What is Direct Marketing?

Jul 13

For people who aren't familiar with the term, this post describes what direct marketing is. How is it advantageous for a company?

Marketers typically view the world through two lenses. And both are valid even though they do not easily merge for most clients. One is the brander and the other, the direct marketer.

The best marketers fuse these two strategies to maximize advertising budgets. Nevertheless, direct marketers demand a given return on their marketing investment to deliver the company's financial objectives.

Let's address what direct marketing is not

It is not just direct mail or any specific channel. Direct marketers (often referred to as direct response marketers) believe that advertising should contain a clear call to action and that the program lives or dies based on results.

In direct marketing campaigns, all channels in both traditional and digital receive the same treatment and evaluation process.

Effective direct marketing strategy must consider the big picture

Direct marketers further believe that the targeting, offers, channels and integration of channels should be tested on a regular basis to deliver the lowest costs-per-lead or costs-per-sale.

In direct marketing, one strategy combination might yield 20,000 new customers whereas the same budget through skillful tested can eventually yield two, three or even four times as many customers.

Getting back to branding, one brand advocate, Walter Lander once said "...a brand is a promise. By identifying and authenticating a product or service, it delivers a pledge of satisfaction and quality."

Another way to look at it -
Branding is more about the company and direct response revolves around the product.

Direct marketers are concerned about the total selling process and not just the communications. For great results, they know that leads that are not followed up immediately decrease sales and a poorly written phone script with poorly trained telesales people cause many great programs to fail.

For direct marketers, success demands that all selling steps are planned and carefully implemented. General advertisers or branders, on the other hand, typically consider these somebody else's responsibility.

One of the key services offered by direct marketers is direct marketing planning

The content of the direct marketing plan depends upon the objectives of the campaign. It most often involves new customer acquisition or direct response strategies to generate leads.

Lead generation requires several steps to close the sale and incorporates a sales team and a telesales support group. A direct sale "off-the-page", on the other hand, depends solely on single or repeated messages that sell the product without external sales support.

If a new and untested campaign is designed to help the company enter the direct response world or an experienced direct marketing company, the plan always presents the campaign in test mode. This limits the exposure to failure and attempts to find a winning campaign quickly by testing several things simultaneously.

There is no such thing as a one-off campaign in winning direct marketing efforts

Winning direct marketing programs require accumulating learning through ongoing testing always attempting to beat the control (that is, the winning direct mail package or an entire omnichannel campaign).

Testing never ends. Without it, direct programs either never roll out or loose their effectiveness by wearing out the target audiences with too much of the same thing.

What wins today may not win tomorrow.

Direct marketing plans guide clients to financial success by developing a financial proforma. This proforma works back from the acceptable cost per sale to determine whether the response rates needed to win are within reach.

Direct marketing lives or dies by its results

Direct marketing budgets never look solely at projected response rates, a media plan or some other incomplete approach. Recommended tests campaigns revolve primarily around the allowable cost per sale.

Success equals the plan's ability to acquire the desired sales volume at the allowable cost per sale.

The client must develop or share their allowable cost per sale (or allowable cost per customer) with the direct marketer before (s)he writes the plan.

The plan includes the product description, the target audiences, the competitive environment, the creative strategy, the channel selections, tracking requirements, digital support, telesales/sales support, audience target list counts and so forth focusing on the budget for the test implementation.

If the company assigns the planning task to dmcg, we can implement all phases of the plan assuring the best possible environment for success.

There are other aspects to direct marketing not discussed here. Which ones does your company ignore in your direct marketing strategy?

Ted Grigg

Ted Grigg is a direct response strategist who helps growth-focused companies reduce risk by identifying weak assumptions before they become costly mistakes.

Over the course of his career, Ted has evaluated several hundred million dollars in direct response testing across direct mail, digital, print, television, telephone, and other channels. His work combines direct response strategy, acquisition economics, customer analysis, creative evaluation, offer development, and disciplined testing.

Ted has worked on both the client and agency sides of the business. That experience gives him a practical understanding of the pressures facing executives, marketing teams, agencies, and service providers—and of the problems that arise when activity, media volume, or creative preference replaces a clear economic objective.

His consulting work helps organizations examine such questions as:

Are acquisition goals economically realistic?
Is the allowable Cost Per Sale supported by customer value?
Are targeting, offers, creative, media, and response paths working together?
Are tests structured to produce reliable business decisions?
Are unproven assumptions being treated as facts?
Is the organization measuring sales outcomes rather than convenient proxies?

Ted’s experience includes the development of direct mail and multichannel acquisition programs for insurance, healthcare, financial services, technology, nonprofit, manufacturing, retail, transportation, communications, government, and business-to-business organizations.

For a national direct-to-consumer insurance company, he developed a direct mail format that defeated established controls and helped expand the productive use of compiled prospect lists from less than 10 percent to more than 30 percent of total direct mail circulation within one year. He also planned Medicare lead-generation programs for more than 60 regional and national HMO and PPO organizations, with some programs exceeding sales projections by as much as 60 percent.

Ted founded Wyse Direct, a direct marketing division of Wyse Advertising in Cleveland, where he developed acquisition programs and helped launch a new technology product for Seiko Instruments by generating a predictable flow of qualified sales leads for its national sales organization. As vice president of new business development for the Grizzard Agency, he helped broaden the agency’s strategic capabilities and pursue new commercial and fundraising opportunities.

He is the author of The HMO/PPO Marketing Plan—A Step-by-Step Guide, published by Executive Enterprises, and has written numerous articles and conducted webinars on direct response strategy, testing, creative development, and marketing economics.

Ted earned a Bachelor of Arts degree from Abilene Christian University and completed two years of graduate study at Texas Tech University. He is the founder of DMCG, LLC.

http://www.dmcgresults.com