary marketers to utilise the best of both disciplines to establish and maintain
strong relationships with their customers.
There are many media and tools available to the marketer and these should be
chosen with care so that the best results can be achieved. Marketers should not forget
the basics of direct marketing when instigating a relationship as customers are
individual people or organisations with individual needs that need to be addressed.
Contemporary customers may be technology savvy but that does not necessarily mean
that they wish to use technology to communicate with organisations. They may not
wish to have any communication at all yet still remain loyal. As marketers, we have to
form our strategies based on customer needs and collecting information on what those Direct marketing
needs are is fundamental to marketing success. and relationships
If organisations are “up front” about why they collect data and be willing to share
that with customers, then customers are more likely to impart personal data
(D’Arcangelo, 2008). Seeking a customer’s permission to contact may benefit some
organisations, but such permission should not be abused by sending irrelevant or
untimely messages. Organisations should remember that personalisation is 197
fundamental to relationships and direct marketing. They should use the information
they have about customers to enhance a relationship. Failure to do so has negative
outcomes. First, a competitor could open communications and steal customers who feel
neglected by lack of relevant communication. Alternatively, customers may be
alienated by irrelevant, impersonal messages and choose to retract communication
permission.
It may be that customers are tempted to defect to competitors. But, rather than
accepting this as inevitable, direct marketers who adopt a relationship management
approach realise that their disloyalty indicates that there is something wrong with the
organisation (Gee et al., 2008).
Inviting customers to recount their dissatisfaction and invite them to talk about
what is prompting their imminent departure can be built into interactive tools and
direct marketing messages. Prompting discussion allows the direct marketer to
investigate and improve the problem area by, perhaps reviewing customer service or
developing preferential pricing for loyal customers.
Both disciplines of direct marketing and relationship marketing have something of
value to the other. The combination of the two strategies can only be of value and
benefit to both customers and organisations.

References
Alreck, P.L. and Settle, R.B. (2007), “Consumer reactions to online behavioural tracking and
targeting”, Database Marketing and Customer Strategy Management, Vol. 15 No. 1,
pp. 11-23.
Berry, L.L. (1983), “Relationship marketing”, in Berry, L.L., Shostack, G.L. and Upah, G.D. (Eds),
Emerging Perspectives on Services Marketing, American Marketing Association, Chicago,
IL, pp. 25-8.
Cannon, J.P. and Perrault, W.D. (1999), “Buyer-seller relationships in business markets”, Journal
of Marketing Research, Vol. 36, November, pp. 439-60.
Christopher, M., Payne, A. and Ballantyne, D. (1991), Relationship Marketing, Butterworth
Heinneman, Oxford.
Cox, J. (2001), “Can differential prices be fair?”, Journal of Product and Brand Management,
Vol. 10 No. 5, pp. 264-75.
D’Arcangelo, G. (2008), “Give CRM Data back to the Customers?”, CRM 2008 Annual Buyers
Guide, p. 24.
Davis, R., Buchanan-Oliver, M. and Brodie, R. (1999), “Relationship Marketing in electronic
commerce environments”, Journal of Information Technology, Vol. 14, pp. 319-31.
East, R., Sinclair, J. and Gendall, P. (2000), “Loyalty: definition and explanation”, paper presented
at Australia and New Zealand Marketing Academy Conference.
Gee, R., Coates, G. and Nicholson, M.N. (2008), “Understanding and profitably managing
customer loyalty”, Marketing Intelligence and Planning, Vol. 26 No. 4, pp. 359-74.
DMIJ Godin, S. (1999), Permission Marketing, Simon and Schuster, New York, NY.
2,4 Gronroos, C. (1994), “Quo Vadis marketing? Towards a relationship marketing paradigm”,
Journal of Marketing Management, Vol. 10 No. 5, pp. 347-60.
Gronroos, C. (2000), “The relationship marketing process: interaction, communication, dialogue,
value”, 2nd WWW Conference on Relationship Marketing, 15 November 1999 to
15 February 2000, European Journal of Marketing.
198 Gyro International (2008), Loyalty for Life, London, England, available at www.
gyrointernational.com/files/Loyalty_for_Life.pdf (accessed 31 October 2008).
Lawson, J. (2008), “The search for the SCV”, Database Marketing, October, pp. 13-14.
McDonald, M. and Christopher, M. (2003), Marketing: A Complete Guide, Palgrave Macmillan,
Basingstoke.
O’Malley, L. and Tynan, C. (2000), “Relationship marketing in consumer markets: rhetoric or
reality?”, European Journal of Marketing, Vol. 34 No. 1, pp. 717-815.
Sargeant, A. (2001), “Customer lifetime value and marketing strategy: how to forge the link”, The
Marketing Review, Vol. 1, pp. 427-40.
Tapp, A. (2005), Principles of Direct and Database Marketing, 3rd ed., Pearson Education, Harlow.
Tsiasmes, I.S. and Siomkos, G.J. (2003), “E-Brands: the decision factors in creating a winning
brand on the net”, Journal of Internet Marketing, February, available at www.array.deb.
com/jim/current/htm

Further reading
Kavali, S.G., Tzokas, N.X. and Saren, M.J. (1999), “Relationship Marketing as an ethical approach:
philosophical and managerial considerations”, Management Decision, Vol. 37 No. 7,
pp. 573-81.
Mitusis, D., O’Malley, L. and Patterson, M. (2006), “Mapping the re-engagement of CRM with
relationship marketing”, European Journal of Marketing, Vol. 40 No. 5, pp. 573-89.
Morgan, R.H. (2000), “Relationship marketing and marketing strategy”, in Sheth, J.N. and
Parvatiyar, A. (Eds), Handbook of Relationship Marketing, Sage, Thousand Oaks, CA,
pp. 481-504.
Ndubisi, N.O. (2007), “Relationship marketing and customer loyalty”, Marketing Intelligence and
Planning, Vol. 25 No. 1, pp. 98-106.
Papadopoulou, P., Andreaou, A., Kanellis, P. and Martakos, D. (2001), “Trust and relationship
marketing in electronic commerce”, Journal of Internet Research: Electronic Networking
Applications and Policy, Vol. 11 No. 4, pp. 322-32.
Sheth, J. and Parvatiyar, A. (2002), “Evolving relationship marketing into a discipline”, Journal of
Relationship Marketing, Vol. 1 No. 1, pp. 3-16.

Corresponding author
Sally Harridge-March can be contacted at: spharridge-march@brookes.ac.uk

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints