Direct Marketing: What is it?
Marketing is one of the most essential aspects of selling a product or service for your business. It’s the wheel that drives an organization forward with increasing and reoccurring sales. By creating public knowledge of your product or service and reaching targeted customers, relationships are both formed and sustained. There are various ways to market your business and what it provides. For example, there’s television advertisements, promotional letters, or you can go through third-party retailers. Direct marketing has to do with marketing and selling products or services directly to the public, rather than through a retailer. This means there is no middleman or utilized. For example, targeted online ads, direct mail, flyers, handouts, text messaging, telemarketing, websites, and door-to-door solicitation are all various forms of direct marketing.
Through direct marketing, you can generate new business and increase your current business’s public profile. This is in part due to the effectiveness of highly targeted advertising rather than generalized mass promotion. Furthermore, highly targeted marketing is a fraction of the cost of broadcast advertising. This makes it much more beneficial for an organization on a budget.
Different Types of Direct Marketing
When put into practice, there are many avenues in direct marketing that are possible. These avenues can be grouped into eight different and generalized categories.
This is the most common form of direct marketing and involves all postal mail. This includes advertisements such as catalogs, postcards, and envelope mailers. It is best to organize your list of recipients geographically and send direct mail to all postal customers in the chosen area. According to Pel Hughes, the average cost per lead for direct marketing is $51.40. While $51.40 isn’t the best cost per lead, it’s certainly better than many others. Check out our blog post titled “How Many Leads to Expect Per Marketing Channel” for more info on this.
Types of Direct Mail:
- Catalogues – bound, multi-paged advertisements
- Self mailers – a single-printed folded sheet
- Envelope mailers – inserts are inside an envelope
- Postcards – promotional messages are on one side with the customers address on the other
- Snap mailers – folds or seals with pressure
- Dimensional mailers – a small box
- Intelligent documents – contains personalized information from a database
This is a useful tactic to acquire new customers in large volumes. It is also a useful follow-up strategy after implementing other forms of direct marketing. It is most effective when using well-researched customer data to match individual’s profiles to the possible desired products. However, customer’s tolerance and responsiveness to it have decreased due to the large mass of businesses that currently utilize this method. To combat the negative stigma it is vital to use extra thought, research, and care when matching customer profiles to product profiles. Most importantly, it is best to focus on business markets, meaning telemarking at places of work rather than at home.
According to Popupsmart, Inc., telemarketing has an average cost per lead of $198, as of 2020. But this can vary significantly from one industry to the next.
Types of Telemarketing:
- Cold-calling – calling for the first time without permission
- Warm-calling – cold call using ‘warm’ techniques by creating rapport or following up with a positive response
- Follow-ups – turning a lead into a prospect, reaching back out to a lapsed customer, thanking a customer for their support or possible satisfaction
- Fundraising calls – searching for charitable donations
- Market research – according to customer or demographic segments, usually research surveys
- Database clean up – calls for the purpose of updating customer records or establish if their is ongoing interest by the customer
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Email marketing includes e-newsletters, promotional emails, and ads in other businesses emails. It is also the cheapest form of direct marketing. Due to the fact that the average individual checks their email daily, it is a powerful marketing tool, but it is important to first acquire consent.
Email marketing has an average cost per lead of $53. If you’re interested in adding this tactic into your marketing list, definitely check out the blog posts in our “Email Marketing” category.
Text (SMS) Marketing
This form of marketing is said to be highly effective when attempting to reach large groups of potential customers at a low cost. We were not able to find an average cost per lead, for comparison though; so please keep that in mind.
Some examples of SMS marketing include sales alerts, links to website updates, appointment or delivery reminders, and personalized messaging. Due to the instantaneous nature of text messaging, SMS marketing is especially good for time-sensitive offers. Furthermore, most prospective customers constantly monitor their texts. As such, SMS is less likely to be ignored.
Leaflet Marketing Using Letterbox Drops and Handouts
Leaflet marketing is a less targeted or broader form of direct marketing that is best for local businesses whose products or services appeal to a wider audience. Distributors help local or area-focused businesses identify and distribute to chosen suburbs and postcard ranges. This works to take the footwork out of letterbox drops.
Social Media Marketing
The wonders of social media have come a long way and provide a great advantage as a direct marketing tool. It allows customers to share your content with their own personal network therefore greatly increasing the reach of your business. Also, it allows your business to build a profile therefore promoting your product or services while also encouraging feedback in the form of comments.
The average cost per lead for social media marketing is $58.
This type of direct marketing is best for growing a flexible, low-cost business. It involves an independent salesperson selling directly to customers. Unlike other forms of marketing usually carried out at retail outlets this type is generally used at homes, offices, and cafes. And while it does decrease on typical advertising costs, there is the cost of labor. You’ll want to keep that in mind. It is convenient, and if done well, it can convey a sense of personal attention for the customer or potential customers.
We were unable to find any actual data on the average cost per lead for direct selling. But, as with any form of marketing, it will vary from industry to industry. You may be able to get some information on what to expect with this form of marketing, after speaking with a marketing agency that specializes in this. And if they have experience with your industry, they may be able to share some case studies with you.
How is Direct Marketing Used?
When utilizing marketing of this type it is important to know not just what it is, but the nuances of how to use it. If you want the most out of your direct marketing campaign there are some strategic details that are vital to consider.
Targeting Your Customer or Potential Customer
A pitch delivered to the widest possible audience is about the least profitable technique or strategy a business can do. You may gain a few customers, but most will be annoyed. Your advertisement will be doomed to the junk or spam folder that no one looks at. Consequently, direct marketing is about not just reaching out to your customers directly, but being more narrow or selective in your advertising. At its best, it is the exact opposite of generalizing or mass advertisement. Therefore, when extending your reach as a business you want to make sure to extend it to the right people for max effectiveness. This is also known as targeting.
Creating lists of targeted prospects is one of the most effective tactics for direct marketing. For example, if you sell baby products, you might compile a list of contacts with a new baby. It is important to properly research and identify customers who are likely to need or want your product or service. Doing this greatly increases your response rate. Consequently, targeted personalized direct marketing campaigns achieve much better results. For example, if your business is a new ice cream shop it will be much more effective to send coupons to local homes with kids than the homes of single bachelors.
The oldest form of targeted direct marketing is catalogs, having their start in the latter half of the 19th century. However, in today’s current time their popularity has greatly decreased. Mostly only those who have shown interest in a previous purchase of a similar product receive them. Social media has grown to be the new mainstream form of direct marketing. This involves putting out advertisements for certain demographics. Some platforms, such as Facebook, allow brands to select the age, gender, and interests of their target audiences.
Maintaining Customer Records in Direct Marketing
Direct marketing, like most marketing, is all about the individual your attempting to sell to. This type of marketing is specifically at a smaller, more personal, scale. As a result, it is especially important to maintain reliable customer records. This will help you either maintain or re-establish relationships. This is done by utilizing your accurate customer records to rekindle and find out why some may have left in the first place.
Also, opt-in or permission marketing is a useful tool in the mission of maintaining proper customer records. This is simply exclusively sending mail or email to individuals who have agreed to receiving them from a business. This is a valuable list for a company as it indicates real interest from the customer. Consequently, by analyzing said list you’re able to further narrow the targeting parameters for your customer basis effectively achieving a higher response rate.
Increasing Customer Loyalty
In all forms of marketing, whether when building a website or creating a tv commercial, one of the most essential things to incorporate is a call to action. This is where you literally tell or ask your target audience to take an action. For example, giving a toll-free number to call or attaching a clickable link in a social media or email promotion isn’t the same thing as including a call to action. But, telling someone to actually “call” the number, or “click” the link, that would be a call to action. And speaking of which, check out our call to action below:
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When implementing direct marketing, it is most useful to personalize these promotions, letters, or offers. This increases engagement and therefore the likelihood of a response. Furthermore, it is extremely beneficial for a business to combine direct marketing and customer loyalty strategies. For example, you can maintain and build customer relationships by sending discount offers, invites to upcoming sales, and birthday cards.
Test or Measure Performance
Be sure to monitor and review your direct marketing activities. You’ll want to be aware of the results generated through your chosen strategies. Doing this, you can adjust your approach as needed and improve the results for future campaigns.
Example: You mail 100 potential customers a catalog containing a discount voucher for your service or product. Upon analysis, 20 of those customers make another purchase. As a result you have a response rate of about 20%. After this, you work out the cost of both creating and mailing the catalog. Then you factor in the profit made from each customer. The end result will be a rough estimate of the success of your campaign. Then, determine whether the return on investment is what you wanted and expected. If it isn’t, then consider how you might change you catalog to get better results. Or, if necessary, use a different form of direct marketing, rather than catalogues.
If, for example, you find that email marketing at the same cost get’s 40 extra purchases, and catalogues only had 20, then you may want to invest more in email marketing.
Direct Marketing: How Does It Apply To My Business?
Direct marketing provides a plethora of options and benefits. It is for these positive effects that it directly applies to any business that wishes for success.
Saving Money with Direct Marketing: For one, and as mentioned previously, it is astronomically cheaper. Marketing such as television advertisements or internet advertisement campaigns can run high. Consequently, direct marketing assists those looking to reach their customer basis but on a tighter budget.
Alternatives In Direct Marketing: Like any business, direct marketing is multi-faceted. Therefore, no matter what your business may be or what product or services it may be selling, direct marketing techniques can help. For example, if handing out flyers has little impact then it can be followed by an online promotion such as a free drink per new customer.
Profile and Sales in Direct Marketing: Direct marketing works to increase a company’s profile making it especially applicable to new companies looking to increase their awareness to the public. This can be done through its various strategies such as social media advertising on Facebook or Instagram. By increasing the profile of a company and its products or services sales by reflex increase as well.
Targeting Your Customer Base In Direct Marketing
Direct marketing doesn’t just involve directly advertising to your customers. It also includes being hyper-focused on what’s advertised to your target audience. This helps you, as a business, more effectively compile your customer base. Your contact list can then be far more valuable, as it is an active and accurate grouping of those who are more likely to want your products or services.
Designing said advertising in direct marketing campaigns to stand out, helps to increase customer engagement. Direct mail pieces, such as flyers with large unusual shapes, pop-ups, or 3D objects, act to this effect. By increasing engagement, you are likely to increase responses and therefore your companies’ sales as well.
The Importance of Customer Relations In Direct Marketing
Through direct marketing techniques, companies are able to establish a more intimate relationship with their customers and potential customers. This is vital for a business as it helps not only to establish those customers but sustain them as well. When this communication exists it is easier to rekindle sales and understand why customers may leave in the first place. Once again, this all works to increase your sales as a business.
Direct Response Marketing/Advertising
Direct response marketing or advertising is simply a method within direct marketing that calls for personalization. Meaning when utilizing certain techniques, such as mail, it is useful to make it more intimate by adding aspects such as the customer’s name. This makes the call to action that should be present more persuasive. Consequently, by making it more persuasive it is more likely to gain responses and therefore continues to increase sales.
Direct marketing is an extremely effective way of advertising your business and the products or services it offers. It is a straightforward and personal way of establishing a relationship with your target audience and influence sales; without the use of a third party retailer. It’s done through tactics such as direct mail, telemarketing, email, text messaging, leaflet marketing, social media and direct selling. Each varying tactic has its own advantages and can be more fitting depending on a business’s end goal.
What To Remember Regarding Direct Marketing
Aspects essential to direct marketing are targeting, personalization, and a call to action. Targeting is more conducive to a business’s time and money by increasing the effectiveness of the chosen direct marketing method. It increases the likelihood of a response by matching the profile of potential customers to the profile of a product or service. For example, it is much more effective to send coupons for diapers to families with new babies than wasting it on the homes of single bachelors.
Personalization makes an advertisement more alluring, and therefore, greatly increases the chance of a response. Call to actions work to the same effect by giving the customer a follow-up action, indicating their interest. They can also give a customer the opportunity to continue to explore the product or service being offered. Both actions work to further increase the sales in your business.
No matter what technique is chosen, direct marketing campaigns have a plethora of benefits for all businesses that choose to use them. It is typcially a more strategic use of both a company’s time and money. However, each tactic does have its own nuances and factors to be wary of, such as strict privacy regulations. However, as long as one remains knowledgeable and in compliance of such rules, direct marketing should give you a highly effective return on investment.
Aside from direct marketing, there are other forms of marketing that make sense for some businesses. In the next week or two, we will be publishing a blog post on delayed response marketing. This is also referred to as brand awareness marketing. Be sure to check out that blog post to understand other ways to promote your business.
And of course, if you need assistance with your digital marketing, let us know! You can connect with us via our contact page or through the contact form below.
Joshua Lyons Marketing, LLC was established in 2015. Since that time we have provided digital marketing services to business and professionals. We help our clients increase their online exposure as a means to increase sales and revenue. Our core services include search engine optimization (SEO), website development and content creation. We also provide other online marketing services, such as email marketing, marketing consultations and various types of advertising. Our team is based in the Milton, Pace and Pensacola, Florida area. However, we work with clients throughout the United States. Read More