The Field Of Direct Marketing: The Basics
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.
Faxes have not had much of a presence as of late when compared to years past. Fax machine jams and very strict new fax laws have made them an unattractive promotional vehicle.
Emails are commonly used forms of direct marketing. The benefits associated with distributing emails are that they do not cost a lot of money to send out, they can be distributed in a short amount of time, they can be as focused as possible, and they have the ability to reach many individuals in a short span of time. Cons include that it is not hard for a firm’s emails to get lost in the crowd given that so many other businesses already send out email promotions; there is the possibility that emails will end up in the spam folders of people; and marketers may only have access to a restrictive email database for a given list due to strict email opt-in laws.
In very recent years, social networking sites have become increasingly popular marketing tools that allow companies to directly market products and services to consumers. Companies and individuals can set up targeted pages on these sites, and friends and friends of friends of the companies can join the pages. The urls of the pages on the social networking sites can be embedded in email promotions. Furthermore, very targeted ads can be placed on pages within these sites, which provide an attractive pool of millions of new leads.
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.