Direct Marketing

Direct marketing is an approach to communicating with customers that consists of direct contact with carefully targeted individuals both to obtain an immediate response and to cultivate a long-term relationship. Direct marketing can be thought of in contrast to mass marketing, in which broad customer segments are reached with standardized messages, typically delivered through such tools as print and media advertising, sales promotion, and public relations. In a direct marketing approach, very narrow segments are targeted, and customized communications are directed at these narrow segments, based on common needs or response objectives from each segment.

Direct marketing can take many forms. Personal selling is an example of direct marketing, where companies use a direct sales force to individually understand customer needs and propose solutions. For example, pharmaceutical companies have traditionally relied heavily on personal selling as a way to communicate directly with physicians about advantages and benefits of new drug formulations. Direct mail is another direct marketing tool, which involves sending an offer, announcement, reminder, or other form of communication, directly to a consumer or business customer at a particular address. Companies that use direct mail are able to select very narrow target markets, to personalize the communication to the specific needs of that narrow target, and to easily measure the responses generated by the communication. Traditionally, direct mail was paper based and delivered through the U.S. Postal Service, but technology has made possible lower-cost alternatives, such as fax mail, e-mail, and voice mail. Of course, with reduced cost has come an explosive growth in direct mail, and consumer annoyance has also increased. Telephone marketing is also a direct marketing tool, and companies use both outbound telephone marketing to proactively sell to consumers or business customers, and inbound telephone marketing to reactively receive orders from customers. Outbound telephone marketing has many of the advantages of personal selling, such as the ability to tailor the message to needs of the individual consumer and ability to respond to objections directly. This tool delivers these advantages at a fraction of the cost of face-to-face personal selling. Again, however, with cost advantages come the ability of marketers to over-use the tool, and consumer privacy and annoyance concerns have grown as the tool has become more popular.

Many companies are shifting resources away from mass marketing and toward a direct marketing model. In some companies, traditional mass marketing tools are being supplemented with direct marketing tools, whereas in other companies a direct marketing approach has become the primary tool for communicating with customers. An excellent example of this transformation is http://Amazon.com, which has almost exclusively used a direct marketing approach, primarily with e-mail, and has successfully built a strong brand name and a large following of very loyal customers. For sellers, direct marketing is a powerful tool for building relationships with individual customers. Effective use of customer databases allows companies to conduct an ongoing dialog with customers, rather than the one-way communication that is the hallmark of mass marketing.