Benefits and challenges of a direct marketing strategy

Direct marketing is a great way to address your audience and communicate quickly and clearly. In this post, we'll look at the benefits and challenges of running direct marketing campaigns.

Benefits of direct marketing

Personalised messaging

With telemarketing, email, and traditional mail, you can personalise your message. This is a good way to remind your audience what you offer, but it also fosters trust by showing you appreciate their business. Consider Netflix, for example. Their AI algorithm uses the massive amount of user data they have to identify your engagement and viewing patterns, which allows them to generate personalised recommendations. Not only do you see these suggestions when you log in to Netflix, but they also prompt you by sending emails about new and upcoming shows you might like. Most CRM and analytics systems nowadays have built-in tools to help you analyse customer behaviour and customise your messages.

Hypertargeting

When you run a direct marketing campaign, such as through email or post, you can be extremely specific when choosing your target audience. By starting with a large demographic and filtering them based on other traits, you'll end up advertising to a smaller group of leads who will find your campaign message more relevant. This means even if you have a limited reach, your conversion rates will be higher because you're focusing your efforts on people who are more likely to be interested in your offering. Though activities like television and display ads have a broader reach, they also increase your chances of speaking to an irrelevant audience.

Flexibility

Most direct marketing activities are relatively low-risk because you don't rely on external forces to drive your efforts. You can experiment with a variety of activities and messages without negatively impacting your business. For example, you can conduct tests on email copy, subject lines, and delivery times to identify the perfect combination. Unlike A/B testing with two video ads on television, email experiments are also easier and more affordable.

Less resource intensive

Aside from their affordability, direct marketing campaigns also require fewer people to manage them. For example, email marketing, SMS, and direct advertising have automation options that reduce manual work and save time for your team. These methods are also more budget-friendly to start with when compared to other outbound marketing activities.

No intermediary

When you market directly, people who want to hear more about your business will reach out to you personally. Without a third party between you and your customer, you cut down on expenses and reduce conversational barriers.

Well-defined sales funnel

Since you don't have anyone between you and your audience, you can establish a clear customer journey in your sales and marketing funnel. Every response you receive from a potential customer is an opportunity to follow up with accurate answers. This reduces the steps customers have to take to interact with you in person, a crucial element in building trust and relationships.

Measurable success

Direct marketing often yields quick results that you can measure and reflect upon. For example, when you use telemarketing for research or a fundraiser, you'll instantly know how many people are tuned in to your campaign.

Direct marketing challenges

Legal considerations

In many direct marketing activities, you have to be aware of legal regulations such as the Privacy Act, the Spam Act, and Do Not Call Act. Although it's a straightforward process to comply with these guidelines, it still requires you to monitor and update your communication channels regularly. For more information on communications regulations, check the Australian Communications and Media Authority.

Unwelcome and intrusive

A big part of direct marketing is aimed at potential customers who may not appreciate being advertised to. Unless your messaging and targeting are well-researched, your audience may find you intrusive and share their disappointment with their friends and family. This word-of-mouth negativity can impact your brand reputation.

Requires an established market

For a direct marketing campaign to generate results, you should be a familiar name in the market. Being known helps catapult your reach. If you're entering a new market, it might be better to start off with reputation-building activities like content marketing and events.

Environmental cost

Offline activities like traditional mail and brochures often end up in landfills, causing unnecessary waste. To reduce your impact, consider environmentally-friendly materials such as recycled paper, home-compostable and bio degradable packaging, and reusable cartons.

Direct marketing is an effective way to promote and generate awareness for your business. However, your expenses may vary based on the size of your business, your industry, and the type of activities you choose. For example, aside from printing costs, magazines and brochures involve added costs like packaging and distribution. So if you're a small business with a limited budget, it may be better to distribute your brochures via email.

We hope this post gives you an idea of which direct marketing activities can be most beneficial for you. If you have any questions you'd like us to address, leave a comment below and we'll get to it as soon as possible!