Direct marketing is nothing but getting the message directly to the customer without using any intermediaries. There is a growing concern about the decrease in the value-generating roles of intermediaries; companies have started serving their customers directly and through a process of disintermediation.
Direct marketing is an interactive system of marketing, which uses one or more advertising media to affect a measurable response and/or transaction at any location.
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Today marketing uses a number of media like mail, telephone, print, television, radio, and new vehicles like infomercials, home shopping networks, and the ever-powerful Internet.
The goal of a direct marketing program is to generate a response by persuading customers to return a coupon or dial a toll-free number or place an order online using a personal, secured network.
There are different forms of direct marketing. An advertisement is defined as direct when it either stimulates a direct order or generates a qualified lead that can result in a sale or drives the footfall leading to higher sales. All forms of media can be used for direct marketing. While both general marketers and direct marketers use similar media, it is the method of evaluation of results that distinguishes the practice from one another.
Direct Marketing Techniques
Direct marketing techniques are mentioned below:
Direct mail is unsolicited mail, which most of us are familiar with. For some of us, it is fairly irritating and we call it “Junk mail” and throw it or ignore it without reading it. Companies of all sizes and shapes use direct mail. This mail is generally based on mailing lists the companies buy from independent sources, or in some cases is confined to customers who have made purchases earlier.
Google, Yahoo, Hotmail, AOL, Amazon, Fabmart, Indiatimes, and many others have vast lists of home and e-mail addresses. Direct mails generally generate lower response rates from potential customers. The cost of direct mail as e-mail is practically nothing.
John Goodman, CEO of India and South Asia, Ogilvy & Mather believes the Internet is the perfect medium for direct marketing. HLL (Denim aftershave, Lux), Hyatt Regency, and several banks have effectively used direct mail for their credit cards.
Both, consumer and B2B companies may send catalogs of their entire product lines, mostly in print form, sometimes also online, as CDs, or even videos. Considering the global scenario, many companies use catalogs to sell a variety of merchandise including clothing, and cosmetics. According to Direct Marketing Association forecast, catalog sales reached $16.3 billion in 2006.
The Internet has particularly boosted the catalog business and companies present their catalogs and accept orders over the Internet. Catalogs of marketers such as Fabmart, Amazon, McGraw-Hill, Prentice-Hall, Dell, and others are available on their websites and anyone can place an order then and there.
Some companies started as catalog companies and subsequently also branched into retail outlets, such as First and second bookseller initially had a website that presented its catalog but now also has a retail outlet in New Delhi. Anjali Textiles, Otto-Burlingtons Mail Order (P) Ltd., Mothercare India, Charag Din, and others use catalogs.
A direct marketer can use television and radio. Almost entire advertising with respect to direct marketing occurs on television. This type of advertising is either in the form of direct response advertising or support advertising.
Direct-response advertising encourages customers to place orders by using a toll-free telephone number. Support advertising informs customers generally to take part in sweepstakes or expect something in the mail. An interesting example of support advertising is on the NDTV news channel.
Airtel encourages customers to use its cellular service and make two calls then answer a simple question of the day. The winner gets ` 1,00,000 for the correct answer. The message is broadcast by NDTV and also the winner of the day is announced by NDTV in its news.
Some companies use a new form of direct-response advertising on cable and satellite called infomercials. These are lengthy commercials ranging between 30 to 60 minutes and resemble documentaries. Indian TV viewers are quite familiar with lengthy commercials about losing weight, and portable exercise equipment, and satisfied users testifying the great benefits they derived and ease of use.
Of course, a toll-free number is included to place the order immediately. Infomercials have been reported to be quite effective, audience watch them and place orders.
Newspapers and magazines are not considered to be ‘sound choices’ for direct marketing. There are too many ads competing for attention. Specific interest newspapers focused on financial matters, or sports and hobby magazines are sometimes used.
Direct marketing through the telephone is called telemarketing. It gives the marketer a better chance of influencing the prospect and winning a customer. It is most often used in the screening process. Companies hire several telephone callers, mostly girls, or operate through hired agents. Call centers have become a real arena of telemarketing activity.
Several teams of 5 to 6 members are formed and for each team, there is a supervisor. Individual team members sit in front of a computer terminal wearing a headset. They call different telephone numbers from a list and present the sales talk based on the pre-tested script and update information on the computer screen.
Infomercials and home shopping use TV channels. Electronic shopping is an online information retrieval and shopping service through computers. The Internet is the newest medium for direct marketing. It can be used to access information, communication, entertainment, and a means of transaction. Direct marketing through the Internet involves business in the “market space” as opposed to the physical “marketplace.”
Some authors consider direct selling as the additional element of direct marketing, often called Multilevel Marketing (MLM). Some well-known players in this field include Amway, Oriflame, Avon, and Modicare. The selling steps are the same as discussed earlier. In this situation, the salesperson directly sells to customers only in their homes. Any additional distribution channels are not involved. In India, Eureka Forbes has been very successful and is the leader in this field.
Their salespeople call on homes and make presentations and demonstrate water filters and vacuum cleaners, book orders and ensure installation, etc.