What is direct marketing?

by Charles George

Recently, I read an article about direct marketing.

It discussed how direct marketing only focused on transactions and customer acquisition with long-form sales letters.

The article then talked about creating a marketing system that was customer focused, made offers, and was in tune with where customers were in the buying cycle.

After reading the entire article, I started laughing. This person was actually building a direct marketing system. They just didn’t know it.

Plus, their definition of direct marketing is very limited.

Direct marketing involves far more than acquisition, transactions, and measuring response rates.

Direct marketing is one of the most effective ways for small businesses to acquire and retain customers to generate revenue.

It is why I have dedicated more than twenty years of my life to improving my skills, knowledge, and understanding of all aspects of it.

When done correctly, direct marketing can transform businesses and change lives.

So, today, I will explain exactly what direct marketing is and why you should use it in your business. Especially, if you are reading this article.

First, what is direct marketing?

According to Lisa Spiller, in her book Direct, Digital, and Data Driven Marketing.

Direct marketing is a database driven interactive process of directly communicating with targeted customers or prospects using any medium to obtain a measurable response or transaction via one or multiple channels.

Let’s unpack this definition a bit.

1. Database Driven

Another term used for direct marketing is database marketing.

Why is there a customer database involved?

A database is involved so we can build relationships with customers. 

We can communicate with them directly.

We can follow up, stay in touch, and make relevant offers to specific customers.

Also, understanding our customers allows us to find new customers who are similar.

Plus, we can identify who our best customers are and make specific offers to them. Moreover, we can reach out to previous customers and reengage them.

By understanding our customers, we can create offers for the top 1%, 5%, 10% or 20% of our customers. Often, these types of offers involve little risk, are easy to implement, and require little expense, which leads them to be highly profitable.

Plus, understanding our customers makes our marketing and advertising more efficient and effective.

The customer database is essential for direct marketing.

Often, people think of direct marketing as the initial offers and converting first-time customers. Yes, this is a component of direct marketing.

Ultimately, direct marketing focuses on building long-term relationships with prospects and customers.

Remember, customers familiar with your business are more likely to purchase at higher price points, are less sensitive to price, purchase more often, cost less to serve than acquiring new customers, and tell others about you.

2.  Interactive process of directly communicating with targeted customers or prospects.

The key word here is interactive. Interactive implies two-way communication.

Normally, this starts with a message from a company to an ideal suspect. When the person responds to an offer, they now become a prospect.

This creates an opportunity for the company to follow up. Eventually, the prospect may purchase a product or service and become a customer.

This interactive process is how relationships are built.

It is the back-and-forth communication that leads to building trust.

Trust is the foundation of a relationship.

3. Measurable Response or Transaction

A measurable response can be claiming a coupon, opting into an email list, calling a phone number, or requesting more information. Also, direct marketing involves analyzing the number of responses from each medium or ad, such as an email or direct mail promotion.  A response can also be making a purchase.

We can use coupon codes, specific URLs, unique phone numbers, or tracking links to measure response.

The medium is important, but tracking the response and who responded is just as important.  

Tracking response rates lets you know what advertising is working and what is not working.

Tracking response rates allows you to optimize your advertising. It allows you to test other offers, sales pages, ad copy, and mediums.

Tracking responses helps you optimize each step of your marketing campaign.

Personally, I prefer simple systems that are easy to implement and that we can build in stages.

Direct Marketing Cultivates Relationships

Direct marketing is NOT one-and-done marketing.

Direct marketing focuses on cultivating long-term relationships with prospects and customers. It is building trust and relationships that lead to long-term customers.

It is providing value and advocating for your customers.

Yes, direct marketing does focus on customer acquisition, but it also focuses on customer retention.

Most importantly, direct marketing focuses on cultivating long-term loyal customers who will then advocate for your business.

Remember, customers are the most valuable asset of a business.

Finally, I will leave you with this quote. “Most companies look at the customer as a means to make a sale. The most successful companies view the sale as an opportunity to earn a lifelong customer.”

Ultimately, direct marketing is about service. It is about serving your customers to the best of your abilities. It is about providing value and making relevant offers to your customers. Most importantly, direct marketing is about cultivating relationships.