Direct marketing is a form of advertising in which a marketer seeks to elicit a response directly from a consumer. The response could be an order, a visit to a website, or a call-to-action.
The communication could be in several different formats, such as e-mail, telemarketing, or even point-of-sale transactions. The marketer should be able to measure consumer response, and be able to determine whether the consumer accepted the offer.
Types of Direct Marketing
Direct marketing is all around you. Half the time you probably don't even realize it.
You wake up and open the front door to grab the newspaper. You open it up to read, and out falls a circular for a local car dealership. It has a bunch of small photos of used cars for sale. You are not interested in a car so you toss it.
You grab some coffee, and check your e-mail. Pottery Barn sends you an e-mail telling you about a sale, and offers a 25 percent discount on any one item. And the coupon expires tonight, at midnight. You delete it.
The phone rings, and it is Verizon. They thank you for your patronage, and let you know about a bundled deal they have for Internet, phone, and television. You pass.
And it's only 8:00 a.m.!
See how direct marketing surrounds you?
Let's look at the various types of direct marketing.
One of the most popular types of direct marketing is e-mail marketing. With e-mail marketing, a company will send e-mails that detail sales, special promotions, and invitations. This is often an inexpensive type of marketing that is inexpensive to design. E-mails can be sent 24/7, and marketers are able to measure the campaign's response.
Mobile marketing is a newer and emerging form of marketing that is showing excellent success. This form of marketing uses cellphones, smartphones, tablets, and other mobile devices to reach the customer.
Mobile marketing uses text messages and advertising to reach the customer. Using text messages is becoming more and more difficult though, as a marketer is unable to text a customer without their consent.
More and more marketers are using smartphone applications to get their message across. A popular form is through free game applications. Because the application is free, the customer understands they will have ads during the game. These ads are targeted to the demographics of the person most likely to use the app.
So, a game geared to teenage boys will have ads geared toward teenage boys. Often these ads are banner ads, similar to banner ads on a website, but sized down to fit the mobile screen.
Some applications also offer push notifications, which are direct messages sent occasionally to a customer. These types of ads are usually a part of a marketing campaign.
A form of mobile advertising, and successful type of direct marketing
Most consumers are familiar with telemarketing. This form of marketing was more popular before the advent of cellular technology. In this form of marketing, the marketer contacts the customer via telephone. This is also often referred to as cold calling, which isn't the ideal. A marketer really prefers a telemarketing list that has "qualified leads," meaning the customer has already been vetted in some way, and is more likely to respond to the ad than a normal cold call.
However, the introduction of the national "Do Not Call Registry" has made it more difficult for marketers. With this law, a marketer must have consent of the customer to make a call. A customer can opt out of calls by placing their name and number on this list.
"Do Not Call" Registry
A list that prevents telemarketers from calling a consumer
What would we do without coupons? There are even television shows only about couponing!
Coupons are used in both print and digital media to reach a customer. Traditionally coupons are in print, and are used in inserts in newspapers. They offer discounts on products, usually in the food and beverage sector.
Coupons are also being offered in supermarkets at checkout. The coupon software is able to see what a customer is buying, and then prints a coupon that would be most valuable to that customer. This method allows the marketer to direct a personalized coupon at a targeted customer.
Traditional coupons have also made their way online. Customers can visit online couponing sites and either download and print the coupon, or "clip" it and store it in a "digital wallet." Customers can access this digital wallet through their smartphones, which is another way for the marketer to reach the customer.
There are websites devoted to coupons and "daily deals" in which a customer can sign up for certain types of coupons. A customer that enters their e-mail address is a dream for a marketer. That e-mail address is incredibly valuable.
There are also sites devoted to promotional codes, which offer discounts on a majority of online retailers. A promotional code is used upon checkout to get a fixed amount or a percentage discount on a sale.
Direct mail is print advertising a customer receives at home or the office. Most of this advertising is through advertising circulars or catalogues. Think, when you get your mail. You grab a handful of advertising, and you may only have a letter or a few bills. The majority of the mail is considered "junk mail." This bulk mail is very popular in the food and beverage industry, as well as financial services and tourism.
What type of direct mail has been successful for you?
Do you remember receiving AOL CDs in the mail? Were those successful for you?
In the U.S., over 90 billions pieces of direct mail are mailed every year.
Marketers prefer to use targeted advertising to reach the customer, since it will result in a better rate. For example, a family with young children will receive advertisements geared for them, such as toys, children's clothing, etc.
Another type of direct mail is the insert mailer. This is the ad that is tucked into newspapers, catalogues and magazines. A marketer can also use demographics here. For example, a women's magazine would have inserts that a woman would find interesting or helpful.
An instruction meant to provoke an immediate response
Another category is direct response marketing.
With this type of marketing, an advertiser has a goal of gaining an immediate response from the consumer. Think of the infomercial.
Direct response marketing takes many forms, such as radio, television, and the Internet.
First, let's discuss DRTV, "direct marketing via television," which is usually in one of two forms -- a half-hour segment or an hour long one.
Think of a time when an infomercial made you buy something you hadn't wanted to buy previously.
What made the infomercial so compelling?
Did you ever regret the purchase?
There are also direct response short-form television ads, similar to regular commercials. They are immediate response, in that they end with a telephone number and ask the viewer to call. They also list their website.
Another type of DRTV are home shopping networks. Think of QVC and HSN. These are television networks with the single goal of selling to the consumer.
There is also direct response radio. These types of ads are similar to television ads, in that they have a specific call-to-action in which they want the consumer to make a call or visit a website. They provide a toll-free number, just like a television ad.
Lastly, there is "out of home" direct response advertising, which includes billboards, in-store signs, signs on the side of buses and taxis, ads before movies, and in-flight magazines.
These are also very successful, because they can be targeted to a certain audience. Ads placed on a college campus can be geared toward the college-aged market, and ads in in-flight magazines can be geared toward travelers.
Direct selling is when a seller uses personal contact to sell to a customer. There are door-to-door salesmen, plus Tupperware parties, jewelry parties, and many others.
Have you ever attended a Tupperware party, or other form of in-home direct selling?
Was it successful? Did you purchase something?
How to Target Users
The best way for a marketer to direct market to consumers is to use a customer database. It provides the best value for the marketer and the user. The database can provide customer profiles for each target market.
The database is able to capture all information about a consumer that a marketer could want. Such information includes ages, income, gender, and even previous mail order purchases. Using this information, the database can identify the following:
What the consumer purchases most frequently
What purchases were most recent
How much the consumer spends on each transaction
These databases are also able to accomplish the following:
Identify potential customers
Decide which customers are best for a particular product
Use to help build customer loyalty
Once a marketer has a customer database, they can use it to gain additional insight, and increase customer value. This is done via:
Customized products geared to the consumer
The ability to interact with the consumer during the transaction
The ability to customize marketing experience
Once the marketer accomplishes this, the marketer can better use his resources to build customer loyalty. Companies can often get a better response using direct marketing using regular mass marketing.
Measuring Direct Marketing Response
In order to have a successful direct marketing campaign, a marketer must be able to measure the efficacy of the campaign. Using this, the marketer is better able to target desired markets and test business objectives. These measurements are key to direct marketing success.
The marketer starts by compiling information about costs and expenses, and uses that to relate to how many pieces of direct marketing should be sent. Then the marketer can track the amount of revenue per piece of mail sent.
The marketer must analyze the direct marketing campaign to improve direct marketing performance. If several types of direct mail are used, the marketer should be able to analyze the response rate for each type used.
Ethics in Direct Marketing
As in regular marketing, direct marketing has its own set of ethics. Direct marketing can be bad, and such campaigns should not be used. Marketers should stay away from any campaign that involves fraud or deception. Invasion of privacy is also something that should always be avoided.
Think of being at home and eating dinner with your family. You get a phone call. It is someone trying to sell you something. No matter what the product, you will be unhappy for them bothering you during your meal.
Think of all the e-mail spam you receive. So much e-mail spam is sent that e-mail providers have dedicated spam folders so spam doesn't clutter up regular e-mails. This type of marketing is almost always unsuccessful because of how it can negatively affect the consumer.
Direct marketing should also never use information that is misleading. An advertisement that exaggerates size or price is deceptive -- period. This is misleading, and this type of marketing will create a negative image in the mind of the consumer. In the cases of misleading or untrue information, this type of marketing could be illegal.
A direct marketing campaign should always focus on the product. A negative or misleading ad campaign will have long lasting ramifications for the business.
Have you ever purchased an item through direct marketing that ended up having misleading information?
What was misleading?
Online marketing is a huge form of marketing, one that could fill an entire course itself. Online advertising is similar to direct marketing, except that it occurs entirely online.
Online marketing is particularly successful for the marketer because there are tools enabling the marketer to gauge the success of the marketing campaign. It also allows the marketer to target smaller segments that direct marketing can't.
Direct marketing that is entirely online
Think of your online experience. You log in to check your mail, and maybe visit a few news sites. When you go to the news site, you will see ads. They are everywhere.
Let's say you are looking for a website that sells sleeping bags. You go to a search engine and search for "sleeping bags." You get pages and pages of results, and on the right side of the page, you will see ads. These ads are directly related to what you just purchased. These are very successful for businesses, because they can direct ads at very limited targets. A sporting goods store can direct ads at just people who are looking for sleeping bags.
Other websites utilize advertising such as banner ads and pop ups.
Social media is another example of where online marketing works. When you use Facebook, there are ads everywhere. And again, advertisers and marketers are able to direct the ads to the users exact specifications. This is also the case with other social media sites like Twitter.