Direct Marketing

Direct Marketing 101, page 1/3
Steve Lember, SCORE 513 Counselor
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This brief will, hopefully, serve to introduce you to some of the basic concepts of direct marketing. Keep in mind this is an overview. I will not get into the details of testing and sample size or database management or production and mailing techniques. If you feel that direct marketing can help you as a distribution channel or promotion tool you will find some suggestions at the end of the article to help you learn more. 

What, exactly, is direct marketing?

You can think about direct marketing as one-to-one selling. A salesperson talking to a prospect can be considered “direct” marketing. However, for our purposes we are talking about direct mail, telemarketing, e-marketing, etc. Think of it as a tool for generating an immediate measurable action. That action could be:

  • The sale of a product or service;
  • Generating a lead (hopefully, a well qualified lead);
  • Extending relationships with exiting customers by having them buy more stuff; or,
  • Retain them (for example, a subscription or insurance coverage).

All of us have been the subjects of direct marketing programs. While they sometime appear to be annoying, they are also very cost-effective for the businesses utilizing these tools correctly.

The primary laws of successful direct marketing.

1. Accurately define your market.

Who is the best customer for your product of service? You can have the greatest product and offer (more on offers next) combined with the most attractive presentation (sparkling copy and a beautifully designed package) but present it to the wrong market and it will fall flat on its face. Or, you present it an audience that is so broad that only a small percentage is actually a prospect for your offer.

Sometimes you cannot find lists that exactly match your market but you know that a % of the list will include potential customers. Then use very inexpensive direct marketing tools to find prospects with the highest likelihood to become a customer. For example, a real estate agent may not know which property owners in a given area are likely to consider selling their homes. By mailing a simple postcard or calling every homeowner and offering a FREE MARKET APPRAISAL you now can draw out the folks who are more likely to consider listing their home.

Keep in mind that 60-70% of direct marketing success is finding the right audience.

2. Make an offer that cannot be refused.

Once you’ve defined your market you want to come up with an offer that will intrigue the prospect enough so that they will react in a positive fashion. Offers usually contain words like “Free” or “Money-Back If You’re Not Satisfied” or “Guaranteed to…” or “For a limited time only”, etc.

3. Sell benefits, not attributes.
Don’t tell me what your product is made of or how many pieces of equipment you have in your plant. Tell me what it or you will do for me. Will it make me happier, richer, more attractive, healthier, etc? Use words that are easily understandable in a legible format. Fancy graphics are nice but don’t let graphics overwhelm your basic message. On the other hand, strong graphics can help capture attention.
4. Current customer are your best customers.
You will expend a lot more resources going after new customers with products they have never purchased before versus retaining existing customers. The chart below is based on some pretty broad averages. However, it does illustrate the point. Using the example, it will take 7 times the resources to sell a new customer a product they have never purchased before. To look at it another way, if you spend $10 per order to sell an existing product to a current customer, you will likely spend $70 per order to sell a new product to a new customer.
 

Current Customer

New Customer

Existing Product

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5

New Product

2

7

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