Direct Marketing ' ' '

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Direct Marketing . . .
Fueling the Engine for the Next Generation of
Marketing
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UCLA Coach John Wooden
Simplicity Defined Basketball is a game of
threes Pass, Drive, Shoot.
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Igniting the Spark Getting Back to the Basics

• Direct Marketing 101 What are the reasons we
  are still in this business?
• Direct Marketing - Any communication designed to
  generate
• - a response
• - a direct order
• - a sales lead or traffic for a business
• Consumers with higher education levels are more
  receptive to direct marketing
• 50 - 60 of the US Population Buys by DM

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Getting Back to the Basics

• Direct Marketing 101 Seven Principles for DM
  Success (DMA)
• Establish Your Objective
• Target the Right Audience
• Good Copy - Demonstrate USP
• Make Responding Easy
• Think Campaign or Strategy, Not a 1-Shot Deal
• Research and Test (Continually)
• Make the Offer Fit Your USP

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Igniting The Spark Latest Trends From Direct
Marketing Association

• Direct Marketing It Still Works
• This year, American marketers will spend nearly
  205 billion dollars on direct-response
  advertising marketing
• In 2002, direct marketers generated some 2
  trillion in sales, a 10 percent increase over
  2000
• Direct mail has emerged as the most preferred
  marketing channel of the industry

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Latest Trends From The DMA

• DM Building Brand Loyalty
• Credit Cards How many people still have a card
  from first group to issue them one?
• Catalogue mailings Do they work? What is the
  lift to most retail stores? William Sonoma?

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Direct Marketing Trends and Statistics

• Why does Insurance via Direct Mail Perform Well?
  Danger Lurks Everywhere (Wall Street Journal,
  4/24/2003)
• Fixation on risk, Fed by Labs, Law and Media, all
  haunt worlds safest nation
• Easier to scare than unscare
• 12 times more likely to lose their lives on a
  highway as at the hands of a hostile fanatic

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Progeny Marketing Innovations

• A Three-Pronged Approach to Providing Winning
  Direct Response Strategies
• Creative Testing Element and Breakthrough
  Creative Testing Designed to Beat Control
• Channel Testing Testing New Methods of Delivery
  to Meet Needs of Clients and Customers (Statement
  Inserts, Outbound TM, etc.)
• New Product Testing Developing Products To Meet
  A Variety of Customer Needs and Offer Clients a
  More Diversified Product Contact Strategy

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Progeny Marketing Innovations

• New Product Testing for 2003
• Pet Health Insurance
• Cancer Care
• Hospital Indemnification (HIP)
• 1,000,000 Accident Protection Plan
• Comprehensive Accident
• Simplified Issue Term Life
• Channel Testing
• Inbound Telemarketing (DM Generated Calls)
• Statement Inserts
• Call Transfers

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Revenue Strategy
Traditional Mail Cycle with added products
Cycle Repeats
TM - - Ongoing
Creative Test - - Ongoing
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NCF Insurance ServicesDirect Marketing
InitiativesABIA Presentation - October 2003
Steven R. Knocklein Senior Vice President
Insurance Services
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Direct Marketing Initiatives
About National Commerce Financial

• A provider of financial and consulting services
  through a national network of banking and
  non-banking affiliates. Banking affiliates
  include National Bank of Commerce, Central
  Carolina Bank, First Market Bank, and NBC Bank,
  FSB
• Headquartered in Memphis, Tennessee
• 23 billion in assets.
• Almost 500 branches.
• NCF branches are located in 14 of the nation's
  fastest growing metropolitan areas throughout the
  southeast. States include Tennessee, North
  Carolina, South Carolina, Virginia, West
  Virginia, Georgia, Arkansas, Mississippi

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Direct Marketing Initiatives
Direct Marketing - Needs Approach verses Revenue
Approach
How does NCF distribute all of the products that
our customers need and want profitably? Direct
Marketing provides a low cost distribution
platform to NCF customers. NCF drives
approximately 85 of the revenue from direct
marketing to the bottom line while providing our
customers with products and services to meet
their needs and concerns.
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Direct Marketing Initiatives
Direct Marketing - Needs Approach verses Revenue
Approach

• What are our customers concerns?
• - Access to Health Care
• - Asset Protection
• - Maintaining their standard of living

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Direct Marketing Initiatives
Direct Marketing - Needs Approach verses Revenue
Approach

• Due Diligence - what are the components of a
  good program?
• Is the offering good for our customer?
• Can the program be smoothly executed?
• What is good customer penetration for the
• offering?
• Will the program generate significant
• revenue?

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Direct Marketing Initiatives
Direct Marketing - Financial Results/
Profitability

• 35 Increase in Revenue August 2002 verses August
  2003.
• 85 Profit Margin
• Provides increased revenue per household
• Products leverage customer base and helps drive
  NCF
• efficiency ratio.

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Direct Marketing Initiatives
Direct Marketing - Keys to Success

• Education and support of Senior Management Team.
• Education, Support and communication to branch
  network and
• call center.
• - Any mailing will generate customer traffic to
  the branches.
• - Provide Branches with information necessary
  to quickly and efficiently route the
  customer.
• - Leverage Institutions Intranet to make
  information readily accessible.

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Direct Marketing Initiatives
Direct Marketing - Keys to Success - continued

• Product Partners that can manage programs that
  work.
• Quickly and efficiently service customers (answer
  
• questions, billing,cancellations).
• Provide products beyond ADD (commitment to RD
  of
• new products, develop products that meet the
  needs of
• customers).
• Strength and Staying Power of Partner.
• Pay Revenues from programs in a timely manner.

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Bank One Card Services
Doug Corrigan First Vice President
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Getting Back to Basics

• Execution is the key
• Easy to get single minded Make Money
• Dont forget
• Marketing expense (all elements)
• Operations expense related to marketing
• Operations expense not related to marketing
• Legal and compliance
• Long term relationship effect
• Analytical needs
• Organizational awareness
• Organizational Pride

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Getting back to basics

• The easy way out
• Pitch every card member something
• Lots of Products and Partners
• No Marketing Budget
• Little analysis
• No modeling
• One Channel

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Getting back to basics

• The Right Way
• Establish your goals (NPV, PTP, ROI, NPV/CPA)
• Account for EVERYTHING!
• MEASURE MEASURE MEASURE
• Watch the back end
• Select good partners
• Get the operations right

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Getting back to basics

• For Bank One, Over the last two years,
• Customer satisfaction for our enrollees is now 2
  higher than the the rest of the card base
• We have strategic long term partnerships
• Our business is growing for the first time in 3
  years
• We are getting back to the basics

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QUESTIONS?
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• Thank You!