Focus -Do you know your customer. Customer intimacy implies that you really know your customers and
are able to anticipate their needs.
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Target -Getting to know your customers. Flex your database to deliver targeted promotions and, as a result,
gain invaluable marketing insights.
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Communicate -The value of deepening existing relationships. The cost of acquiring a new customer is often two to three times the
cost of enhancing an existing relationship with a satisfied customer. |
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Direct Marketing- An Overview
What is Direct Marketing? – Start here to understand this unique marketing tool.
As with terms 'marketing' and 'advertising', countless attempts were made to explain 'direct marketing'. We will avoid adding another definition; rather, we will try to emphasise the aspects that most definitions are also highlighting.
- Direct marketing is a system of marketing methods that builds and maintains a direct, one-to-one relationship between a company and its customers.
- Direct marketing is database driven; databases give you knowledge about your current and potential customers allowing you to customise your approach to customers.
- All customers are not created equal. 80 percent of repeated business will come from 20 percent of your customer base - give or take a few percentage points. That is why many sales-oriented companies invest more in relationships with these "vital few" that generate the companies' profits.
- Direct marketing produces a measurable response making it easy for you to identify consumers and evaluate what works and what doesn't.
- Direct marketing is an advertising technique that lets you build and maintain close relationships with your customers without necessarily meeting them personally during each contact. The advertising message - in the form of letters, brochures, catalogues, coupons, audio or videotapes, samples of the product, virtually any format - is communicated to each potential or current customer.
What makes Direct Marketing such an attractive option?
By using direct marketing, you can:
- Talk to the people you are interested in - targeting is easier; advertising messages can be sent to the exact people that you believe are interested in a particular product or service.
- Make it personal - direct marketing is personalised and talks to YOU about things YOU want and solutions to YOUR problems - and that's why consumers will agree to devote more time and attention to personalised advertising.
- Take more time and emphasise details - you can "buy" each prospect's attention by being personal, you have a better opportunity to explain the unique benefits of the product.
- Measure the effect - you can ask consumers to identify themselves when performing a specific action, gaining a consumer profile. For instance, consumers may be asked to use coupons from a mailing package to receive discounts or free products or send a reply card with a request of further information or use thier loyalty card with purchase to gain loyalty benefits.
- Avoid negative emotions - direct marketing does not interrupt the prospects favourite movie on TV; consumers can read, view or even taste your advertising message at their own convenience.
What is a Database?
A database is one of your most powerful tools and is certainly the cornerstone of direct marketing. Databases in a marketing context are systems for gathering and maintaining useful information about current and potential customers. Two most important functions of databases are :
- Databases show who is buying from you. By gathering data about current customers, you can gain a perfect understanding of your customers' profiles, their needs and wants. This enables a you to increase sales per customer by cross-selling other products or services as well as attracting other customers with similar profiles.
- Databases let you access the target audiences that you need. By using available databases, you can select the customer segments you are interested in. These audiences can be targeted directly with a customised approach.
The potential of databases has increased dramatically with technology - new technologies have emerged that allow companies to build and maintain databases with millions of records whilst the cost of gathering and processing information is gradually decreasing.
Which database is best?
To be useful in direct marketing, the database should describe the customers. Besides the usual name-address-phone, many other criteria are vital. For instance, industry, number of employees, names of key executives and turnover are important aspects of a database. When targeting individual customers, information on age, gender, family status and size, profession and income will help with the right selection. Databases of your own customers, both businesses and individuals, have to reflect length and type of relationship, how much and how often they are buying.
Secondly, the database has to be current - records have to be updated on regular basis.
What sort of costs are involved?
The cost of any direct marketing campaign will vary from project to project. However a basic direct marketing campaign may include an outer envelope, a personalised A4 letter and a brochure or newsletter. For a cost indication, go to our Auto-Estimator for an on-the-spot budget estimation.
OK Where to from here?
How do you go about preparing for a direct marketing campaign? There are some things that need to be planned and considered from the outset. To help you prepare, use our Create a Campaign Checklist, which will walk you through your campaign so that you get a clear picture of what you are trying to achieve.
The potential of direct marketing as an advertising technique is enormous; but so is the chance of failure, if campaign planning and execution are not done with assistance from experts. If you have any further questions, expert advice is just a phone call or e-mail away from iGoDirect - the ultimate direct marketing resource centre.
