Direct mail: What it is, how it works and how is being created
1. Introduction:
In this project we will try to make people understand what is direct mail, the advantages and disadvantages of it among other advertising tools, and all the steps of its implementation, from the “big idea” to the publication. But before proceeding with direct mail, which is a tool of marketing, we have to let people know first of all what marketing is.
Many people have misunderstood the meaning of marketing. The majority of the people asked of what they believe marketing is, had answered that marketing is the advertisement of goods and services in a way that create new needs to consumers, forcing them in some way to purchase products that do not really need.
2. Marketing and Direct marketing
In reality, marketing is more than any other business’s deals with customers. The main purpose of modern marketing is building customer relationship based on customer value & satisfaction or more simply marketing is managing profitable customer relationships. As mentioned before, some people think that marketing is only as selling & advertising, as everyday are bombarded with television commercials, newspaper ads, direct mail offers, sales calls, & internet pitches. However, selling and advertising are only part of a larger marketing mix- a set of marketing tools that work together to affect the market place. (Kotler and Gary 5)
The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it want in target marketing (the process of evaluating each market segment’s attractiveness & selecting one or more segment to enter). The marketing mix consists of everything the firm can do to influence the demand for its product. The many possibilities can be collected into 4 groups of variables known as the “4 P’s”: Product, Price, Place, & Promotion (Kotler and Gary 57).
We are going to concentrate on Direct mail, but to reach Direct mail we have to describe some important parts of Marketing like promotion & direct Marketing because Direct marketing is an important part of promotion & Direct mail is a crucial stage of Direct marketing. Without explaining Direct marketing we will not be able to perceive our audience about Direct Mail. Promotion is one of the 4 components of the mix that contain another series of marketing functions (Clow & Baack 9). Promotion means activities that communicate the merits of the product & persuade them get customer to buy it. For example, Ford spends more than 2.4 billion on Promotion to tell consumer about the company & its many products (Ad Age Dataplace). Dealership sales assist potential buyers & persuade them that ford is the best car for them.
As is said before, marketing calls for more than just developing a good product, pricing it attractively, and make it available to the target customers. Companies must also communicate with current and prospective customers, and what they communicate should not be left to chance. All of their communications efforts must be blended into a consistent and coordinated communication program. Just as good communication is important in building and maintaining any kind of relationship, it is crucial element in a company’s efforts to build customer relationships.
Except from marketing mix itself, a company has also marketing communication mix, called Promotion mix, which consists of Advertising, Sales Promotion, Personal Selling, and Direct Marketing are the tools that a company use to pursue its marketing objectives. Starting with advertising is any paid form of no personal presentation and promotion of ideas, goods, or services by an identified sponsor. The second is the Sales promotion that involves short-term incentives to encourage the purchase or sale of a product or service. Another type is Personal selling, like personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. An additional tool is the public Relations and their purpose is building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, & handling or heading off unfavorable rumors, stories, & events. Lastly and most close to our subject is direct marketing. Direct marketing is a form of marketing that attempts to send its messages directly to consumers, without the use of intervening media (info scouts). Direct connection with carefully targeted individual’s consumers to both obtain an immediate response and cultivate lasting customer relationships- the use of telephone, mail, fax, e-mail, internet, and other tools to communicate directly with specific customers.
Each category involves specific tools. For example, advertising includes print, broadcast, internet, outdoor, and other forms. Sales promotion includes point of purchase displays, premiums, discounts, coupons, specialty advertising, and demonstrations. Personal selling includes sales presentation, trade shows, and incentive programs. Direct marketing includes Direct mail, catalogs, telephone marketing, kiosks, the internet, and more. Thanks to technological breakthroughs, people can now communicate through traditional media (newspaper, radio, telephone, television) as well as through newer media forms (fax, cell phones, and computers) (Kotler and Gary 399).
Although there are many types of direct marketing -telephone marketing, direct mail, online marketing, and other- they all share 4 distinctive characteristics:
• Direct marketing is non-public: the messages are normally directed to a specific person.
• Direct marketing is immediate and customized: messages can be prepared very quickly and can be tailored to appeal to specific consumers.
• Finally direct marketing is interactive: it allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer’s response. Thus, direct marketing is well suited to highly targeted marketing efforts and to building one- 2- one customer relationships ( Kotler and Gary 405).
Today with the trend toward more narrowly targeted or one-to-one marketing, many companies are adopting direct marketing, either as a primary marketing approach or as a supplement to other approaches. Increasingly, companies are using direct marketing to reach carefully targeted customers more efficiently and to build stronger, more personal, one-to-one relationship with them.
Direct marketers communicate directly with the customers, often on one-to-one, interactive basis. Using detailed database, they tailor their marketing offers and communications to the needs of narrowly defined segments or even individual buyers. Beyond brand and image building, they usually seek a direct, immediate, and measurable consumer response. For example, Dell computer interacts directly with customers, by telephone or through its website, to design built-to-order system that meets customer’s individual needs. Buyers order directly order from dell, and dell quickly and efficiently delivers the new computers to their homes or offices.
As the years pass by technology changes and the same happens to direct marketing too. Early direct marketers -catalog companies, direct mailers, and telemarketers- gathered customers’ names and sold goods mainly by mail or telephone. Today however fired by rapid advances in database technologies and new marketing media -especially the internet- direct marketing has undergone a dramatic transformation.
Most companies still use direct marketing as a supplement channel or medium for marketing their goods. For instance, Lexus markets mostly through mass media advertising and its high quality dealers network but also supplement these channels with direct marketing. Its direct marketing includes promotional CD’s and other material mailed to prospective buyers and a web page that provides consumers with information about various models, competitive comparisons, financing, and dealer locations (www.lexus.com).
Whether employed as a complete business model or as a supplement to a broader integrated marketing mix, direct marketing brings many benefits to both buyers and sellers. As a result, direct marketing is growing very rapidly. For buyers direct marketing is convenient, easy to use, and private. Direct marketing gives buyers ready access to the wealth of products and information, at home and around the globe. For seller, direct marketing is a powerful tool for building customer relationships. Using database marketing, today’s marketers can target small groups and consumers. Tailors offers to the individual needs, and promote these offers through personalized communications.
Finally direct marketing can offer sellers a low cost, efficient alternative for reaching their markets. For example direct marketing has grown rapidly in B2B marketing, partly in response to ever increasing costs of marketing through the sales force. As personals sales calls cost $170 per contact, they should be made only when necessary and to high potential customers and prospects. Lower cost per contact media -such as telemarketing, direct mail, and company web sites- often prove more cost effective in reaching and selling to more prospects and customers (Kotler and Gary 459-460).
As a result of these advantages to both buyers and sellers, direct marketing has become the fastest growing form of marketing. Sales through traditional direct marketing channels (telephone marketing, direct mail, catalogs, direct response television and others) have been growing rapidly. Last year direct sales to consumers and businesses in the United States reached more than $2 trillion, about 9% of the economy. Moreover, whereas total US sales over the next 5 yrs will grow at an estimated 5 % annually, direct marketing sales will grow up to 8 % annually. According to the direct marketing association, total US spending on the direct marketing exceeded $206 billion last year, or more than 55% of total advertising expenditures. (Economic Impact)
The effective direct marketing begins with a good customer database. A customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data (Roberts & Berger 149). The data can be used to locate good potential customers, tailor products and services to the special needs of targeted consumer, and maintain long term customer relationships. “If there have been any changes in the past decade it’s the knowledge we now can have about our customers,” says one expert. “Strategically, the most essential tool is our customer database. A company is no better than it knows,” (Alicia 31-33).
Many companies confuse a customer mailing list with a customer database. A customer mailing list is simply a set of names, addresses, and telephone numbers. A customer database contains much more information. In B2B marketing, the salesperson’s customer profile might contain the product and service the customer has bought; past volumes and prices; key contacts (and their age, birthdays, hobbies, and favorite foods); competitive suppliers; status of current contracts; estimated customer spending for the next few years’ and assessments of competitive strengths and weaknesses in selling and servicing the account.
In consumer marketing, the customer data might contain a customer’s demographics (age, income, family members, birthdays), psychographics (activities, interests, and opinions), buying behaviors (past purchases, buying preferences), and other relevant information. Some of these databases are huge. For example, Ritz- Carlton’s database holds more than 500,000 individual customer preferences. Pizza hut’s database lets it track the purchases of more than 50 million customers. Internet portal yahoo! Records every click made by every visitor, adding some 400 billion bytes of data per day to its database- equivalent to 800,000 books. Ford’s customer database contains information more than 33 million customers, including warranty information, survey results, retail sales input, finance records, and more.
Companies can use their database in many ways. They can use a database to identify prospects and generate sales leads by advertising products or offers. Companies can use database to deepen customer loyalty- they can build customers interest and enthusiasm by remembering buyer preferences and sending appropriate information, gifts, or other materials. Or they can use the database to profile customers based on the previous purchasing and to decide if customers should receive particular offers or not (Kotler and Gary 463).
Going now to the forms of direct marketing, the major of them -as shown below- include personal selling, telephone marketing, direct mail marketing, catalog marketing, direct response television marketing, kiosk marketing, and online marketing. As we see this area of direct marketing is vast. Furthermore, we will concentrate on direct mail marketing and we will also describe the three types of direct mail (e-mail, fax mail, voice mail).
3. Direct mail
Direct mail is a way of advertising in which advertisers mail printed ads letters or other solicitations to large groups of consumers. Bulk-mail rates used to lower the cost of mailing, and targeted mailing lists used to maximize potential response. Over the years, direct mail also became known by another name: junk mail. However, direct mail has entered the world of internet, and many of the same techniques are showing up electronically in email. Some advertisers now send emails with ads to large groups of consumers. (What is direct mail?)
Direct mail is used in many different situations, limited primarily by the imagination of the advertiser. Stores typically use direct mail to advertise new products or to distribute coupons. Charities typically use it to raise money or recruit volunteers. Almost any sales pitch can be made by direct mail. To create a direct mail mailing, advertisers will work to create an ad that will appeal to a substantial number of people. They will send it to large group of people, depending on the potential audience of the ad. That could be a zip code, particular demographic or entire nation. (What is direct mail?)
In today’s increasingly competitive environment, direct mail is the best way to reach your audience and speak to them, one to one. Only direct mail gives you flexibility, target ability, measurability, accountability and privacy. Flexibility because you can mail anyone your message, at any time, using a variety of formats. You can send postcards, letters and other things. Target ability because you can choose precisely the audience you want to reach to speak to them. Measurability is another characteristic, simply because there is no guesswork. By tracking and analyzing your mailings, you will know the response rate. Accountability because when you see how well direct mail works, it becomes a proven justification. Finally privacy because not only can you reach customers without your competition’s knowledge, but you can also allow your customers to see your message, without distraction. (Benefits of direct mail)
Nevertheless, direct mail has many disadvantages. Firstly, many people do not like unsolicited offers and many are skeptical of their validity. Secondly, busy people do not even open what the view as “junk mail”. Thirdly, using this method of advertising requires through maintenance of mail lists. Many advertisers do not like to bother with updating mail lists. With outdated lists, however, mail goes to undeliverable addresses and wastes your money. Finally some groups are concerned about the environmental impact of resources used the advertising mailings. (Direct mail as advertising)
However, direct mail has a specific audience where they can use it through email, post and other ways. They can send you through email to you and some members of a society that you are a part of an idea, to see how works a product and if you like, it you can buy it. Nevertheless, they can send you so emails from some products they want you to see through a week. Post-office and email they have some differences. Through the post-office companies, they decide to send you some details of a product that it is in Greek market and if you want, you can buy it. But they can send one or two post mail per month if you do not have email because email is faster this period.
Direct mail has also differences with other types of advertisement. The other types of advertisement are the newspapers, the magazines, the public advertisement, the TV advertisement, the radio and the cinema. Firstly, the newspapers and the magazines have two different types of audience public and specific. The public audience they read different newspapers and magazines every week because they do not like something specific and the information they want is for general interest. However, the specific audience read every week specific magazines and newspapers because they informed for specific news in the world.
Secondly, we have public advertisement. The companies they decide when they create a new product that the people must learn some information’s for this product. So they stick up bills at the road, outside of some buses, at the bus stops and the walls. When someone will interest for this product he/she, call the company and he/she learn more information’s.
Thirdly, we have TV advertisement and it has two different types of audience public and specific. The public audience they see general advertisements every day and general news reports at the news agency. The specific audience sees specific programs every day at the TV and specific news reports because they want to learn specific things.
4. Implementation of Direct mail
Brief
Analysis of the advertisement
Marketing goals
Advertising goals
Advertisement budget
Advertisement creation
Media plan
Effectiveness Quality pretest
Execution schedule
Responsiveness measurement
Creating an advertisement campaign, we have first off all to list and analyze ten basic steps of accomplishing the project.
These steps by order of production are the brief, the analyzation of the advertisement, marketing goals, advertising goals, advertisement creation, advertisement budget, media plan, effectiveness quality pretest, execution schedule and finally responsiveness measurement. (Διαφήμιση)
Focusing on direct mail advertising, we are only take under consideration the aspects involved on electronic (email) and printed (post) direct mail.
1. Brief
Starting with the first thing that an advertising company has to do, the brief, there are several things that have to be determined, such as small historical analysis of the company the wants to de advertised (for example status and recognizability), characteristics of the specific product to be advertised (brand, type of good, packaging, competitive advantage) characteristics of the market (segmentation and targeting), characteristics of the consumers (basically what take under consideration on given circumstances) , and characteristics of the competitors (like inner and outer competitors, market shares and behavior among them).
As we see the whole advertising project is based on the above information, which finally suggests the marketers how the advertisement has to be. (Διαφήμιση)
2. Advertisement analyzation
The second step is the analyzation of the advertisement, using the information of the Brief. In this stage, the creative department decides how to give the customer the information of the advertisement, which parts to highlight, and how to attract the customer. Generally the writers try to be impressive but avoiding to use technical language or too much of enthusiasm because turns to have the opposite results from the expected. That is why the language is the most of the cases is firm but easy understandable, friendly and yet formal, so even a person without technical knowledge for example will fill easy and can also understand what is supposed to understand. Some techniques usually applied are the frames around the page, the different color of the key points, that make people take the main idea at a glance, and the pictures which some times have metaphoric meaning. (Language of advertisement, Διαφήμιση)
Also another technique used, is the association of emotions, status, and mood with specific colors. For example pink reflects sensitiveness, red shows passion, white innocence and blue royalty. Marketers know how psychological factors react with decision-making and are very keen on connecting emotional customers and products. (Language of advertisement)
The last technique is the positioning of the images, ideas and information on the layout. Psychologists confirmed what marketers knew from experience. The idea of a new product presentation is presented by a cross: left=before, right=after, up=ideal, down=real. In that way marketers highlight the differences and make customers or possible customers get it subconscious. (Language of advertisement)
3. Marketing goals
The marketing targets specify what are the advertised company’s goals, why makes the campaign. The purpose is to promote company’s name, strengthen the loyalty of the customers, create excitement and find new customers. In almost every case, the strategic goal is the raise of the sells and respectively the profits. Going further, marketing targets are specified to a percentage to be reached at every product or service that is being sold. Each one of them has to have a measure and to be compared to the target at every predefined period, in order to be evaluated. (Διαφήμιση)
4. Advertising goals
The advertising targets of direct mail usually are divided in two categories, the customers (no mater if they are regular, drop-ins or lost) and the non-customers (those how had never been customers of the advertised company). For the customers, direct mail tries to strengthen the loyalty by making a friendly atmosphere and also building the trust between the company and the customer. On the other hand, for the non-customers the campaign has the role of attracting them. That could work with offerings and differentiated products, but also just with the promotion with the company, as there may be customers that simply don’t know about the company. For those who already know about the company and prefer a competitor, the campaign has the same strategy with the lost customers, the strengthening of the image of the company, especially if has no differentiated products. (Διαφήμιση, Tools and resources for direct mail)
5. Advertisement Budget
The budgeting of the direct mail promotion, includes firstly the buying, building or even renting a mailing list, also the designing and the creation of the mails, in case of emails, the provider and the computers and in case of posting, the papers, ink envelops and postage fees. (Διαφήμιση)
6. Creation of the advertisement
For the creation of the advertisement, the company first of all needs a creative department, which will collect all the necessary information and extra elements needed, to combine and structure them in a way that will be more attractive and more clear to the reader. Of course the creative department has to know all the decisions made by the previous steps in order to produce the final project or some alternatives for the campaign.
The role of the creating department of an advertising company is very important as is nearest to the customer. That means that the text, the images, and the over all style and tone of the project must be the best possible. The purpose after all is to grab the attention, gain interest, create desire and finally ask for order. (Διαφήμιση A, The Seven Vital Steps)
Other necessities for that step except the well-trained human recourses are technical instruments like computers with publishing software, printers, and in case of post direct mail, the company needs letter papers and envelops. (Διαφήμιση)
7. Media Plan
Media plan is the advertising schedule. It specifies when and to whom the direct mail will be sent, which direct mail is addressed to specific customer, and which customers will be informed first, or by what means (electronic, or by postage).
Media plan is very important for the advertised company, as it is the tool that brinks the customers at the expected time. For example the company may have different offers on summer and winter, so the direct mail has to be sent some time before the specific seasons, making customers exited by the offers and so buy the products. (Διαφήμιση)
8. Effectiveness Quality Pretest
In this stage, the advertisement is about to be evaluated by experienced personnel of the advertising company and some selected customers and non-customers, as convincing, attractive or indifferent, collecting also ideas of how it would be better in appearance, or more legible. We see that this is also important, as some times the ideas of how to impress may be different between the advertiser and the public. (Διαφήμιση)
9. Project Execution Schedule
This part has to do with the organization and the timing of each part of the project in order to be on time. The schedule is made by the CEO, usually after the meeting of all managers, discussing the recourses, the budget and main idea of the advertisement. To schedule at the most of the cases is strict so to compete with the competitors’ marketing moves, so it is critical for all groups to follow it, avoiding the slow down of the next stages and finally the publication. (Διαφήμιση)
10. Responsiveness Measurement
Direct mail is one of the easiest advertisement types in measuring the effectiveness that have to the public. The advertised company knows not only the exact number of the mails, but also the name of the recipient of the mail. From the first day of the publication of the mail, postage or electronic, the company starts the comparison of the mailing list and the calls that receives, and especially focuses to those that give an order. So every time, the company knows how much responsiveness the campaign has, and what customers prefer at specific time periods. (Διαφήμιση)
5. Conclusion
As we see, direct mail is the straightest way of communication between a company and its customer. It is the only way that the consumer is being addressed by his / her name making the relationship more true, and this is the deeper meaning of using direct mail. Consumer sees that the company knows him / her and that somehow is important to the company. The trust then to the company raises and the relationship between them becomes long lasting and in a more friendly way, making both the company and the consumer benefit, because when a company gains a customer, works harder in order to keep it.
Another reason of using direct mail is that has the ability to be targeted to specific customers, covering specific needs at a given time. That can give the company the advantage of competing a product before other companies as is focused to it, when the others try to cover a variety of needs, which slow them down. And that is why in the implementation process of the direct mail is crucial to complete every stage, however minor can seem, because is what the whole campaign wants to achieve.
In a final retrospect, direct mail is the hardest way of advertisement, and in proportion to the targeted market also the most expensive. In addition to that, in order a direct mail campaign to be successful, has to involve the work of psychologists, sociologists and art-designers, most of which are not needed to other kind of advertisements, just because are not so direct to the customer. On the other hand direct mail is the most attractive to customers and the most successful. A company has to balance its efforts with its goals and make the most willing choice. In my opinion, direct mail should be in the first positions.
Works Cited:
Ad Age Data Place. 4 Nov. 2005
Alicia Orr Suman, “ Ideas you can take to the Bank! 10 Big Things All Direct Marketers should be doing Now,” Target Marketing, Feb. 2003.
Allan J. Katz, “The Seven Vital Steps You Must Know To Ensure Direct Mail Success”
“Benefits of Direct mail” 10 November 2005
Γιώργος Χ. Ζώτος “Διαφήμιση, Σχεδιασμός και λειτουργία στα πλαίσια της επιχείρησης” University Studio Press, 1992.
Clow, Bacck. Integrated Advertising, Promotion, & Marketing Communications. Upper saddle River, NJ: Prentice Hall,2002.
“Economic Impact: US Direct and Interactive Marketing Today.” 6 Nov. 2005
Infoscouts “ Direct Marketing”
Kotler, & Gary. Marketing, An Intorduction.
Upper Saddle River, NJ: Prentice Hall,2005.
“Language of advertisement”, 5 Nov. 2005
< http://www.stanford.edu/class/linguist34/>
Roberts, & Berger. Direct Marketing Management.
Prentice Hall International Edition.
“Small business notes: Direct mail as an advertising medium” 4 November 2005
“Tools and resources for direct mail”, 5 Nov. 2005
“What is Direct mail?” 11 November 2005
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου