Direct marketing is any marketing or communications activity that directly connects a business with a prospective or existing customer. In the process of direct marketing, there is no intermediary between the business and the customer; the communication/promotion is direct (in this way it differs from most forms of mass marketing).
Direct marketing is typically highly targeted and designed to connect a business with a particular demographic or target market (usually producing a higher rate of return/ conversion than other forms of marketing).
It’s a common misconception that direct marketing only takes the form of physical activity (such as direct mail, experience stands or catalogues). Though this used to be the case before the invention of the internet and mass telecommunications, direct marketing activities include numerous online marketing and telemarketing activities,
Popular forms of direct marketing include:
- Direct response advertising
- Direct mail
- Email marketing
- Digital advertising
- F2F Sales
- Text marketing (SMS)
- Trade shows (B2B & B2C)
- Experience stand marketing
- Social media marketing
The list below will take you through the popular forms of direct marketing activity mentioned above, for each providing explanations, advantages and disadvantages.
Direct mail is the process of sending a letter and marketing material to a prospective or existing customer, to be able to carry out this direct marketing activity businesses must gather or acquire address and demographic data on a specific group.
Direct mail is one of the original forms of direct marketing, having reached its height of popularity in the 1990’s it remains a popular way for businesses to reach new and existing customers.
The significant advantages of direct mail are being able to present your offering and provide prospective customers with the right amount of information; it also gives the customer time/space to read your promotion and material then make a purchase decision without feeling pressurised.
One final advantage of direct mail is that if a business can demonstrate that a direct mail marketing campaign is of legitimate interest to the group being targeted/contacted via letter, the sender (business) is not required to have consent to send a letter (under GDPR).
Disadvantage wise, the cost of sending letters even at volume is extremely high – a business intending to carry out this activity would have to pay for letter/material printing, envelopes, franking machines and more (finding a low cost / high-quality envelope provider like BestBuyEnvelopes will help bring the cost down).
The process of telemarketing involves a business or intermediary gathering or acquiring telephone contact details and other demographic information on prospective/existing customers, then using such information to target and call a specific group with a business promotion.
Telemarketing can be carried out directly or via an intermediary (such as a call centre who will then pass on interested parties / qualified leads to a business), though the primary form of telemarketing remains where businesses contact prospective customers directly (via an intermediary would not technically be considered direct marketing activity).
Telemarketing is advantageous as it allows a business to directly talk to and try and convince the prospective consumer to purchase a product/service (offering a chance to have a two-way dialogue). It is also of a reasonably low cost to set up and run a telemarketing system.
From a disadvantage point of view, it can be costly to either collect or purchase the data needed to contact prospective customers (under new GDPR legislation you must have legally acquired prospective customer data with permission for telephone marketing).
Overall though the process of telemarketing has become more difficult and expensive from a data perspective, it remains a high converting form of direct marketing (particularly for B2B businesses).
Direct response advertising
Direct response advertising involves a business using an advertisement to ask prospective customers to reply/ express interest to the ad (typically via a website form or telephone number). Direct response is commonly carried out via mediums including newspapers, magazines, radio stations and television channels.
An example of direct response advertising; A broadband and phone company puts an advertisement in a national newspaper asking prospective customers seeking a business broadband package to get in touch via phone. The customers call the phone number and are connected directly with the business’s sales team.
Direct response can be considered a blend of mass marketing and direct marketing, depending on how it is carried out and how you define it. This is because the business puts out a message/promotion to a broader audience (not so targeted audience) in the hopes of attracting the attention and response of a specific demographic).
A major advantage of this form of direct marketing is that the customer must make first contact with the business in response to the advert / demonstrating their interest in the product or service being advertised (qualifying them as an engaged lead and avoiding any marketing permission issues).
From a disadvantage perspective, direct response advertising may be targeted to a specific audience but the medium the advertisement is placed on cannot necessarily be so targeted or inferred as targeted. This less refined audience typically results in lower conversion rates/return on marketing activity.#
Over the last 20+ years, email has grown to become the primary form of electronic communication. Email marketing is a process whereby a business sends a marketing message via email to the existing or prospective customer (hoping for direct response / to drive a specific action, i.e. visit a landing page).
To carry out focused email marketing activities, businesses must gather or acquire the necessary email contact and demographic information to be able to target and reach a specific group.
The primary advantage of email marketing is it remains the highest converting form of online marketing (particularly in B2B communications), email marketing can also be extremely low cost, (depending on the email marketing software you use). Additionally, you can gather and use data to generate email analytics, mapping response to messages and utilising this data/information to refine your marketing decisions and copy (increasing return and efficiency over time), allowing a business to adapt their offering based on prospective customer preference.
From a disadvantage perspective in recent years reply and conversion rates have dropped significantly for email marketing, as customers are overwhelmed by promotions/emails sent to their inbox (the white noise effect). Email marketing is also profoundly affected by GDPR and now in most cases, unless clear legitimate interest can be clearly shown, you must have consent to contact a prospective customer within the EU (and be able to demonstrate such consent). Acquiring or gathering customer data with permission for marketing can be expensive, making this activity more costly than it was previously.
Digital advertising is where business creates and delivers an advertisement directly to the customer via the internet (usually via an advertising platform such as Google Ads or Facebooks Ads). Digital advertising is similar to direct response in that it trying to prompt a customer response but differs in that it is much more targeted (and only seeks to drive a prospective customer to a particular landing page or generate brand awareness).
One of the key advantages of digital advertising is that digital advertising platforms allow a business to target particular demographics using factors such as age, gender, location and more. Additionally, you can usually refine your advertisement messaging to increase conversion by using the analytics data accrued from the campaign.
Consent to use this third-party data to target customers also is already assumed to have permission from the potential customer (it is expected the advertiser has such permission as they are providing the access/ability to target).
Disadvantage wise digital advertising although targeted is only as good as the data it is based on and can only target customers ultimately to a limited degree. It is also a typically costly endeavour (most digital advertising platforms require advertisers to bid increasing amounts to appear on relevant platforms/reaches). It also needs a decent level of understanding regarding PPC and other forms of digital advertisement to carry in out / maximise campaign efforts, return and conversion.
This said digital advertising is fast becoming one of the primary forms of direct marketing and as the technology and the digital advertising eco-system around it evolves, you can only expect it to become more cost effective and highly targeted.
The oldest form of direct marketing, face to face sales (F2F sales) is where a business contracts an employee or salesperson to physically connect with an existing/prospective customer at their place of business or dwelling. The objective of the salesperson is to convince the customer to purchase a product or service. Customers are typically targeted only using location data, or in the case of businesses, more publicly available data is available allowing businesses to better target potential customers (i.e. industry, financials, company age…).
The classic example of F2F sales is a door to door book salesman, in the 20th century these doors to door salesman were standard and were contracted by companies to sell their products/services directly to the customer (often they carried product stock with them, negating the need for delivery).
In terms of advantages, F2F sales can be a straightforward and practical way for businesses to promote their offering to a customer, having a direct conversation increasing the chance to sell.
The downside of this type of direct marketing is that it is typically limited in terms of targeting because of the only basic information you can gather concerning a fixed address (mainly residential). Additionally, in many cases, prospective customers may find this type of marketing an intrusion on their privacy / unwarranted interruption to their normal activities (dropping conversion and increasing the possibility of consumer complaints).
Text marketing via SMS messages is where a business sends a text message containing a promotion directly to the existing/prospective customer; the customer can then respond for more information or follow a web link provided to progress in the sales cycle.
The advantage of text message marketing is that the majority of customers own and will have on their person a mobile phone at all times, meaning you almost guarantee they receive a message/promotion and read it.
The downside of this method is that it is often seen as an invasive and an unwanted form of marketing by customers, as the message will warrant their attention before knowing what it is. As with telemarketing, it is critical to have customer permission to text market, acquiring or gathering the demographic data linked to mobile phone numbers can also be extremely costly and difficult.
Often text marketing works well where the customer knows the company and are using their service already; it can be a useful way to upsell or cross-sell existing customers. Conversely, it does not work so well with new customers as per the details above (i.e. an excellent example of SMS marketing is mobile phone companies who use text messages to promote their products/services consistently to existing customers).
Trade shows (B2B & B2C)
Trade shows are industry focused events that bring together businesses and customers to discuss the latest development, trends, products and services in a particular industry. Trade shows are more common for industries that have B2B sales model and where products/services are expensive and complex (require in-depth explanations). For example; there are trade shows for HR software; within these events, you may find businesses either exhibiting in a stand or simply networking promoting their human resources software packages.
The main advantage of trade shows is that they offer businesses F2F access to an interested and qualified group of potential customers. The disadvantages of trade shows are they often expensive to obtain tickets for and even more costly to exhibit at (this is how the event organisers business model works). For many industries particularly with high-value products, trade shows are the primary form of marketing (heavy industry, military, cosmetics).
Experience stands are often employed by B2C businesses to directly engage customers and create awareness about a product/brand to stimulate sales. An experienced stand is a physical stand with example products and product information where a person will directly market to the customer. These stands are often seen in supermarkets, where a person is actively engaging with customers to try a new food product. As well as being a form of direct marketing they are also a form of experiential marketing.
The advantages of experience stand marketing is a business can directly interact with the customer and often convince them to purchase more of the product by offering a sample. On the downside, this type of marketing is often expensive to maintain, as the business will have the pay a provider (i.e. supermarket, council…) for the right to have a stand-in operation on their site. There is also the additional cost of experience stand creation and staffing to consider. These stands often work best for physical products such as cosmetics or food where a large group of customers can be targeted in a high traffic destination.
Social media marketing
Direct marketing in the context of social media marketing is when a business uses social media to directly contact a customer and promote their product/offering in response to an expressed customer need. For example; A prospective customer’s tweets that are there looking for business insurance, a business insurance provider then directly replies to that tweet and promotes their business insurance product.
This type of personalised/direct marketing through social media is growing, as businesses are beginning to realise the value in using social media to directly reach prospective customers who have expressed intent (qualified leads). Many major B2B brands are now starting to engage in this type of activity.
The key advantages of this type of marketing are that businesses can inexpensively reach qualified prospective customers, and actively promote their product/service in relation to demonstrated customer need.
From a downside perspective, a business will require several different types of social media marketing software to identify and engage with prospective customers effectively. A business will also need to pay the cost of having staff consistently monitoring and responding to customers via this method.
Before the internet, catalogues were one of the primary methods customers used to order products from companies (B2C). Catalogues are physical books that detail a business offering, product details, pricing and more. Upon receiving a catalogue, an existing/prospective customer can browse and select the product/s they wish to purchase, then call the sales number given or reply via post to order the product/s (in both cases providing payment details i.e. business banking details for an invoice, card details, cheque…). Businesses will typically send catalogues to existing customers, and new customers can request a catalogue be posted at a physical location or via phone (details from an advertisement).
One of the major advantages of a catalogue is that it allows a customer to browse the businesses entire offering and then make a purchase decision at leisure. From a downside perspective printing catalogues is expensive and sending such bulky items in the post can be costly (this is a significant reason why catalogues are not often sent in an unsolicited manner, it would make for costly and ineffective marketing).
Catalogues work best for businesses that sell a large number of products/inventory and need a way to showcase these products to customers with all relevant details (without requiring the customer to be onsite).
Similar to direct mail, leafletting involves delivering a promotion directly to a customer mailbox (either business or residential). Leafletting differs to direct mail in that a leaflet (promotional material) is delivered by an employee or contracted agency directly to a home or business (not via post).
The offering is often also generalised and much less targeted (only by area). The primary advantage of leafletting is that it is far more cost effective than direct mail to deliver many leaflets. Additionally, for local businesses who cater to customers in a specific area, leafletting can offer a very inexpensive way to advertise to their target customers.
In terms of disadvantages, leafletting is typically not a personalised marketing activity and as such has a much lower conversion rate than direct mail (there is also a certain amount of legislation in the UK that dictates how and what you can deliver).
Direct marketing is the future of marketing
The popularity and effectiveness of different types of direct marketing have changed significantly over time as communication/marketing channels change and new types of direct marketing become available. One thing though remains constant, that being that business are continuingly willing to invest heavily in direct marketing as it is generally able to offer much higher ROI than mass marketing (particularly for businesses operating on a B2B model)
Finally, as data becomes ever more critical to marketing efforts, direct marketing is likely to become the mainstream of marketing as opposed to more mass market options.