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Direct Marketing

 Direct Marketing

         Direct marketing is a selling practice where the potential customer is approached directly. The advertiser reaches out to his customers through telephone, e-mail, brochures, coupons etc. Direct marketing does not involve age-old advertising tools like newspaper, radio and television. The idea is to have a direct interaction with the customers. Radio, television act as barriers and do not allow a direct communication.

         Direct marketing is considered the best marketing strategy for getting in touch with the customers. Traditional methods of advertising often fail to reach the target clients. For example, a marketer who is trying to sell baby products on radio will have to find a radio station which airs programmes which appeal to mothers. However there is no guarantee that at that exact time when the advertisement is being aired all mothers are tuned in to that particular radio channel. So the marketer has not used his promotional budget judiciously by investing in a scattered means of advertising.

          Direct marketing companies maintain huge databases which contain relevant client information. These databases are often shared or sold to other companies which follow direct marketing. In our case, the marketer makes use of a database where the personal information of all probable clients is maintained. For example, a marketer who wants to promote his new cat food will get in touch with the local pet stores. These pet stores will have the telephone numbers and e-mail addresses of clients who own cats.

         Another very important principle which is followed in direct marketing is the “call to action”. The customer is prompted to act. This action may be asking the customer to call a number or logging on to a website. Irrespective of the medium used for advertising this marketing approach thrives on traceable and computable responses from customers. A well-implemented direct marketing programme can show the investor how many clients acted in response to the “call to action”. For example, a marketer sends text messages to 100 clients asking them to call a number if they want to avail his new product. Out of 100, if 50 clients call back the marketer knows that his marketing strategy received a 50% response.

          In direct marketing the number of clients who respond to a proposal is termed as ‘response rate’. The number of people who responded to the “call to action” divided by the total number of clients who were approached by the marketer is the response rate. It is generally expressed in percentage.

         Channels of direct marketing

  1. Email Marketing

              Here promotional campaigns are conducted through e-mails sent to the target clients. This is a very popular direct marketing tool. E-mails are comparatively quite inexpensive. They are easy to create and send. The marketer can send them anytime of the day and can easilycalculate the ‘response rate’ of his promotional campaign. All these reasons make e-mailmarketing a favourite among marketers. Email marketing has its share of disadvantages aswell.

  1. Often a promotional email is stuck in a spam filter. Such filters are put to use by individuals harassed by unsolicited bulk emails. In such cases the email remains undelivered.

  2. At times the email might get lost in email overload. There are so many emails that the customer cannot distinguish between solicited and unsolicited mails.

  3. Customer response is also lost with time. When a customer subscribes to a newsletter, generally the responses are quick in the beginning but dry up with time as he loses interest.
      
  1. Other online channels

           a.    Display ads

               These ads appear on the web pages in form of pop ups, static banners, floating units etc.They are generally placed next to the contents on the web page to attract the client’s attention. The client can click on these display ads to purchase a product or service or have detailed information on it. According to a survey, between the years 2010 and 2011 the expense incurred on display ads has increased by 24.5%.

            b.   Search engines

                In U.S , almost 50% of the investment made on online advertising goes to search engines. Search engines help in popularising websites among clients. When a client searches for a product or service, instantly the engine scans through millions of indexed pages, and brings forth a list of topics which match the search topic. The client more than often goes through only the first four or five search results. So it is beneficial for a marketer if his website features in the top five listings. Also out of the many search engines only a few are very popular among users. So the choice of search engine where the website features in top five is equally important for a successful marketing campaign.

           c.   Social Networking Sites

              Social networking sites like Facebook, Twitter, MySpace, YouTube etc have become immensely popular. They are commonly used to communicate with old friends and make new ones. The popularity of such sites is proving to be a boon for direct marketers. These sites act as massive databases of client information extremely important for direct marketing. The direct marketer uses the information to send targeted promotional messages to clients, thereby, saving both time and money.

  1. Mobile/ Cell Phones

             Mobiles provide an excellent platform for direct marketing. Promotional campaigns are cost-effective, timely delivered to the customers and the response rate can be measured quite accurately. Many direct marketers are replacing text messaging for e-mails.Mobile marketing can be done through SMS (short message service). Text messages help the marketer to have a direct interaction with the customer. MMS (multi-message service) make use of audio and video and are more attractive. Mobile applications are interactive advertisements which serve the same purpose.

  1. Direct Mail

             Direct mail is communicating with the customer through printed advertisement, letters etc. InU.S this form of mail is called “advertising mail”. Cost of mailing is low as bulk mail rates come into play. In many developed countries like U.K and U.S direct mail play a very important role and subsidized rate for bulk mail has been established. Marketers make use of targeted mailing lists for maximum success of their promotional campaign. Potential clients who are most likely to respond positively are included in this mailing list. For example, an individual who is a regular at a baby food store may receive direct mail for other baby products or services that might interest him.

          Advantages of direct mail

  1. Direct mail helps the marketer in making a personal one-to-one contact with the client. They are easy to create and can be developed in the span of a few days or weeks. The marketer can promptly test price of product or service, offers and potential customers.

  2. The response time to direct mail is also quick. The marketer usually sends an order card and return envelope along with the direct mail. This makes it easier for the customer to respond.

    The marketer can first test his campaign by sending direct mail to a smaller number of customers and then gradually increase the list size. This mailing list if created carefully can be more effective than any other marketing channel. Any particular market segment can be reached if a minute study is done before the creation of the list.

  3. Direct mail faces less competition from competitors because the competitor gets little clue about the marketer’s current marketing strategy.

  4. Direct mail also helps in identifying loyal customers. These customers can be readily added to the marketer’s list in future direct mail campaigns.     
  1. Telemarketing

        Telemarketing is promoting a product or service over the phone. The salesperson tries to convince the customer to buy a product or service. Telemarketing can be performed through automatically recorded messages as well. Generally a telemarketer makes two calls per customer. The first one is made to determine what are the client’s needs and the second to convince and persuade him to buy the product or service. The success and growth of telemarketing has lead to the growth of call centers.

     1. The telemarketer has the advantage of responding to the client’s queries or concerns
          regarding the product or service.

     2. The response rate can be easily monitored.

     3. It is easy to build a strong customer relationship.

        Telemarketing has been severely criticized as many customers find telemarketing calls irritating. Screening list technology and Do Not Call is being adopted to get rid of telemarketing calls.

  1. Coupons

        Coupons are sent to customers to obtain a response from them. Discount coupons get a very favorable response and it draws the customer to the store.

        Digital coupons are available online and are even sent on mobiles through text messages. The customer can download the coupon from the web or directly use the text message at the checkout counter. Generally the customer is asked for a coupon code or promotional code at the counter.

        There are various websites which provide daily online deals to customers. Once the customer signs up with them they receive daily alerts through emails updating them about the latest offers. Groupon, one of the most popular of such sites has more than 63 million subscribers.

  1.  Direct Response TV

        Direct response marketing is also referred as DRTV. It is usually done in two formats. The first part is called the infomercial. This is usually an hour or half an hour long. It describes the various features of the product to the customer. The second part is usually of a smaller time slot where the customer is asked to ‘call now’ and a number is flashed on the TV screen.

  1. Direct Response Radio

        In this form of direct marketing the customer is reached through the radio. The customer is briefly informed about the product and its utility or features and is asked to ‘call now’. Mostly the number provided is a toll free number. The customer may even be asked to log in to a website instead.

  1. Insert Media

        Here the promotional material is inserted into some form of print media like newspaper, catalog, magazine etc.

  1. Direct Selling

        Sales persons are hired by the marketer and are sent door to door. Here a face to face interaction with potential customers happens and the sales man tries to convince the customer to buy his product there and then.

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