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- What is Direct Marketing?
- Who uses direct marketing?
- Important questions for marketers
- How is direct marketing useful to marketers?
- How does direct marketing make this possible?
What is Direct Marketing?
- Direct marketing is a form of marketing communications that allows companies to establish one-on-one dialogue with their customers and target audience . Unlike mainstream TV or print, direct marketing is highly targeted, and its results are measurable
Who uses direct marketing?
- Blue-chip companies, such as American Express, Dell, Reader's Digest, Mercedes Benz and Prudential, have been using direct marketing as a core component in their marketing communications mix, and as an important channel to build their brands.
Important questions for marketers
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- Q: Are you getting less for your marketing dollar?
China currently tops the world in terms of growth in spending on advertising. By 2011, China will probably become the world's third largest advertising market, after Japan and the US.
In 2004, consumers in big cities such as Shanghai and Beijing were exposed to over 40 TV advertisements per day1. Advertising clutter is making it increasingly difficult for marketers to catch consumers' attention.
With TV media inflation averaging 30%, and print media at 10-15% over the past three years in Beijing and Shanghai, corporations are indeed paying more for less customer attention, and ultimately, returns.
A:An under-leveraged medium
An average consumer in Europe receives 88 direct mails each year, compared to eight mails in China. Direct marketing is still an untapped medium in China.
As media clutter grows and rates spiral, corporations who integrate direct marketing into their business strategies stand to gain from early mover advantage.
- Q: Are you investing in the most effective marketing communications mix?
In key cities of China, consumer behavior is evolving just as rapidly as the country's booming economy. Similar to their counterparts in the US and Europe, Chinese consumers are becoming selective in choosing which information they want to receive.
To stay effective in targeting and winning over potential customers, corporations must expand their marketing communications beyond mainstream channels to get their messages across effectively. In fact, diversifying beyond mainstream media is becoming a prevalent trend in the US and Europe.
A:Giving customers the information they want, when they want it, through the way they want it.
Direct marketing allows marketers to be very specific in targeting.
With the help of powerful data management and analysis tools, marketers will instantly know who they should target, with what products and offers, and how to communicate with them.
The outcome is higher communication effectiveness, less waste, and thus less spending.
- Q: How many customers did your last TV commercial bring you?
Though measurement tools are available, it is still difficult to attribute any gains directly to mainstream advertising, such as TV commercials, billboards and print advertisements.
Marketers are facing growing pressure from their management to make returns on marketing investment measurable. This inability to provide a quantitative assessment of returns on investment makes it hard to justify increases in marketing budgets.
A:Now you will know what works
Direct marketing allows for every key aspect of the program to be tracked and measured. Marketers will be able to know what works, and what does not.
The availability of data provides a solid platform to measure marketing investment returns and formulate future business strategies.
- Q: Are you getting less for your marketing dollar?
How is direct marketing useful to marketers?
- Direct marketing allows marketers to tailor their communications so that specific messages and offers can be targeted at different groups of customers, thus yielding the highest response rate. It is therefore very useful to marketers who want to complement their mainstream advertising with another communications channel that generates measurable results.
How does direct marketing make this possible?
Example: A luxury continental automobile manufacturer wants to acquire new customers. They can place advertisements in TV or newspapers, or they can leverage direct marketing.
Through direct marketing, the manufacturer can use data to pinpoint a very specific group of potential customers who reflect the exact target audience they are seeking. One example would be the current owners of a four-year-old high-end imported car.
This approach ensures the manufacturer's offers can target those potential customers with the highest propensity to purchase. As direct marketing allows marketers to track and measure responses, the approach can be fine-tuned to achieve optimized returns on investment.