In our earlier article, we have mentioned that within marketing market communication, direct marketing is any advertising measure that contains a direct approach to the potential customer with an invitation to respond. The next stage in marketing is direct sales. Direct marketing promotions can take a variety of forms. These are divided into one-step or multi-stage actions.
Direct marketing is a simplified form of direct marketing. In contrast to general mass advertising, however, direct mail has a much higher target group certainty because, in contrast to radio or television advertising, for example, it is either personified or delivered directly.
Direct Response Marketing
The aim of dialogue marketing is to identify a recipient as a potential buyer so that they express their interest in the company and respond to the advertising message. In contrast to direct mail, dialogue marketing actively reinforces the opportunity to get in touch with the company (response reinforcement). In practice, an advertising medium such as a mailing is enhanced, e.g. through inserts, glued-on giveaways, by offering raffles or invitations to events. These advertising messages can also be reinforced, for example, by using particularly exclusive types of paper, cardboard or special colours. Accompanying measures, such as a downstream SMS or a follow-up mailing, are used to intensify the personal approach and increase the possibility of a response through a second advertising impulse to the recipient.
A particularly frequently used tool in direct marketing is the call center. In a personal telephone conversation, the advertising company receives additional information about the customer and his preferences. In dialogue, customer questions can be answered, argued and persuaded much better than, for example, in the simplex dialog of a mailing with a response section for the return. This is reflected in significantly higher success rates compared to classic mailings. On the other hand, the cost per contact is several times higher than that of a sales letter with simple features. However, high-quality mailings sometimes cost more than a phone call and are therefore only worthwhile for correspondingly high-priced goods.
Knowing the history of the customer’s relationship with the company is a critical success factor, as it is estimated that retaining a repeat customer is seven to eight times more cost-effective than acquiring a new one. The possible applications of direct marketing are extensive:
- Sale of products
- Customer information on new products
- Reactivation of existing customers
- Telephone sales
Scheduling appointments for the sales force
No information from publicly available sources such as telephone directories or business directories can be used as external sources for the preparation of a direct marketing campaign, as these sources may not be used for advertising purposes.
Database marketing plays an important role, as it is responsible for all measures relating to the development, design, use and maintenance of a database. The better this information is prepared, the more accurate conclusions can be drawn about purchasing and consumption behavior. On the one hand, the aim is to avoid large and cost-intensive wastage when approaching, and on the other hand, to select the right customers from the database for the campaign.
With the help of database marketing, market segmentation is translated into concrete actions. It is important to constantly maintain the database, because the evaluation of the returns from the promotions as well as other internal data sources such as the field service reporting system and sales statistics allow over time to make better and better predictions about the chances of success of the individual instruments of the marketing mix for the company in question.