Overview of Direct Marketing

This advice was kindly provided to Bytestart readers by The Essential Business Guide

There’s more to direct marketing than mailshots. Get creative!

Direct marketing is simply a message that speaks directly with your customer. Used well, direct marketing can be a cost-effective and well-targeted method of getting your message across.

Direct mail still dominates, but telemarketing and newer technologies such as texting and e-mail are on the increase, too. You could also think about inserting leaflets in papers and magazines, or ‘piggy-backing’ (putting your communication in someone else’s mailing). This can work well if the two companies’ products are well matched.

A high-quality, well-researched and well-maintained list or database of addresses is the key to good direct marketing. It is worth spending time and money on this.

If you buy a mailing list, remember that it makes your first communication the most expensive. If you can use it several times, it reduces the cost, so try to build this into your planning.

Postage is expensive, so are telephone calls, so keep your list well maintained and don’t waste time and money on duplicates or people who have gone away. Communications addressed to people who have died can cause offence, as well as being wasted. Email campaigns can prove very cost-effective and are being used much more frequently.

The Data Protection Act contains many complex rules, and privacy laws are tightening (remember Mailing/Telephone/Fax Preference Service). The onus is on you to check that what you do is within the law.

Planning for direct marketing:

• Divide your list into ‘hot’, ‘warm’ and ‘cold’ prospects. Your research will help you to decide who is most likely to buy from you.
• Decide on your message. Keep it simple and direct, emphasise the benefits of responding.
• Include a clear ‘call to action’ — what you want them to do. Make sure any contact details are very clear and prominent. Do not expect too much: If you can persuade people to visit your website, call you or post a reply slip as a result of one mailing, that is the most you can expect.
• Plan for a series of contacts. A mailing will have a much higher response rate if it is followed up with a telephone call.

• Measure everything. Keep accurate records. Know your breakeven point — how many sales you need to cover your costs.
• Work out the cost per response, the cost per order, the amount each customer has spent with you over time.
• Use past results to help you design even more cost-effective communications in future. In general, those who have spent the most, most recently, are most likely to buy from you again.