Direct marketing is a specific way of communication between company and customer, which make direct relationship with them. It consist in direct communicates aimed at carefully chosen customers to obtain their reaction. Main idea of direct marketing is that customer doesn't need to go to shop to find out about offer and make shopping – he gets information about range and can buy products in many ways.
Forms of advertisement used in direct marketing
Direct marketing uses various forms of advertisement without direct contact with seller, which also includes public relations. Sending direct messages (personalization) helps to obtain immediately and direct customer's reaction by buying company's products. Companies in Germany, United Kingdom and France give over 50% of their promotional budget on direct marketing.
Instead of promoting to customers indiscriminately, direct marketing studies customers characteristic and needs, and selects certain customers as the target for promotion. Nowadays, a huge amount of information on customers is kept in databases. Database is a collection of current and potential customers which includes their addresses, interests, purchase history and their behaviour on the market. It may be list of addresses but also information from survey's, new techniques let to take information about customers from website cookies.
Thus, data mining can be very effective for direct marketing. Regularities and patterns for buyers can be discovered from the database to product and select worthy customers for promotion. Data mining, an integration of machine learning, computer visualisations and statistics has been used widely in direct marketing to target customers.
History of direct marketing
In the end of 19th century Sears Company released first mail-order catalogue referred to farmers who lived far from big cities where Sears shops were localised. That led to found new way of how to get better to customer and communicate with him directly. Sears got to customer before he decided to come to shop and thanks to it help him to make a decision. Then, direct marketing started to be way of promotion – companies organised presentations of products, telemarketers started phoning to customers to encourage them to buy products. Finally, direct marketing started to be idea of company action.
Tools used in direct marketing
- Telephone – companies make a call to customer to persuade him (telemarketing). They can offer a product to new or current customer but also get customer's order or opinion. They built special Call Contact Center to meliorate communication with customer and use information from data base to personalize form, which makes better results of talk.
- Post – companies send offers to customers. Thanks to it they can give more information, customer gets an offer and doesn't need to go to shop. He have a chance to contact with company – there's a phone number or address of company in every offer.
- Internet – customers order products from catalogues, which also helps company to save money – they may own only online store. Companies can send offers to customers on mail (which contains newsletters) but it is important to remember that sending too much offers can cause opposite effect. There's a way to personalize e-mail by using data base, it helps to save money and contact with customer directly.
- Television – there are special TV programs for customers, wherein are shown the best attributes of products, which persuade viewers to buy them. It let to make immediate contact with company and order watched products.
- Face-to-face form – is presentation of product at customer's home and persuading to buy the product. It may be organising presentations but also individual talk, which is comfortable for customer but may cause some problems for the company (organizing distribution). Very important is specific approach and ability to persuade people.
It is useful to integrate activities of direct marketing to increase customer reaction. That may be advertising campaign that contains commercials, sending mails and telemarketing.
Objectives and benefits of direct marketing
- improving public relations,
- increase in sales,
- sending timely information about product,
- building relationship with customer.
Benefits of direct marketing:
- providing direct messages to customers,
- easy way for customers to buy products,
- big choice of products,
- saving money,
- direct offer for customers,
- making connection with costumers,
- consumer confidence,
- getting information about customers,
- consumer satisfaction.
Future development of direct marketing
We can observe big development of direct marketing thanks to new look on customer and market. Media and Internet help to get to customer and keep contact with him what increase sales. Companies save money because they take care of specific group of customers and don't spend money on big TV commercials, which don't usually get to appropriate groups of viewers. Customers are delighted thanks to specific look on them. They can buy products easier (on Internet), compare prices and they appreciate products.
- Ling, C. X., & Li, C. (1998, August). Data Mining for Direct Marketing: Problems and Solutions. In KDD (Vol. 98, p. 73-79).
- Roberts, M. L., & Berger, P. D. (1999). Direct marketing management. Prentice Hall International (UK).
- Stone, B., & Jacobs, R. (1988). Successful direct marketing methods. Lincolnwood, IL: NTC Business Books.
Author: Adrian Burzec