What Is Direct Marketing and Direct Mail?

Direct marketing is good only for mass marketers and mail-order firms.

Sales and marketing executives, influenced by the number of mailings they see for magazine subscriptions and mail-order firms, may conclude that direct marketing is unsuited for their business. Mail order is only one purpose for direct marketing and rarely sells anything through the mail, is not appropriate for big-ticket items.

Although it’s a challenge to sell an expensive item strictly by mail order, direct marketing can play an important part in generating leads and in supporting the efforts of salespeople, has been used to help sell diamond jewellery, sports car, expensive travel, real estate, yachts, antiques and collectibles, mutual funds, and just about every other product you can think of.

Direct marketing is accountable. It’s advertising you can justify and track. It’s ideally suited for small business, it can be adopted to fit your budget and your changing business goals. Originally direct marketing referred to a direct sale, as in mail order, but today it’s used to accomplish many marketing goals. Direct mail and direct marketing are sometimes mistakenly used interchangeably, may take many forms and use most media; it is not limited to the mail although mail is the most popular medium, gives you many options beyond sending self-contained mailers, and it includes most, if not all, advertising media.

-Magazine and newspapers
-Telemarketing
-Free standing inserts

Direct marketing focuses on providing benefits for buyers, and the chapters on constructing creative mailers and campaigns focus on the power of benefits.

If you don’t already think about your marketing in terms of benefits, now is a good time to start. Direct mail is like no other form of advertising in that you control the medium and the message. When you buy an ad in a magazine or newspaper or a commercial on the radio, you’re buying only a portion of the medium. With direct mail your message is alone. You control everything, from the size, texture, and colour of the paper you use to the number of pages and the way you address your potential clients or customers. In addition to controlling your message, you control who receives it and when. You can send one message to your existing customers and another to potential ones, or in the case of business mailings, to people in a specific industry or profession.

Direct marketing is the most testable form of advertising. Every mailing and every direct response advertisement you run is an opportunity for you to test something and gain information that can help improve your marketing in the future.

To be effective in direct mail, it’s not necessary to mail to every breathing human being, just to those people who are your most likely customers or who are already your customers. Start thinking in terms of precise targeting

Direct Marketing Essentials – Buying and Negotiating Media

Every business has a vast array of media options available, which includes both Traditional Media such as TV, magazines, radio and magazines and New Media which includes the internet, emails, search engine marketing, viral campaigns and link building strategies.

But no matter what product or service you offer, you must do a decent amount of research to determine how best to spend your advertising budget. This includes researching the target market and understanding what type of medium will work best to reach the largest amount of customers using the most effective method.

But as this blog is part of a direct marketing series, I am only going to concentrate on effective media buying from the most popular direct marketing channels which tend to fall under the ‘traditional media’ umbrella. But due to the importance of the internet marketing nowadays, I’ll have to dedicate a separate blog to this essential marketing medium down the track.

Direct Mail

I would have to say that direct mail is the most important DM medium. The reason why it’s so good, is that unlike other forms of marketing channels, you don’t have another medium carrying your message for you. With direct mail, you have total control over the branding and communication of your message.

Direct Mail is the perfect blend of both advertising and sales. It allows you to present your product and service in a non-competing landscape, communicate directly with your target market while making an attractive offer, which helps to close the sale, all in one convenient envelope or package.

The key aspects to remember before you spend too much on your direct mail campaign are as follows:

  1. Match your existing customer profile as closely as possible before you rent a list. These include psychometric, geographic and demographic factors. If you don’t have any customers, then you need to undertake some basic marketing research.
  2. Always rent your marketing lists before purchasing them outright. This allows you to test and measure the effectiveness of the list before roll-out. There is also no harm in asking for a discount when trialling a list. Many list rental companies may even waiver the set-up fee as a once-off.
  3. Make sure you only select the most important criteria for testing the campaign. Don’t just test for the sake of testing, but look at key factors which provide the most effective means of getting a sale from your target market.

Magazines and Newspapers

Here are some general guidelines for choosing and buying the right magazine for your business:

  1. Overall, I believe that frequency is a key driver in generating direct sales. Expect a good discount if you ran multiple ads in a publication.For newspapers, you need to consider the ad size and section of the newspaper. For example, an obvious choice of a travel product would be to go into the travel section. Although I have had previous success advertising a travel product in the business section of The Age, as there is no other competition to consider in this space.
  2. You should test to establish the best publication. A scenario has been outlined for a Travel Insurance product in the attached spreadsheet so you can follow the calculations used to ascertain how much profit you can obtain from a publication: Measuring the Profit Index. You can even use this as a negotiating tool when buying advertising space in similar publications based on past results.
  3. Measure the success by the response generated from the magazine circulation, not by the people reached. I feel that a publications reach can be somewhat over inflated, but circulation is exact.
  4. Competitors who consistently appear in the same publications give a good indication that the publication is working for them. You can learn from your competitor’s experience.
  5. Think about getting some bonus space to run a phone number or call to action message within the same publication to help lift response rates.
  6. Consider audience lifestyle and the reading habits. For example, you don’t want to put a coupon into a magazine that people are going to keep – it just ruins it!

Inserts vs On-page Advertising

Once you’ve chosen the media, this opens up the door for you to consider the different executions for your product or service. It would be worth your while to test stitched inserts vs loose inserts vs on-page advertising. Just remember the following key points beforehand:

  1. Inserts are intrusive. You have to be fairly tactile and you would expect the reader to do something with them. i.e. coupons are generally used on inserts.
  2. Loose inserts automatically fall out of magazines and can get thrown straight into the bin. But magazines automatically fall open at stitched inserts. So you have to make it stand out!
  3. Inserts are more expensive, but they generally convert better than on-page advertising. This is because the pass-on value is higher, plus people can hold onto an insert longer than the publication.
  4. For on-page advertising, you may wish to test right vs left page, or multiple vs single page advertising. It is important to measure the cost per call, and the cost per sale to help improve advertising efficiencies.

Television

Television can definitely work for direct response marketing. Here are a few tips to get you started:

  1. The key point is to be flexible with placement and to have the opportunity to test at different times.
  2. Prime time viewing is great for branding and awareness and off-peak is better for direct response. Although if you can negotiate off-peak rates for prime time then I’d definitely test it.
  3. Often fringe spots pull in a greater response than prime time, as consumers are generally engrossed in a high rating program.
  4. Sometimes you will be able to negotiate your TV advertising on a per inquiry basis. This means that you only pay on a response basis.
  5. By introducing top and tail commercial breaks. This means you run an awareness ad at the beginning of the break followed by a response generator towards the end of the end of the same break.
  6. TV advertorials are considered an inexpensive way to provide a detailed message with call to action.
  7. A well known personality endorsing your product or service will add credibility, as long as your personality is relevant to the product/service you’re trying to sell.

Household Drops

Many small businesses still include household mailbox drops as part of their overall marketing activity. Unfortunately you can’t judge how many people are going to put stuff in the mailbox on a day-to-day basis, which makes it very difficult to plan effectively. But here are a few tips to consider before you head down this path:

  1. Planning your distribution is essential. Generally household drops result in lower response rates, which is why targeting the correct audience is absolutely imperative.
  2. Don’t let your branding slide with this medium. Ensure your brand image is maintained and your product/service is positioned correctly.
  3. You could even use radio or press as pointers to alert your target audience to the household drop to help boost response.

Leveraging the Media

Now that you have an idea of some of the planning considerations and what type of deals you could negotiate for traditional media, I’d like to wrap up with some over-arching guidelines on how to leverage all media from the outset.

Knowledge is Power: Your buying power and negotiating skills will increase once you start testing the market and dealing with account managers. You know what works for your business. The media doesn’t! So ensure you are hard-nosed when negotiating with all media. If you have trouble negotiating, then here are some pointers to get you started:

  1. What we’re doing is working already, why should I go with you?
  2. We’ll test for free. If it works then we’ll commit to a longer term campaign.
  3. Advise the media that you have ‘distress’ funds available for testing.
  4. Try to secure a royalty deal and only pay for the number of inquiries.
  5. Get the media competing with each other for the best deal, while keeping the majority of your budget fluid all year.

Contingency Planning For All Events

Every small business marketing campaign should have a back-up plan for when the unexpected arises out of nowhere. If, for example, Australia Post decides to go on strike for three months, then you may have to utilise telemarketing to help achieve your sales targets. In turn, you will have to revise your marketing budget and revenue forecasts to cater for the additional expense of telemarketing.

Planning also involves considerations when response rates exceed your expectations. This can be overcome if you incorporate some of the following practices:

  1. Be flexible with your media buying. Buy on a short-term basis and increase media frequency if the ROI is good.
  2. Make your campaign time limited.
  3. Set limits for your customers. E.g. Offer limited to the first 200 callers.
  4. Keep your database clean and up-to-date and avoid costly dead mail. Your database should be no more than 6 months old.
  5. Plan your budget to increase activity if required. Sometimes it’s better to get extra brochures printed in the event your direct mail campaign takes off!

Consumer Direct Marketing

Consumer Direct Marketing is the form of marketing in which the consumer is the direct target of the communications related with products and services. In this age of Information explosion there are various channels for advertising directly with the consumers and this is the prime reason for increasing popularity. Cell Phone Text messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising are some of the main mediums of Consumer Direct Marketing. Marketing messages emphasize a focus on the customer, data, and accountability.

Characteristics which distinguish Consumer Direct Marketing are:

1. Messages that are addressed directly to the customer and/or customers. This relies on being able to address the members of a target market. Address ability comes in a variety of forms including email addresses, mobile phone numbers, Web browser cookies, fax numbers and postal addresses.

2. Seeks to drive a specific “call to action.” For example, an advertisement may ask the prospect to call a free phone number or click on a link to a website.

3. Emphasizes trackable, measurable responses from customers – regardless of medium. Direct Marketing Channels:

A. Email Marketing:This is the most common and reliable medium of Direct Marketing.

B. Online Tools:This channels targets people who are using internet very frequently

C. Mobile phones:SMS and MMS are main mediums of marketing by mobile phones.

D. Telemarketing:Contacting customers by directly on mobile phone is also very common tool.

E. Coupons: Coupons are used in print and digital media to elicit a response from the reader. An example is a coupon which the reader receives through the mail and takes to a store’s check-out counter to receive a discount.

The main advantage of marketing is that marketers can know the results of their marketing since he receives the response directly from the consumers. In traditional advertisement such measurement is impossible. Measurement of results is a fundamental element in successful marketing. The Internet has made it easier for marketing managers to measure the results of a campaign. This is often achieved by using a specific website landing page directly relating to the promotional material. A call to action will ask the customer to visit the landing page, and the effectiveness of the campaign can be measured by taking the number of promotional messages distributed (e.g., 1,000) and dividing it by the number of responses (people visiting the unique website page). Another way to measure the results is to compare the projected sales or generated leads for a given term with the actual sales or leads after a direct advertising campaign.

Three Easy Ways to Track Response Rates in Direct Marketing Campaigns

Many entrepreneurs and small business owners launch direct marketing campaigns through email marketing, direct mail or other methods, then forget the most important aspect of a direct marketing campaign: tracking the results. One of the advantages of direct marketing is that is trackable and measurable. You can tell, for example, how much every dollar spent on direct marketing made back in sales. But you won’t be able to analyze your data if you fail to collect it.

You can test many aspects of a direct marketing campaign from the creative presentation to the offer. Each yields different insights that add valuable data to the marketing manager or business owner’s understanding of what drives sales. Tracking elements that you are testing in a direct marketing campaign offers the critical data points necessary for good decision-making about marketing campaigns.

Depending upon your campaign, the media, and the budget, there are many ways you can track responses to each direct marketing promotion. The following three methods are the lowest cost methods to track results from campaigns online or offline. Be sure to track only one element you’re testing at a time, or else you won’t be able to tell which element boosted the response rate.

Unique Campaign Response URL

URLs are so inexpensive these days, and it’s so easy to create a landing page for a campaign that using a unique URL to track different lists or tests within an online or direct mailing effort makes sense. You can place the unique tracking URL on direct mail pieces or include links in email campaigns. Choose URLs that are directly related to the campaign name, theme or the product or company name. Keep them short and easy to type if you are including them on direct mail pieces. Make sure that the landing pages are identical; if you include different text or graphics on the landing page, you are mixing too many elements into the test matrix.

Different Response Phone Numbers

A unique toll free number, phone number, or phone extension can also track responses in a direct marketing campaign, especially direct mail campaigns. Many companies use this method to track responses by promotional channel. Another variation on this theme is to list different “staff” in the marketing piece. Jane’s name may be on piece one, while Ann’s name on piece two. If the call center or operator is given a list of names, and knows to tick off the number of calls next to the names, you can get a good idea of the responsiveness of a promotion by tallying how many times Jane or Ann was requested.

Special Response Codes

You may be familiar with the codes on the back of catalogs in the colored boxes. These correspond to various tests or factors the catalog marketer wishes to track. Special codes may also be included on order forms to track responses. Sometimes customers find typing response codes into online forms onerous. Try rewarding customers who include their response codes with a free gift with purchase or another bonus to encourage them to reveal their response or source codes.

Testing Concepts

These three methods of tracking results from direct marketing campaigns work well with many types of tests. Whether you’re conducting a split test or a test with many variables, be sure to use tracking methods such as a unique landing page and URL, unique phone number or source codes so that you can analyze the response data later and make informed decisions about your marketing methods.