What Is Direct Marketing?Direct marketing consists of any marketing that relies on direct communication or distribution to individual consumers, rather than through a third party such as mass media. Mail, email, social media, and texting campaigns are among the delivery systems used. It is called direct marketing because it generally eliminates the middleman, such as advertising media. Show
Key Takeaways
How Direct Marketing WorksUnlike traditional public relations campaigns pushed out through a third party such as media publications or mass media, direct marketing campaigns operate independently to directly communicate with target audiences. In direct marketing, companies deliver their messaging and sales pitches by social media, email, mail, or phone/SMS campaigns. Although the number of communications sent can be massive, direct marketing often attempts to personalize the message by inserting the recipient's name or city in a prominent place to increase engagement. The call to action is an essential part of direct marketing. The recipient of the message is urged to immediately respond by calling a toll-free phone number, sending in a reply card, or clicking on a link in a social media or email promotion. Any response is a positive indicator of a prospective purchaser. This variety of direct marketing is often called direct response marketing. Targeting in Direct MarketingA direct marketing pitch that is delivered to the widest possible audience is probably the least effective. That is, the company may gain a few customers while merely annoying all of the other recipients. Junk mail, spam email, and texting all are forms of direct marketing that many people can't get rid of fast enough. The most effective direct marketing campaigns use lists of targeted prospects in order to send their messages only to the likeliest prospects. For example, the lists might target families who have recently had a baby, new homeowners, or recent retirees with products or services that they are most likely to need. Catalogs are the oldest form of direct marketing, with a history that dates back to the latter half of the 19th century. In modern times, catalogs are usually sent only to consumers who have indicated an interest in a previous purchase of a similar product while social media has emerged as the most modern form of direct marketing. Targeting strategies can also be used on social media when putting out ads; platforms like Facebook allow brands to choose the age, gender, demographics, and even interests of potential new audiences that an ad could reach. Many companies engage in opt-in or permission marketing, which limits their mailing or emailing to people who have indicated a willingness to receive it. Lists of opt-in subscribers are particularly valuable as they indicate a real interest in the products or services being advertised. What is Direct Marketing?The Advantages and Disadvantages of Direct MarketingDirect marketing is one of the most popular and effective marketing tools in order to establish a direct connection with a target audience. Direct marketing has its appeal, particularly to companies on a shoestring budget who can't afford to pay for television or internet advertising campaigns. Especially as the world becomes increasingly connected through digital platforms, social media becomes an effective way to market to customers. The main drawback with direct marketing, however, is the profile-raising and image building that comes with a third party accrediting your brand. For example, although a company may pay for a sponsored article in The New York Times, this can greatly enhance a brand's image and can help "seal the deal" with customers who are willing to trust a supposedly unbiased source or external opinion. By its nature, the effectiveness of a direct marketing campaign is easier to measure than other types of advertising, since brands can analyze their own analytics, track unique source codes, and tweak strategies effectively without going through a middleman. The company can measure its success by how many consumers make the call, return the card, use the coupon, or click on the link. Direct marketing enables you to communicate directly with individuals, rather than the mass market. This highly targeted and personalised approach can help grow your business in a cost-effective way. On this pageUnderstanding direct marketingDirect marketing:
In comparison, advertising is above-the-line marketing, with the goal to reach a mass audience, typically through broadcast media. A direct marketing campaign can be standalone or part of a bigger, integrated marketing program, which could include advertising your business. Benefits of direct marketingDirect marketing is part of the promotional mix. Because it communicates directly with customers, it can deliver a higher conversion rate (the percentage of the targeted group that, for example, buys your product) at a lower cost. Direct marketing:
A successful direct marketing program will:
Read more about marketing on a small budget. Steps to a successful direct marketing campaignTo be successful, your campaign must:
Before you start...Take some time to think about direct marketing you've received. Ask yourself:
Follow this guide to plan your direct marketing activities. Based on your marketing plan, you may have identified direct marketing opportunities. This would include what you want to achieve with a campaign and KPIs to measure your progress. You may, for example, want customers to:
It's important to set clear and realistic goals. These may be linked to:
Consider the total budget you documented in your marketing plan. Then think about factors like:
There will be major differences in costs between, for example:
Link the campaign budget with your KPIs to ensure you're on track to achieve a positive return on marketing investment. Because direct marketing is a highly targeted tactic, it's very important to select the right target audience. Make sure you:
You can choose the right audience by looking at your:
You can have different marketing programs for specific customer groups:
Think about how you can use direct marketing at every stage of the customer journey. An important part of your campaign is to create attractive offers that will encourage customers to give the response you want. Consider this your unique selling point that can create a direct response from customers. Ask yourself:
Remember that you can customise these offers for different customer groups. Try to create content that your customers would like to share on social media and make it easy for them to share it. Select the direct marketing techniques that best fit the campaign you're running. To decide which channels to focus on, consider things like:
Read more about the advantages and disadvantages of different types of direct marketing below. Consider delivering your campaign in phases. This will enable you to:
To run a campaign, you need to finalise and implement the following 3 elements. Creative – develop your communication approachAs part of your campaign planning, you would have decided on offers and channels. Suitable creative elements (i.e. visual design and written copy) will now need to be developed. You could include variations to test. Production – make the content to suit the mediumOnce you have your contact list, you need to build your direct marketing material or content in the correct format. This may require technical expertise for digital communication or working with a supplier for printed materials. Distribution – deliver your communication to individualsThis is how you will go to market with your direct marketing contact – which could be telephone, mail, email, etc. You may need to engage with external suppliers such as mail houses to help manage the distribution of your direct marketing. Using professional servicesTo make an impact, don't cut corners on the design. Design is critical to the success of your direct marketing so consider using the services of a professional designer and copywriter. Think about your proposed direct marketing campaign and ask yourself:
Find out about using professional marketing services. Direct marketing provides direct feedback. It's a great way to test:
Direct marketing results can be tracked throughout the campaign, so you'll have a real-time view of how different customers are responding to different offers. Learn and improve as you go. Evaluate the results against the KPIs you've identified and use the insights to make adjustments. Calculate your return on investmentFor example, imagine you planned and delivered the following campaign:
The total cost of your direct mail campaign was $250. The total profit generated was $375 (i.e. $25 per customer). So, this campaign resulted in a positive return on marketing investment of $125 (or 50%). You can use our ROI calculator. Test and learnYou can use A/B testing to compare the performance of 2 versions of your creative, production or distribution. For example, you can change and experiment with variables such as:
Use what you've learnedFor every direct marketing campaign, keep a record of:
Also keep a record of your response rates as these will become a benchmark that you can strive to outperform with your future campaigns. Finally, think about initiatives that could become more permanent rather than one-off. Your data will provide all the evidence you need. For example, you may introduce 'always on' direct marketing initiatives such as:
Tips for effective direct marketing
Types of direct marketingIt's helpful to understand the advantages and disadvantages of different types of direct marketing. Remember:
Direct mail is personalised and addressed mail that is sent through the post. It's one of the most recognised forms of direct marketing. It is usually distributed to either:
Make sure that your business remains compliant with privacy laws. Addressed direct mail can be:
The response rate to your direct mail campaign will be influenced by the quality of the:
You could also consider:
Letterbox drops distribute unaddressed mail in a specific area. It's a simple, proven and inexpensive way to reach customers. Attention-grabbing leaflets, flyers, brochures and catalogues can work well to promote products and services with broad appeal. As this is a less targeted form of direct marketing, the response rates are typically lower. You can do the deliveries yourself in your local area or use distributors. You could also take a more targeted approach and distribute your marketing collateral (subject to the relevant approvals), at places such as:
To improve your direct marketing effectiveness, consider how you can:
Telemarketing involves contacting existing or potential customers by phone. The aim is usually to turn contacts into prospects (people who might buy your products or services). People can react negatively to telemarketing and response rates can be low. To be as effective as possible, make sure:
There are different types of telemarketing:
To run a telemarketing program, your business can either:
Email marketing is a popular, measurable and cost-effective way to communicate directly with your customers. You can use electronic direct mail in different ways, for example:
To run effective email marketing, you need the right:
Be sure to:
Read more about making the most out of email marketing. Text messaging is a personal, instant and low-cost form of communication. It's also less likely to be ignored as people usually read text messages. However, this also means you need to:
Text messaging can be effectively used for communication such as:
Remember there are strict privacy regulations for commercial text messaging. When you consider SMS marketing – be aware, be specific and be responsible. Find out more about targeting mobile devices in location-based marketing. Direct selling can be an efficient way to grow a flexible and low-cost business. This typically involves independent salespeople who sell products and services:
The traditional direct selling methods include:
Disadvantages of direct selling include the:
To professionally market your business through direct sales:
Direct marketing to-do list
Video: Developing your marketing activitiesWatch our video to help turn your marketing strategy into an action plan of activities to promote your business and grow your sales. Topics include:
Transcript of video Direct marketing laws and regulationsDirect marketing is governed by important privacy regulations. If you're planning to run a direct marketing campaign, you must:
Australian Privacy PrinciplesThe Australian Privacy Principles (APP) explain how businesses should collect, use, secure and disclose information about individuals. In particular, you can refer to the section on direct marketing. Read more about how your business must comply with the Privacy Act 1988 (Cwlth). Do Not Call RegisterThe Australian Communications and Media Authority (ACMA) manages a Do Not Call Register to offer consumers the choice to opt out of receiving calls and faxes made from telemarketing call lists. Find out more about your obligations under the Do Not Call Act 2006 (Cwlth). The Spam ActThe Spam Act 2003 (Cwlth) applies to email marketing and text messaging. Under Australian law, it is illegal to send commercial electronic messages that are unsolicited. Discover more about the spam regulations and your responsibilities. You can buy a list of contacts matching your target profile only if these contacts have agreed to receive messages from third parties. Industry self-regulationThe principal industry body, Association for Data-Driven Marketing and Advertising (ADMA), provide up-to-date information on responsible and effective direct marketing practices. Also consider...
Under which promotional mix strategy does the producer direct its marketing?Pull Strategy
The producer/manufacturer directs its promotional mix at ultimate consumers. The goal is to encourage the customers to ask the retailer for the product.
Which of the following promotion mix approaches involves a producer directing their marketing activities toward final consumers to induce them to buy the product?Pull strategy is when the producer directs its marketing activities toward the final consumers to induce them to buy the product and create demand from channel members.
What are the 4 types of promotion mix?The four major elements of the promotion mix are Advertising, Sales Promotion, Personal Selling, and Public Relations.. Advertising. Any paid form of non-personal presentation and promotion of goods and services by an identified sponsor is known as Advertising. ... . Sales Promotion.. What are the 5 promotional mixes?A promotional mix is an allocation of resources among five primary elements:. Advertising.. Public relations or publicity.. Sales promotion.. Direct marketing.. Personal selling.. |