This edition we tackle one of the most controversial methods of the marketing mix – direct marketing.
Direct marketing is a form of advertising that requires a direct response from the consumer. This includes mail, catalogues, advertising, telemarketing, direct selling and email initiatives that are delivered directly to the individual.
Despite having a reputation as marketing’s poor cousin, the direct marketing industry is growing. According to the Commercial Economic Advisory Service of Australia, direct marketing is a $16 billion industry representing more than 50 percent of all media spend, and it is growing at a rate of 17 percent per year.
THE DIRECT ADVANTAGES
Direct marketing is a targeted, in-depth and action-oriented method of marketing. In recent times, it’s become more sophisticated, with additional channels such as the internet and mobile phones offering innovative ways of reaching consumers.
There are many advantages to the use of direct marketing including:
- selectivity of audience using databases
- frequency potential
- evolutionary designs
- personalisation of message
- economy of scale
- control of messages and design
- ability to measure ROI
DATABASES ARE KEY
Advances in data management and customer targeting have improved the effectiveness of direct marketing. Databases allow marketers to analyse and segment consumer groups, which can help to stimulate repeat purchases, cross-sell other products and enhance customer relationship management.
While lists are available to purchase, think about whether you can set up your own database to collect information about current and potential customers.
If you’re in B2C, collect information about the customer’s age, income, gender, martial status, interests, etc. In B2B, your database should include information about the size of the business, number of employees, annual sales/revenue, decision makers, industrial classification, etc. Always be aware of privacy laws when collecting and using this information, and give consumers the opportunity to “opt out” of materials they don’t want to receive.
THE DIRECT DOWNFALL
As with most forms of advertising, direct marketing is becoming saturated in the marketplace and competition for the consumer’s attention is increasing. Unfortunately, many marketers have responded to this issue by creating more marketing campaigns, and therefore increasing the clutter in the marketplace.
Some of the other disadvantages of direct marketing include:
- rising costs of implementation
- difficultly engaging consumers
- customers often don’t have the opportunity to inspect the goods
- negative image of some direct marketing techniques
STOP CALLING ME!
The most controversial direct marketing method is telemarketing. In Australia, the federal government plans to introduce a national Do Not Call register in 2007. This initiative will have a significant impact on marketers and will establish a minimum set of standards for the industry covering matters such as calling hours, information requirements and termination of calls. Interestingly, the government expects one million registrations in the first week of the register’s operation and four million after its first year.
DIRECT MARKETING IN ACTION
Charity organisations often use direct marketing to increase donations from supporters. One of my personal favourites is a campaign by the Royal Blind Society that used an innovative outer envelope with a lens to illustrate how the world appears to people with blurred vision. Inside a letter and colour brochure reinforced the message that more donations were needed to help thousands of people with impaired vision. This powerful campaign reportedly returned $15 for every $1 spent.
We should no longer view direct marketing as marketing’s poor cousin. It’s the perfect tool for communicating a relevant message to a select audience, it can be cost effective and it can help your message to stand out from the crowd.
For more information visit the Australian Direct Marketing Association at www.adma.com.au.
Renee Hancock is a marketing and communications specialist, whose experience spans finance, government, education, not-for-profit, telecommunications and law. She has consulted for two of Australia’s most prestigious public relations agencies and now works in-house for a leading financial services organisation.