What is Direct Marketing? Benefits, Channels, Characteristic

What is Direct Marketing?

Direct marketing is a form of advertising that allows businesses and other organizations to communicate directly to the prospects or customers through a variety of media. Direct marketing focuses on the customer, data, and analysis.

Therefore, besides the actual communication, a direct marketing campaign incorporates actionable segments and use pre- and post-campaign analytics to measure results.

Characteristics of Direct Marketing

Following are the some salient characteristics of direct marketing that differentiate the direct marketing from other types of marketing:

• In direct marketing a database of relevant information about prospects, customer and business is used to develop a target market with common interests, traits or characteristics.
  
  
• The advertising campaign or marketing messages are addressed directly to the identified customers or prospects.
  
  
• The addressability comes in a variety of forms including email addresses, phone numbers, fax numbers, postal addresses, and web browser cookies.
  
  
• Direct marketing always seeks to drive a precise “call to action.” For example, an advertisement may ask the prospect to call a free phone number, mail in a response or order, or click on a link to a website.
  
  
• Direct marketing emphasizes traceable, measurable responses. It also emphasizes maximizing response rates by testing while minimizing advertising expenses when engaging prospective customers, regardless of the medium used.

Direct marketing is practiced by businesses of all sizes. A direct advertising campaign aims to deliver a good return on investment by showing how many potential customers responded to a clear call to action.

This is in contrast to general advertising, which eschews calls for action in favor of messages that build prospects’ emotional awareness or engagement with a brand.

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Benefits of Direct Marketing

• It has been observed that the direct marketing is an attractive mode of communication for many marketers, because the results of the direct marketing can be measured directly at the same time.
  
  For example, if a marketer sends out 1,000 solicitations by mail and 100 respond to the promotion, the marketer can say with confidence that campaign led directly to 10% direct responses. This metric is known as the ‘response rate,’ and it is one of many clearly quantifiable success metrics employed by direct marketers.
  
  In contrast, general advertising uses indirect measurements, such as awareness or engagement, since there is no direct response from a consumer. Measurement of results is a fundamental element in successful direct marketing.
  
  
  
• The significant benefits of Direct Marketing is, it enables promoting products or services that might not have a strong brand.
  
  Products or service with a sound value proposition, matched with an attractive offer, supported with effective communication, delivered through a suitable direct marketing channel and targeting the relevant customer segment can result in very effective cost of acquisition albeit the brand might be relatively unknown.
  
  Relative to other channels of distribution (say retailing) Direct Marketing as a practice principally relies on the proposition, offer, communication, choice of channel and the target customer and so less dependent on the brand strength.
  
  
  
• The Internet has made it easier for marketing managers to measure the results of a campaign. This is often achieved by using a specific website landing page directly relating to the promotional material.
  
  A call to action will ask the customer to visit the landing page, and the effectiveness of the campaign can be measured by taking the number of promotional messages distributed and dividing it into the number of responses.
  
  Another way to measure the results is to compare the projected sales or generated leads for a given term with the actual sales or leads after a direct advertising campaign.

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Channels of Direct Marketing

Any medium of marketing communication, which can be used to transmit or deliver a message to a customer can also be used in direct marketing.

Following are some Channels of Direct Marketing:

Email marketing

Email is the most widely used methods in the process of direct marketing. The basic reason for the popularity of email is that it is relatively inexpensive to design, test, and send an email message. It also allows marketers to deliver messages around the clock, and to accurately measure responses.

Online tools

With the expansion of digital technology and tools, direct marketing is increasingly taking place through online channels. Most online advertising is delivered to a focused group of customers and has a trackable response.

Display Ads

Display Ads are interactive ads that appear on the Web next to content on Web pages or Web services. Formats include static banners, pop ups, videos, and floating units. Customers can click on the ad to respond directly to the message or to find more detailed information.

According to research by eMarketer, expenditures on online display ads rose 24.5% between 2010 and 2011.

Search

49% of US spending on Internet ads goes to search, in which advertisers pay for prominent placement among listings in search engines whenever a potential customer enters a relevant search term, allowing ads to be delivered to customers based upon their already-indicated search criteria.

This paid placement industry generates more than $10 billion for search companies. Marketers also use search engine optimization to drive traffic to their sites.

Social Media

Social Media Sites, such as Facebook and Twitter, also provide opportunities for direct marketers to communicate directly with customers by creating content to which customers can respond.

Mobile

Through mobile marketing, marketers engage with prospective customers and donors in an interactive manner through a mobile device or network, such as a cellphone, smartphone, or tablet.

Types of mobile marketing messages include: SMS (short message service) – marketing communications are sent in the form of text messages, also known as texting. MMS (multimedia message service) – marketing communications are sent in the form of media messages.

Telemarketing

Another common form of direct marketing is telemarketing, in which marketers contact customers by phone. The primary benefit to businesses is increased lead generation, which helps businesses increase sales volume and customer base.

The most successful telemarketing service providers focus on generating more “qualified” leads that have a higher probability of getting converted into actual sales.

Voicemail marketing

Voicemail marketing emerged from the market prevalence of personal voice mailboxes, and business voicemail systems. Voicemail marketing presented a cost-effective means by which to reach people directly, by voice.

Voice-mail courier is a similar form of voice-mail marketing with both business to business and business-to-consumer applications.

Broadcast faxing

Broadcast faxing, in which faxes are sent to multiple recipients, is now less common than in the past.

Couponing

Couponing is used in print and digital media to elicit a response from the reader. An example is a coupon which the reader receives through the mail and takes to a store’s check-out counter to receive a discount.

• Digital Coupons: Manufacturers and retailers make coupons available online for electronic orders that can be downloaded and printed.
  
  
  Digital coupons are available on company websites, social media outlets, texts, and email alerts. There are an increasing number of mobile phone applications offering digital coupons for direct use.
  
  
  
• Daily Deal Sites offer local and online deals each day, and are becoming increasingly popular. Customers sign up to receive notice of discounts and offers, which are sent daily by email.
  
  Purchases are often made using a special coupon code or promotional code. The largest of these sites, Groupon, has over 83 million subscribers.

Direct response marketing

Direct Response Marketing is designed to generate an immediate response from consumers, where each consumer response (and purchase) can be measured, and attributed to individual advertisements.

This form of marketing is differentiated from other marketing approaches, primarily because there are no intermediaries such as retailers between the buyer and seller, and therefore the buyer must contact the seller directly to purchase products or services.

Direct-response marketing is delivered through a wide variety of media, including DRTV, radio, mail, print advertising, telemarketing, catalogues, and the Internet.

Direct response mail order

Mail order in which customers respond by mailing a completed order form to the marketer. Mail order direct response has become more successful in recent years due to internet exposure.

Direct response television

Direct marketing via television (commonly referred to as DRTV) has two basic forms: long-form (usually half-hour or hour-long segments that explain a product in detail and are commonly referred to as infomercials) and short-form, which refers to typical 30-second or 60- second commercials that ask viewers for an immediate response (typically to call a phone number on screen or go to a website).

TV-response marketing-i.e. infomercials – can be considered a form of direct marketing, since responses are in the form of calls to telephone numbers given on-air.

This allows marketers to reasonably conclude that the calls are due to a particular campaign, and enables them to obtain customers’ phone numbers as targets for telemarketing. One of the most famous DRTV commercials in India is Teleshopping and WOW TV.

Direct response radio

In direct response radio, ads contain a call to action with a specific tracking mechanism. Often, this tracking mechanism is a “call now” prompt with a tollfree phone number or a unique Web URL. Results of the ad can be tracked in terms of calls, orders, customers, leads, sales, revenue, and profits that result from the airing of those ads.

Direct response magazines and newspapers

Magazine and newspaper ads often include a direct response callto- action, such as a toll-free number, a coupon redeemable at a brick-and-mortar store, or a QR code that can be scanned by a mobile device—these methods are all forms of direct marketing, because they elicit a direct and measurable action from the customer.

Other direct response media

Other media, such as magazines, newspapers, radio, social media, search engine marketing and e-mail can be used to elicit the response. A survey of large corporations found e-mail to be one of the most effective forms of direct response.

• Direct mail
• Insert media
• Out-of-home
• Direct selling
• Grassroots/community marketing
• The door-to-door distribution