How To Understand Direct Marketing – And Use It To Boost Your Business
By: Dr. Enigma Valdez, C.H. | Posted: 20th February 2006
Direct marketing is a marketing system that uses at least one type of advertising media to effect a measurable response and/or transaction at any location, with this activity being stored on a database.
With continuing growth and development, especially the Internet, a standard definition may not always be possible. Other names for direct marketing have been used such as, action advertising, integrated marketing, directed marketing, target marketing, relationship marketing, and direct response marketing.
Nevertheless, it is important to have a thorough understanding of the official definition. So let's break the definition down.
Interactive means one-on-one communication between the prospect and the marketer.
One or more advertising media means that direct marketing is not restricted to any one particular medium. There is synergy among the different types of marketing media. A combination of a number of media is far more productive than any one single medium.
Whether you are using the Internet or traditional direct marketing methods, measurability applies to the Internet media just as it always has for direct mail, print, and broadcast.
Measurable response is defined as the hallmark of direct marketing. Almost everything in the direct marketing field is measurable. Direct marketers know exactly what they spend and how to get it back.
Transaction at any location is defined as direct marketing's oyster. Transactions can take place by mail, over the phone, at a kiosk, or at a store.
Database is defined as a compilation of known data about a customer or prospect. This includes data such as source of inquiry, credit rating, history of purchases, and so on.
Understanding The Basics Of Direct Marketing
What is the purpose of direct marketing? The basic purpose of any direct marketing system is to get measurable results that produce an immediate profit or benefit. In order to create a measurable response there has to be an offer. This offer has to be a call to action.
An offer to sell a service or product in a direct way to the consumer or business is one way to create a measurable response. Other offers create sales leads, get people to call for more information, get others to visit retail stores, and basically impel people to take some type of action.
There are three key components to producing a response, no matter what type of media is used. These are known as:
1. List
2. Offer
3. Creative Execution
Lists affect 40% of the direct marketing system. They contain names of individuals or businesses and are supplanted by enhanced databases that help profile prospects. Lists make it possible to target specific market segments.
Offers also account for 40% of the marketing success, and are also referred to as the proposition. The offer conveys perceived value and remains the key to success.
Creative Execution account for 20% of the direct marketing success. Given the right lists and offers, superlative creative execution increases response by as much as 50% or more.
The ultimate objective of a successful direct marketing program is to build the lifetime value of the client or customer. This applies to whether direct marketing methods are used or this system is applied to a mail order business. In fact, this applies to any channel of distribution. The customer database is available to cultivate the customers.
Lifetime value refers to the total of financial transactions with a customer over the life of a business relationship.
Frequency refers to the amount of times a client buys within a season, month, or a year.
Recency refers to the amount of time a person or business last purchased.
Monetary determines the amount of money a client or business spends within a month, season, or year.
In order to know how much you can afford to invest in a customer and still realize a profit, you will have to know the lifetime value of a customer. Direct marketing will help you keep tabs on customers by recency, frequency, and amount spent. It enables you to identify market segments of the customer base that offer the greatest potential for profit.
About The Author
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Enigma Valdez is an Internet Marketer dedicated to helping businesses succeed. You can reach him at enigma007@charter.net or visit his sites at Http://www.Enigma-Valdez.com and Http://resultsbasedmarketing.blogspot.com and http://sevenfigurecopywriter.blogspot.com/ What is your single most important question on marketing and copywriting? Ask at
http://www.get-answers.net/?copywriting-and-marketing
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Tags: marketer, marketing methods, direct mail, direct marketing, relationship marketing, target marketing, growth and development, direct response marketing, types of marketing, oyster, advertising media, marketing system, marketing relationship, internet media, measurable results, integrated marketing, marketing media