What is direct marketing

Direct marketing

Direct marketing is an advertising measure in which existing and potential customers are addressed directly and personally. Direct contact with the individual persons is usually established by fax, letter, telephone or email. People are rarely visited personally on site. An important part of direct marketing is asking customers to react (also Response element called). A reaction can be, for example, an inquiry about a product, a phone call about customer satisfaction or an order. If the existing or potential customer replies to the marketing measure, this represents an immediate and measurable success. Direct marketing is also often referred to as dialogue marketing.

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What distinguishes direct marketing?

What distinguishes direct marketing from other marketing measures is that interactive relationship between the company and the customer. Unlike other marketing measures, direct marketing is not primarily about increasing sales or turnover, but about the relationship with the customer himself. Direct marketing is measurable through what is known as the response element. A response means nothing more than a reaction or answer to the direct marketing measure. This can be, for example, a completed postcard, a phone call or a particular website. In this way, the success of an advertising measure can be measured immediately. There are two ways to do this:

Response rate: Is the ratio of responses to the total number of people addressed. Often depends on several factors, such as the design of the advertising material and whether the product requires explanation.

Cost per Order (CPO): The CPO tells you how profitable the advertising measure is / was.
Here, the total costs of the advertising measure are divided by the orders and orders received. If the sales cover the costs, the measure is profitable.

Direct Marketing Instruments

Various instruments are available for direct marketing:

  • Mailing advertising: E-mails are a common means of direct marketing. With the help of this instrument, potential customers as well as existing customers are addressed directly. The content of such an e-mail can be purely informational, e.g. newsletter, contain competitions or present a product.
  • Advertising via SMS / MMS: This form of advertising requires the recipient's prior consent. This is the case, for example, with existing customers who have stored their contact details.
  • Advertising by phone: Direct marketing via telephone is one of the most important instruments, but is subject to the law against unfair competition ยง7 II No. 2 UWG. For this reason, telephone marketing is used as an instrument for acquiring new customers almost exclusively for B2B acquisition for companies, as it is only possible to a limited extent for acquiring new customers in the B2C area.
  • Advertising by letter and flyers / brochures: This form of direct marketing is most likely from the point of view of competition law and is therefore often used. On the one hand, the recipient can be addressed personally by means of letter advertising, or with the help of leaflets and flyers in bulk. This form of advertising becomes inadmissible if the recipient has clearly indicated on the mailbox that advertising is undesirable.
  • Doorstep advertising: Doorstep advertising is rarely used these days, or is expressly requested by the customer. Doorstep advertising is generally permitted as long as the customer visited is not influenced or deceived in an unobjective manner.
  • Direct mail through addressing the public: This tool is well suited for local providers who want to address customers publicly and directly. It should be noted here that every marketing campaign in the public must also be recognizable as such for the recipient. This can be ensured, for example, by appropriate advertising stands or special clothing. There are also some legal guidelines that must be observed. If, for example, advertising is placed on private property, a building permit for advertising systems is required.

Success factor customer database

Direct marketing is based on collected data and informationwhich provides information about existing as well as potential customers. Without this data it would not be possible to establish contact. In the course of building a customer relationship, the database grows due to orders and complaints, saved master data, received emails and much more. steadily on. By collecting and measuring the information, the company can get a comprehensive picture of its existing and potential customers and thus use advertising in a more targeted manner.

The database varies depending on the industry and business area and a distinction should also be made between B2B and B2C. The database should contain the following characteristics:

  • Geographic (includes, among other things, the addresses of the recipients)
  • Demographic (Age, gender, marital status, etc.)
  • Sociographic (Income, purchasing power, level of education)
  • Psychographic (Knowledge, motives, preferences, wishes, etc.)
  • Information behavior (Media use, communication behavior, etc.)
  • Buying behavior (Brand loyalty, average purchase value, frequency of purchases, etc.)
  • Usage behavior (Intensity, type, environment, etc.)

Advantages and disadvantages of direct marketing

A major advantage of direct marketing is that the advertising measures are greatly enhanced by the so-called response element measure and evaluate well to let. Through the targeted selection of the target group using databases, the Reduce wastage. This results in a more efficient use of the budget and cost reduction. The targeted addressing of the target group, taking into account needs, wishes and interests, creates one strong customer loyalty and increased sales.

Direct marketing has a bad rap. Many people do not want to receive any advertising or inquiries at all and feel annoyed by direct mail. There is a risk that the company will get a bad reputation over time. German laws in the field of competition law and consumer protection limit direct marketing. The exact legal provisions on direct marketing can be found e.g. at https://www.wettbewerbszentrale.de/de/branchen/direktmarketing/ueberblick/. The provisions on data protection should also be observed, see https://www.wettbewerbszentrale.de/de/datenschutz/.

Direct Marketing and SEO

Direct marketing can be used for SEO by attracting potential customers and generating interest in the products and services offered. The aim should be to use the response element to guide interested parties to the website, generate traffic and encourage them to initiate a call-to-action there. This includes signing up for the newsletter, registering or purchasing a product or using a service.