What is Direct Marketing? And How Can You Use It for Your Business?

They say every business needs direct marketing. Is this true? In short, no, not every business needs it. But many businesses do find direct marketing useful: it reduces the cost of non-targeted advertising, attracts warm leads, and turns them into hot ones. Not only that, it's easy to evaluate its effectiveness. For direct marketing to work, you have to perform a qualitative study of your customer base and select the right tools to interact with your customers.

It may seem vague at this point, but direct marketing is actually very interesting. Let's explore this marketing strategy together.

What is direct marketing?

So, direct marketing is a way of promoting a product or service, in which the brand communicates directly with the potential customer. It doesn’t involve intermediaries or third parties; it’s only a personalized dialogue between the business and the B2B or B2C client.

The main aim of direct marketing is to build trust with the customer. The ultimate goal is to motivate the consumer to buy a product or service based on their individual needs, whether basic, psychological, or social.

In this type of marketing, the client is considered to be somewhat separate from the overall portrait of the target audience. The client is not a faceless representative, but rather a person who can be grouped with others based on similar characteristics. The consumer market is segmented as much as possible into unique clusters, and personalized offers are created for each cluster.

An example of direct marketing

The simplest example of direct marketing is a newsletter with a promo code. The email list receives emails with a secret code that gives a discount on a product or service and is valid for a limited amount of time. When it expires, you can track the number of times the promo code was used, and evaluate the effectiveness of the campaign.

Types of direct marketing

Also known as direct marketing methods, there are actually many types of direct marketing to suit various business niches. For example, companies that produce physical products can make presentations at retail outlets or place promotional offers on their product packaging. Businesses that specialize in services may offer personal counseling or training to customers.

Here is an overview of the six most common types of direct marketing.

Direct selling

This is one of the oldest and most effective types of direct marketing. A person or company that is willing to contact a seller directly is most interested in buying, so this type of direct marketing is among the most effective.

The exception is direct mass marketing, in which company representatives interact with random consumers, for example, when promoting a product or service among visitors to shopping malls. Strictly speaking, such sales methods are only vaguely related to direct marketing as they do not involve personalized offers or long-term communication to foster trust.

Direct mail

Direct mail includes commercial offers, personalized emails, and any useful information. All of this is sent directly to existing or potential customers by email. For those who have already made a purchase from you, direct mail allows you to keep warm leads in your database.

Telemarketing

Don't let the name confuse you: we're talking about telephone marketing, not television marketing (although it does exist). Telemarketing is good for gathering information about potential customers. The data obtained can be used to develop an effective advertising campaign with high personalization.

During the phone call, you can also assess the customer’s level of interest in your product or service. If they are interested, you can guide them through all the stages of the sales funnel during the conversation. This works particularly well with the sale of services.

Text messaging

This is probably the most effective way to briefly inform a potential client about your offer. Messages are opened relatively quickly, from an hour to half an hour, and customers often choose a convenient time to do so. A text message cannot be skipped or dropped like a call, and you can add clickable links to the text. 

Print marketing

This method, involving written materials and samples, is often used in network marketing. You can use print marketing to inform customers about the benefits of your product with catalogs, coupons, and flyers. It is slightly less personalized than, for example, direct mail, but targeted newsletters with promotional offers and promo codes also work.

As an added perk, product samples can be attached to the printed samples. They introduce the product to the potential client. This also works quite well because people like to get and use free products and services.

Online advertising

Direct promotion of the product through social networks, messengers, thematic forums, and websites. And yes, business groups and company accounts can benefit from online advertising too. In this day and age, it is no longer necessary to talk about the importance of social networking for a brand: each of us has subscribed to at least one favorite brand on Instagram or TikTok. We all know how a beautiful picture and high-quality creativity can convince us to make a purchase.

Direct marketing tools

The tools of direct marketing refer to the means of communication, i.e., they are the communication channels. They represent the actual methods used by a company to communicate with its customer base. Each of them has its own advantages, and you can't say that one is much better than the others. You can use just one tool or combine several different ones. If you use multiple tools, keep an eye on the content: don't repeat the same message in different communication channels at once.

These are the most popular direct marketing channels in 2023:

Email newsletters

An affordable way to communicate with good, measurable effectiveness. Newsletter strategies can be changed, combined, and alternated. Effective strategies include promotional mailings, triggered email threads, and informational messages.

Mobile marketing

Mobile marketing is a multi-pronged tool that comprises several sub-tools, including SMS messages, banner ads in apps or games, and automated calls. All the tools of mobile marketing are quick and convenient: the user's phone is almost always within reach. With the help of mobile marketing, it is possible to notify the customer base of warm leads about promotions and sales. You can also inform customers about the status of their orders. 

It's true that all the sub-tools of mobile marketing have their own peculiarities. SMS and banners have a limited number of characters, so your message has to be brief. Autodialing can be set up for a narrower time frame than sending text messages (for example, only during business hours). In addition, calls are easy to miss or ignore.

Don't misuse mobile marketing tools. Just a few extra messages can potentially get you banned. Use calls and SMS without being too pushy.

Push notifications

These are short pop-up messages with updates, news, and promotions that appear in the browser or app. They capture the client's attention and increase recognition and conversion. Push notifications have the same limitations as mobile marketing: a short maximum length and the need to be careful with the frequency of use.

Messenger marketing

Or simply known as chatbots. They help you reach more customers and have one major advantage over other direct marketing tools: users can contact chatbots at any time of the day or night. Other benefits include their cost-effectiveness and the ability to collect feedback. But chatbots also have disadvantages: the bot will not attract clients on its own; it can only answer questions, and communication always has to be initiated by the customer. In complex situations, communication with a live person will still be necessary.

By the way, Netpeak is also a chatbot development agency.

What are the business benefits of direct marketing?

There are several benefits, ranging from local to global.

Locally, direct marketing helps businesses to:

• Attract buyers to your product. You can quickly reach your target audience and make the right offer at the right time.
• Maintain interest in the brand. Not everyone is ready to make a purchase immediately. Direct marketing keeps a business in front of interested consumers.
• Encourage the user to become a customer. With one effective situational offer, an interested, warm lead becomes a hot one.
• Keep the customer within reach and stimulate a repeat purchase. The communication does not stop after the transaction. If the first purchase was successful, direct marketing will motivate the customer to make another transaction.
• Get feedback from customers. You can ask the customer for a review or simply ask about their impressions of interacting with the brand.
• Build loyalty to the business. Content personalization and benefits work to create a long-term relationship between the customer and the business.

The global benefits of direct marketing partly or completely meet the global goals of the business itself.

• Improvements in brand image. A business that maintains relationships with customers, makes good offers, and collects feedback will improve its reputation and its visibility. Trust in both the brand and the product grows. All of this brings in new customers, and in the long run, it expands the reach of the business.
• Reduced financial costs. Direct marketing works only with clients interested in the service or product. The budget won’t be wasted on non-targeted advertising, and you will get better results at a lower cost with targeted advertising.
• Profit growth. Personalized customer communication not only provides an inflow of new customers but also reactivates the passive customer base, encouraging long-time customers to make another transaction long after the first one. More direct, trusting communication with consumers translates to more satisfied customers and, therefore, profits for the company.

What does it take to make direct marketing work?

In short - you need to test different tools and methods and not be afraid to implement them together. Even better, use direct marketing alongside indirect marketing as well. In addition to this, there are other steps that are crucial for direct marketing to work at its best.

Here's what you need to do to maximize the impact of direct marketing:

1. Collect the customer base yourself. Working with purchased bases is a strict no-no and also a waste of money. After all, this whole endeavor to foster a long-term and trusting relationship should be of interest to both sides of the communication.
2. Segment your audience. The more, the better: more personalized offers will fulfill the needs of the client more accurately, which will bring better results.
3. Change the strategy. Analyze your sales: identify the channels with the highest conversion rates, and work to strengthen them, including by redistributing the budget from the weaker channels. Continuously monitor the different channels as the situation may change, and this is normal. The main point is to adjust to the new conditions in a timely manner so as not to drain your budget through a passive communication channel.
4. Provide high-quality content at all stages. The success of direct sales depends equally on finding customers, making contact with them, choosing the right communication tools, being timely, and presenting products competently. Fail on one of these stages, and your work on all other stages may be wasted. There are two solutions: either train or hire an employee who can do it professionally, or you can outsource direct communication on behalf of the brand. Remember that direct marketing and a company's reputation are inextricably linked, and poor content will reflect badly on the brand as a whole.

What kind of business doesn't need direct marketing?

It may be tempting to say that direct marketing is an urgent need for all businesses, but this is not entirely true. In some cases, implementing direct marketing to promote the company may even be unnecessary.

Here are a few examples of businesses that will not benefit from direct marketing:

• Businesses that work with a short-term strategy and use conversion rate as an evaluation criterion. For example, the already mentioned mass-marketing campaigns, e.g., cold sales of perfumes, printed products, and starter packs.
• Businesses for which the collection of the client base and targeted work with it will cost more than the final amount of transactions concluded, even in the best-case scenario. For example, small local businesses, such as beauty salons, hair salons, and fast food outlets.
• Businesses that do not plan to train employees in direct marketing or pay for outsourcing.

Conclusions

1. Direct marketing truly benefits most businesses, unless they are too small or rely on short-term strategies.
2. Building a trusting relationship with the customer is good for both sales and brand reputation.
3. Direct marketing tools can and should be used in combination in an effort to create omnichannel communication with the customer base.
4. For marketing tools to work effectively, you need to create an active customer base and provide customers with quality content.