Direct marketing is reaching and delivering goods and services to customers through customer-direct channels (without using middlemen). Various communication channels used by marketers in direct marketing to reach customers are direct mail, telemarketing, interactive Tv, websites, mobile devices, catalog marketing, and kiosks. Direct Marketing is an important marketing communication mix tool. It is a fast growing method of servicing customers. Sales volume has been growing rapidly with the help of these direct marketing channels.
Direct Marketing Channels
Direct Mail: In Direct -mail marketing offers, reminders, announcements, or others goods are sent to an individual user. Selective mailing lists are used by marketers to send letters, flyers and other mail pieces directly to customers. It is a very popular channel of direct marketing as it is flexible, can be personalized and also it helps in early testing and measuring results. The cost of direct mail marketing per thousand customers is higher as compared to mass media but the customers targeted through this channel is are much better. In forming a direct mail campaign, marketers have to choose their objectives, elements to offer, means of testing, target market and customers, and measures of success. In the following section, these all points are explained
- Objectives: Direct mail marketing objectives can be, informing and educating users, reminding customers of the offers that the company is providing, building strong customer relationships, and reinforcing users’ purchasing decisions. The success of the campaign is judged by the response rate. A response rate of 2-4% is considered to be good.
- Offer Elements: It includes the product that is offered, the offer on the product, the medium used, creative strategy, and the method of distribution. These all elements can be tested easily. Marketers in direct marketing also have to choose mailing components, that includes, sales letter, envelope for sending mail pieces, reply form, and reply envelope.
- Target markets and customers: Marketers use the RFM (recency, frequency, monetary amount) formula to select users. Recency means, how much time has passed since customers last purchased goods, frequency means, how many times users have purchased, monetary amount means, how much the users have spent since becoming a customer. For example, a company may make an offer to the customers who have purchased in last 30-50 days, who purchased 3-4 times and spent at least Rs. 300 since becoming a customer. Customers are given points based on varying RFM levels, the more the RFM score the more attractive a user is. Marketers also select customers on the basis of age, income, gender, education, lifestyle, and previous mail purchase orders.
- Testing Elements: Different elements of an offer such as products, envelope, mailing lists, product features etc can be tested easily.
- Measuring Campaign Success: The marketer in direct marketing can find out the break even response rate by summing up all the campaign costs. Campaign’s long run profitability can be judged by factoring customer’s lifetime value.
Catalog Marketing: In this direct marketing, marketers send various catalogs that include business catalogs, merchandise catalog etc in printed, DVDs, or online form. E-Catalogs are also gaining popularity and are showing positive signs of growth. There are many websites that are dealing in e-commerce by publishing e-catalogs. For example, futurebazar.com provides e-catalogs on its website, with photographs, lists, and prices of all the available products. The success of catalog marketing depends on managing customers list by avoiding duplication. Providing online catalog provides marketers of direct marketing with easy access to global customers.
Telemarketing: This marketing uses telephone and call centers to find new customers, providing services to existing customers by answering their queries through telephones. It helps marketers in reducing costs, increasing revenue and customers’ satisfaction. Marketers of direct marketing use call centers for inbound and outbound telemarketing. Inbound telemarketing means receiving calls from customers and outbound telemarketing means initiating calls to new and existing customers. It is used both business and consumer markets.
Some other media used for Direct Marketing
All the major media available in the market are used by the marketers while doing direct marketing. Various following examples illustrate this
- Advertisements of books, appliances, clothing etc in the magazines and newspapers which customers can order via toll-free numbers.
- Advertisements in radio present twenty hours a day offer for customers.
- Few companies nowadays make infomercials of 30 minutes to 60 minutes duration combining the sale of Tv commercials with the draw of entertainment and information. Infomercials are used to promote complicated and technologically advanced products or goods that require a great deal of explanation to customers.
- At-home shopping channels provide goods/ services within the time span of 48 hours through the web or toll-free number.
- Telebrands India demonstrates products’ features, advantages, and use by promoting the concept of home shopping with the help of media and television advertisements. Customers are shown a toll-free number on their television sets when advertisements are shown to them, they can call on that number and place an order for demonstration and delivery of the product.
- Asian Sky shop regularly showcases its products through 60 minutes to 90 minutes commercials on Tv channels.
Benefits of Direct Marketing
Nowadays customers are working class so they do not have time to visit stores for shopping and moreover they are tired of the parking traffic headaches. So they appreciate the following benefits of Direct Marketing:
- Toll-free phone numbers
- 24*7 accessible websites
- One day delivery
- Commitment of direct marketers towards customers service
Direct marketers are benefitted in the following ways with direct marketing
- They can easily buy mailing lists of customers’ names and address of any group of their interest
- Direct marketers can test various media and messages and then find out which one is the most cost effective
- Direct marketing strategies of one marketer is not visible to the other
- They can measure which campaign was most profitable