Like personal selling, direct marketing allows a company to interact with potential customers to persuade them to take particular actions, such as purchasing a product. To be effective, direct marketing requires attractive offers, effective marketing messages and products and processes that meet customer expectations. Effective direct marketing also requires selecting an appropriate method to contact customers, such as direct mail or telemarketing.
Direct marketing involves one-to-one interaction between a marketer and a potential customer during which a company conveys information about a product or service. Direct marketing materials include catalogs, mailers or fliers. Types of direct marketing methods include telemarketing, email and direct mail marketing and bill advertising.
Telemarketers use the telephone to produce sales leads, make sales and gather information on existing or potential customers. Whereas inbound telemarketers take orders and answer questions that are generated by catalogs or advertising, outbound telemarketers contact customers to sell goods or services.
Direct Marketing Advantages
Direct marketing gives companies the opportunity to test market a product at a reasonable cost. In addition, using direct marketing, companies make direct contact with targeted individuals, which provides opportunities to build relationships with them. Direct marketing also provides a convenience factor, in that the sale can take place at any location, not just a place of business. Direct marketing campaigns also can be designed for various budgets and for different types of offers.
Direct Marketing Disadvantages
The success of direct marketing is dependent on attractive offers, successful customer contact and efficiently meeting expectations, a combination that’s difficult to achieve if a customer database contains invalid or non-current information. In addition, direct marketing may not be successful unless customers are effectively targeted and individualized messages created. Also, databases may not be updated with the most current information, which increases the cost of the direct marketing campaign, and customers may consider the campaigns intrusive.
Telemarketing is a less time-intensive and costly sales method than direct sales, but like direct sales, a company makes direct contact with the customer. For example, a telemarketer can close a sale at one-fifth the cost of a sale made in person. Consequently, telemarketing registers a greater return on investment per marketing dollar than does direct sales. Additionally, telemarketing enables a company to market products to customers in remote locales and to target customers who are difficult to identify with other marketing methods.
Telemarketers purchase lists of potential customers, which can be expensive and outdated. In addition, there is no guarantee that people listed will be receptive to a telemarketer’s call or the products the telemarketer is promoting. To the contrary, telemarketers must deal with some customers who perceive any telemarketing offer to be a scam and an uninvited annoyance, especially if the person has registered his number with the Federal Communications Commission’s Do Not Call list.
Billie Nordmeyer works as a consultant advising small businesses and Fortune 500 companies on performance improvement initiatives, as well as SAP software selection and implementation. During her career, she has published business and technology-based articles and texts. Nordmeyer holds a Bachelor of Science in accounting, a Master of Arts in international management and a Master of Business Administration in finance.