Direct marketing may be described as a way of promoting goods and services that uses many forms of media, including faxes, emails, social networking sites, and direct mail. Through this method of marketing, numerous targeted promotions are distributed to consumers and businesses, and particular measuring tools are used to calculate how effective the various promotional mechanisms of the direct marketing mix are.
Before reviewing the various methods of promotion used under the direct marketing umbrella, it is essential to talk about the analytics utilized to compute how effective certain marketing pieces are. Particularly speaking, the most commonly used marketing metrics used are the ROI, performance profit, and the hit rate. The ROI, or return on investment, is the revenue generated divided by the amount of money spent to distribute promotional pieces times 100. Overall, an ROI that is between three hundred and fifty and seven hundred tends to point towards a successful promotion. However, while a person many rationalize that very high ROIs indicate an excellent performance, ROIs that are too high may mean that a marketer isn’t maximizing the amount of revenue that he or she could potentially earn from a promotion. In other words, if he or she spent more money, then it would perhaps be possible to generate more even revenue than he or she already is. The hit rate is the number of marketing targets per thousand who are responding to a promotion, and the performance profit is the revenue minus whatever money was spent to send out a given promotion. Overall, the greater the hit rate and performance profit, the better.
Regarding the types of media used by direct marketers, emails, direct mail, social networking sites, and faxes are some of the most common ones utilized by companies. Each of these will be discussed in detail below.
Email promotions are rather popular direct forms of marketing. The advantages to sending out emails include that they are relatively inexpensive, can be sent out quickly, can be very targeted, and can reach many people in a short amount of time. Disadvantages include that it is easy for a company’s emails to get lost in the mix as so many companies already sent out e-promotions, there is the risk of the emails going into peoples’ spam folders, and opt-in laws may severely restrict the amount of targeted email names that a marketer could get for a given promotion.
Direct mail is the oldest method of direct marketing. It comes in the form of brochures, catalogues, postcards, letters, pamphlets, booklets, and more. For years, direct mail had always been one of the most prevalent forms of promotion in existence. However, it is also among the most costly types of marketing. Printing, mailing, postage, list, and fulfillment costs all have to be taken account with direct mail, and increased postage rates in the past few years have not helped much. While direct mail still has its place in the marketing spectrum, many companies have lessened the amount of direct mail sent out and increased the amount of electronic promotions distributed at the same time in an effort to reduce costs. While cost is a factor where direct mail is concerned, it has its benefits namely in that some of the most personalized promotions are mail pieces, and mail stands out in a digital world.
Amongst the oldest forms of direct marketing around in direct mail. This promotional method comes in the form of postcards, booklets, pamphlets, catalogues, letters, brochures, and more. For quite some time, direct mail has been one of the top methods of marketing around. Nonetheless, it is also very expensive. With direct mail, mailing, printing, list, fulfillment, and postage costs are incurred, and escalating postage rates have not been of much help in recent years. While direct mail remains a main component in the marketing strategy plans of many companies, a good number of firms have reduced the amount of direct mail that they send out and replaced it with cheaper e-promotions in recent years to cut down on costs. While direct mail is expensive to send out, it has its pros namely in that direct mail pieces can be made as personalized as possible, and mail definitely is more visible in a world that is increasingly digital.
Faxes have not been used as much in recent years as they have in the past. Fax jams and limitations due to strict new fax laws do not make them a very attractive method of promotion.
In concluding, direct marketing covers many media and is calculated by hit rate, ROI, and performance profit. The divergent kinds of media covered under direct marketing include faxes, emails, social networking sites, and direct mail.