Direct Marketing

A method of advertising wherein the aim is to use a specific tool in order to achieve given advertisement related action in a predetermined group of consumers

What is Direct Marketing?

Direct marketing is a method of advertising wherein the aim is to use a specific tool in order to achieve given advertisement related action in a predetermined group of consumers. It uses information such as store visits or website visits made by consumers, which can be correlated to a direct response of a communication action initiated by the marketer. The communication can take many different formats, such as postal mail, telemarketing, point of sale, etc.

 

Direct Marketing

 

Direct marketing is of three major types: telemarketing, catalogs marketing, and direct mail marketing. The last type is the most common today, with the advent of social media and influencer marketing.

 

Summary

  • Direct marketing is a method of advertising wherein the aim is to use a specific tool in order to achieve given advertisement related action in a predetermined group of consumers.
  • It allows benefits such as high segmentation and targeting, optimizing the marketing budget, increasing customer loyalty, testing and analyses of results, etc.
  • It is of three major types: telemarketing, catalogs marketing, and direct mail marketing.

 

Origin of the Term

The term “direct marketing” was first popularized by an American man named Lester Wunderman. In 1967, he identified trends in marketing and defined it using the term “direct marketing.” Thus, Wunderman is considered to be the father of contemporary direct marketing. Coincidentally, he was also responsible for the creation of the toll-free 1-800 number, an invention that is still widely in use today.

 

How Does Direct Marketing Work?

Under the direct marketing method, managers will employ various types of advertising media to interact directly with consumers. Considering the fact that mass advertising, such as on billboards or on the radio, reaches an unspecified number of people, it can be very inefficient. It is because most of the people viewing the ad are not even a part of the market for the product.

The major characteristics of direct advertising include the selection of merchandise via the use of a catalog and then ordering through the mail and delivery by similar means. It uses tools such as direct response radio, grassroots/community marketing, direct selling, direct response TV, couponing, voicemail marketing, email marketing, face-to-face selling, etc.

 

Benefits of Direct Marketing

Direct marketing allows a company to promote its product or service directly to their target audience and measure the results of the campaign quickly, even in real-time. Thus, direct marketing can bring several advantages to a brand. They include the following:

 

1. High segmentation and targeting

It enables the company to reach segments of the audience with personalized messages. Thus, companies that invest their time in researching and identifying the customers that are most likely to convert get a huge payoff. It is because the efficiency of where the marketing team directs its efforts is increased.

 

2. Optimizing the marketing budget

Setting realistic goals is the best method for a marketing manager to achieve sales growth, especially when they are on a tight budget. Proper optimization of a direct campaign enables them to achieve the same or even better results while using only a fraction of the costs usually associated with traditional methods of advertising.

 

3. Increasing customer loyalty

Cultivating customer loyalty is an important aspect of retention and sales growth. It enables companies to increase their sales volume with current and former clients. Digital direct marketing facilitates the sales growth by letting companies communicate with their current customers in a way that the company-client relationship is well maintained.

Thus, companies can continue to bring value to old consumers. Moreover, getting back in touch with old customers for generating new sales opportunities as a huge bonus.

 

Testing and Analyses of Results

Direct response campaigns always give the marketing manager the opportunity to directly measure the marketing campaign’s results. Thus, they can squeeze the most out of the tests. It enables them to tweak their strategy in real-time, and change the campaign with changing consumer preferences and values.

 

Additional Resources

CFI is the official provider of the global Certified Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful:

  • 4 P’s of Marketing
  • Hard Sell
  • Market Segmentation and Targeting
  • Value Proposition

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!