What is Direct Marketing?
Direct marketing provides businesses with an opportunity to engage and build loyalty from their end customers and keep unncessary communication/distribution costs to a minimum. This in turn (if done well) can help to increase sales, net contribution and ultimately overall business profits.
As everything in direct marketing is or should be measurable, the overall objectives can be achieved by focusing on relationships with various types of customer segments. These generally fall into the the following broad categories:
- acquiring a set number of new customers or prospects
- converting prospects to customers
- up-selling or cross-selling existing customers
- reactivating lapsed customers
What types of businesses can benefit from direct marketing?
Direct marketing can benefit any business that has or is interested in forming a direct relationship with the purchasing decision maker or influencer. It doesn’t matter if your business is big or small, if you offer a product or a service, if your business is within a particular industry segment or if your purchasing decision maker or influencer is a consumer or another business. The techniques and principles that contribute to effective direct marketing are the same regardless of all these factors.
The most important thing, is that your business adopts the ‘customer is king’ mantra, and works to anticipate and fulfill the needs of different segments as much as possible. This is likely to require managment and marketers who can put themselves in the headspace of the customers they are targeting to really understand what they’re looking for. It will also require having great processes and systems in place to capture and effectively use the data captured, so that customers establish a favourable relationship with your business.
Direct marketing campaigns
Direct marketing campaigns consist of the following parts, which are listed in order of priority.
- Audience segments and the communication channels used to reach them
- Offer design and offer mechanics
- Creative execution
If you have a really great offer combined with award winning creative but it is sent to the wrong target audience then your campaign is doomed from the start. To get these parts right, you need to know your customers and understand what motivates them to act.
Direct marketing techniques that can help
To know your customer you need to conduct scientific testing of various list, offer and creative combinations to really understand what motivates each audience segment to start and to continue to do business with you. Testing is one of the most important techniques of direct marketing. Tests are designed to prove or disprove particular hypotheses and can help you to really understand what works and what doesn’t. This in turn can improve both the effectiveness and cost-efficiency of your marketing activity and add long term value to your business.
It’s important that you set your financial forecasts upfront so that you have a record of what you thought would happen and can then easily compare these assumptions with what actually happened. This process also helps to create a logical argument that can be used to drive change within your business. With continuous forecasting and campaign post-analysis you will find that your forecasting gets a lot more accurate over time.
Direct marketing is most useful when businesses commit to tracking actual activity by segment as it happens, usually by having a unique identifying code of some sort. If results aren’t tracked and analysed there’s nothing preventing yourself and others from making the same mistakes over and over. Before you embark on any scientific testing, it’s advisable to be prepared to be surprised and to only test things that you’re happy to change.
Benefits of Direct Marketing
Rigorously applying direct marketing principles and techniques are likely to benefit you by helping you to gain deeper insights as to what’s working and what’s not and where the best new opportunities are. These valuable insights will almost certainly help to reduce the guesswork going forward and consequently help to reduce the amount of your advertising dollars that are wasted, therefore increasing overall campaign net contribution and business profits.
Other Rocket Science Articles:
-->