Direct Marketing: What it is, types and operations
The set of marketing tools and advertising techniques with which companies communicate to their customers directly and without intermediaries, for the sole purpose of hitting a specific target in the best possible way, receiving quantifiable, qualifiable, measurable, and objective answers is one of the more complete definitions to better describe direct marketing.
What are these marketing tools and advertising techniques employed by companies?
There are so many:
- Telemarketing: the telephone plays a fundamental role. Through a telephone conversation, the company on duty tries to sell its products/services to potential customers. Collecting subjective information through surveys is a variant of this initiative.
- Direct sales: the sales agent acts as a link between the company and the customer. The face-to-face interview is crucial.
- Direct Mail: promotional material is sent to a well-targeted target by post, fax, as well as e-mail, and SMS.
- Email Marketing (commercial communications via e-mail): the customer receives e-mails or messages via the newsletter to which he has subscribed. The contents are of a promotional nature and within them, they almost always present the classic call to action.
- Mobile Marketing (commercial communications via SMS): to manage the relationship with the consumer, SMS is one of the most popular forms of communication, also because it is less invasive than the classic call.
- TV commercials and teleshopping carried out on interactive TV: the primary feature is to invite the viewer to act on TV to obtain a direct response.
- Social media marketing: any form of structured advertising communication on social networks is nowadays a direct approach to the consumer. People post fascinating pictures taken by professionals like Jesse Taylor Photography and get more exposure that helps to grow their online business. Upstream of the advertisements that are seen on Facebook (through Facebook Ads) and Google (through Google Adwords) there is a truly remarkable analysis of customer variables.
Over the years, the definition of the term has evolved, because if at the beginning it was only a strategy with which companies intended to place products and services directly from the producer to the consumer by exploiting a more or less dense network of agents, the spread of the telephone, SMS and e-mails allowed the development of a measurable response.
Who Invented Direct Marketing? When does the birth of direct marketing take place?
There is no precise inventor of direct marketing, but a more or less defined period of time where direct marketing took hold. It was the 70s and the company began to change due to the economic boom. Many managers of large companies began to understand that segmenting a market and targeting a specific target were fundamental actions to speed up the approach to the customer and to avoid wasting money.
Placing the product from the company to the customer, bypassing the distribution step, in many cases brought different advantages, starting with cost containment. We must not forget that in the 1970s the IT revolution began to take its first steps: the constant use of the PC, the spread of advertising inserts for the establishment of address-lists, the marketing of telephone lists, and the strong use of the telephone the basis for completing the process that developed only in the 1990s, when all the main sectors, from cars to insurance policies, without forgetting the banks, were effectively invested.
What is direct marketing for?
The primary purpose of direct marketing revolves around the ability to weave a direct relationship due to the absence of intermediaries and lasting between the company and its target: concerning the specific needs of individual customers and, depending on the phase of the cycle. in which they are located, the messages addressed to them are adapted and personalized.
To be precise, direct marketing serves to acquire, consolidate and retain customers, as well as to recover them, in the event of a possible abandonment, that is, if they turned to other competing companies for the purchase of products or services.
Direct marketing operation
Let’s see in detail the aforementioned four phases: acquisition, development, retention and customer recovery.
- Customer acquisition: how is it done? By contacting prospects, i.e. potentially interesting customers, whose contacts (home address, telephone number, e-mail) are present in profiled lists, put on the market by list brokers. In the face of important amounts of data, the customer database is used, a real archive containing customer data, of fundamental importance in building and enriching the relationship between buyers and companies.
- Development: in this phase, the company aims to be considered special in the eyes of the customer, by presenting convenient business proposals. A tribute to the first purchase, coupons, giving advice, making them feel special, educating them to become customers is the basic mission of this second phase.
- Loyalty: these are all those marketing and sales strategies, aimed at containing the process of losing customers.
The phrase << keep your customers good >> is the one that best describes this third phase. Loyalty starts from the first contact between the company and customers and continues for the entire duration of the relationship. Many businesses nowadays invest a portion of their budget in the process of acquiring new customers, as they consider the aforementioned method to be the simplest method to drive sales and increase turnover, but in reality, opt for a reverse strategy, focused on loyalty. of customers you already have, leads to an increase in revenues not only faster but also higher.
The reason? If you need to establish a relationship of trust with new or occasional customers and convert them into more or less stable customers, no time is wasted with those who have already purchased several times from the company. Research from Harvard Business School shows that a 5% increase in customer retention rate results in a 25% to 95% increase in revenue. Selling to your customers is easier because there is a probability of repurchase ranging from 60% to 70% if they were satisfied.
The conversion of a new contact into a customer has on average lower chances of success: from 5% to 20%. Issues relating to an increasingly competitive market. Social networks are nowadays a tool in some respects synonymous with loyalty: how many businesses post photos of customers who have just purchased their products on the official Facebook page, as if to thank them. In this way, customers feel important, because they fulfill the role of ambassador.
- Recovery: if customers decide to move to other brands so that the company does not lose them as customers, it must do everything to recover them. Measuring the readiness to repurchase through questions and surveys that indicate the degree of customer satisfaction, measuring the intention to report the company to friends, relatives, and colleagues, sending email reminders with a text like << today, taken for granted for you >> are examples of this strategy.
Difference between direct marketing and indirect marketing
What is the basic difference between direct marketing and indirect marketing? In the first case, there are no intermediaries between the seller and the consumer.
Direct marketing proves to be a tool with infinite potential in terms of creating a community, where a strong sense of belonging is the basic element, created precisely through the sharing of information. Being therefore direct response, direct marketing focuses not on the product, but the customer.
Following the segmentation, aimed at finding customers who can bring value to the company, the direct marketing activities presented above aim to build relationships with customers, identifying those who will respond more likely than others. They will be presented with various offers. The final campaign will in fact have a high level of personalization because the contents of the messages will be different depending on the customer.
Successful direct marketing campaigns
Among the most interesting direct marketing campaigns, it is worth mentioning that of Rothmans, a cigarette house that revolutionized the traditional market, still anchored in the development of the brand.
Rothmans agents and promoters in the past encouraged cigarette smokers to try theirs. How? By handing out free samples off the premises. Following the release of the data, they were entered into the database.
And from there all those relationship marketing strategies were implemented, from the exclusive possibility of being part of a Rothmans Club with the incentive of earning prizes of the caliber of televisions and T-shirts, to reward them for their loyalty.