What Is Direct Marketing? Types, Benefits, and Metrics

Direct marketing helps you target the right audience and get measurable results. But what is direct marketing, and how can you best use it?

This in-depth guide covers all you need to know about direct marketing, from its history and how it works to its different types and benefits. We also shed light on a few case studies to help put things into perspective.

Learn how to create a successful direct marketing campaign to reach a specific audience and improve your results today.

Direct Marketing Definition

What is direct marketing? Direct marketing is a form of advertising where businesses communicate directly with their target audience without intermediaries.

This means businesses can send marketing messages directly to their potential or existing customers through a variety of channels such as email, text messages, social media, telemarketing, and direct mail, among others.

The goal of effective direct marketing campaigns is to create an immediate response or conversion from the recipient, which could be in the form of making a purchase, subscribing to a newsletter, or booking an appointment.

Compared to traditional (indirect) marketing campaigns, which rely on third parties such as media publications to deliver their message, direct marketing allows you to leverage the power of social media, email, and mobile marketing to make your sales pitch.

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History of Direct Marketing

Direct response marketing has been around for many years. Let’s take a quick look at the history of direct marketing, from its inception to its digitalization.

Early Beginnings

The concept of direct marketing, which entails reaching out to consumers directly, has been in practice since the 15th century. The Italian printer and humanist Aldus Pius Manutius was one of the first to use this strategy, as he used print catalogs of his books. 

The idea of printing catalogs was later spread to colonial America. The first to adopt this strategy in British America is believed to be Benjamin Franklin, as he used to print catalogs of his academic and scientific books in the early 1740s.

It wasn’t until the 19th century that the concept of direct marketing was popularized. This was due to the rapid improvement in transportation systems and postal services.

With these improvements came strategies such as door-to-door sales, catalog mailing, and direct mail campaigns.

Aaron Montgomery Ward, a prominent retailer in 19th-century America, believed that selling products directly to customers at appealing prices could promote customer loyalty and revolutionize the market industry.

Evidently, he was on to something. The term “direct marketing” was coined and defined in 1967 by Lester Wunderman, who is believed to be the father of contemporary direct marketing.

Shift Towards Digitalization

Around the 2000s, the marketing landscape started to shift toward digitalization, and direct marketing started to become more sophisticated and effective than it ever was, especially with the emergence of email and mobile marketing.

Compared to traditional means of marketing, direct digital marketing offered and continues to offer quicker and more detailed insights, better options for personalization, and vast testing potential. This is why a lot of marketers and advertising agencies are investing more in the digital realm of marketing.

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Benefits of Direct Marketing

Here’s a list of some of the key benefits of a direct marketing strategy:

• High Targeting and Segmentation: Direct marketing enables you to reach different segments of your target audience with highly personalized sales pitches. This high level of segmentation and targeting can be viewed as a catalyst for conversion.
• Measurable Results: With direct marketing, you can easily measure the performance and success of your campaigns, especially if your marketing message involves completing a particular action, such as using a specific voucher.
• Cost-Effective Marketing: Most direct marketing channels are notably more cost-effective than traditional marketing tactics.
• Immediate Feedback: Direct contact with consumers enables you to tweak your loyalty strategies, customize your promotions, and make informed marketing decisions based on the direct response and feedback you receive.
• Highly Informative: If you’re looking to share detailed information about a product or service that you have to offer, direct marketing is your best bet, as it enables you to tailor-fit your message based on the consumer rather than rely on mass messaging.

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Types of Direct Marketing

Direct marketing comes in many different types, with some being more common than others. Here are six of the most common types of direct marketing campaigns:

Direct Mail

This type of direct response marketing is the digital equivalent of email marketing, and it often comes in the form of brochures, letters, postcards, and flyers. Companies use it to spread the word about their products, services, and special offers.

Direct mail marketing is one of the most flexible forms of direct marketing, as it can easily be personalized to suit specific consumer segments.

When done properly, direct mail can complement other direct marketing channels and improve customer relationships.

Telemarketing

Telemarketing is when a company contacts clients directly over the phone to share information about its products or services.

This one-client-at-a-time approach helps establish a personal relationship between companies and consumers.

For best telemarketing results, be sure to clearly define your goals, record your calls and learn from them, take notes during calls, and conduct a lot of research on your personas.

Mobile Marketing

There are several types of digital direct marketing that fall under the category of mobile marketing. Two notable examples are text message marketing and push notification marketing.

Text message marketing is when you use SMS to send your marketing message to potential consumers.

You’re probably saying, “Is SMS still a thing?” The answer is a resounding yes! In fact, SMS boasts open rates that are as high as 98%. That’s not to mention how affordable it is.

Push notification marketing, on the other hand, is when potential consumers receive opt-in alerts from a company’s website or application. Said alerts appear as pop-ups that display both text and rich media (e.g., buttons and images).

Email Marketing

As the name suggests, email marketing is when a company reaches out to potential consumers via email. It’s one of the most profitable direct marketing strategies.

It can take time to build a solid email list. If you want to hit the ground running, consider purchasing a list of verified consumer emails through email list services such as MailChimp, GetResponse, MailerLite, and Brevo (formerly Sendinblue).

If you want to make your email campaigns as compelling as possible, be sure to:

• Personalize your email subject line.
• Keep your emails conversational.
• Create follow-up emails to nurture subscribers.
• Run A/B tests on your emails.
• Adhere to email and spam regulations.

Social Media Marketing

Social media marketing is a popular form of direct marketing that relies on social media platforms for connecting with consumers.

You can use social media marketing to build your brand, promote your offers, and interact with your target audience.

To use social media marketing effectively, it’s important to identify your audience, pinpoint the platforms they use, and learn about the type of marketing they find appealing. It’s also important to focus on providing value if you wish to boost your organic growth.

Guerilla Marketing

Guerilla marketing refers to the use of surprises and unconventional interactions to promote a product or service. This type of direct marketing often comes in the form of personal interactions and viral social media messaging.

Guerilla marketing tactics are viewed as daring and interesting, which is why a lot of consumers find them appealing. That being said, some people find guerilla marketing disruptive, so be sure to use it responsibly.

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Metrics to Measure Direct Marketing Success

When trying to gauge the performance of your direct marketing efforts, make sure to keep an eye on the following metrics:

Response Rate

The response rate of your direct marketing campaign is the number of people that have responded to your message. For instance, if you’re using direct mail, the response rate would be the number of people that have responded to your mail.

To calculate your response rate, simply divide the number of responses by the number of sends.

• Response Rate = Number of Responses / Number of Sends

Here are a few tips to improve your response rate:

• Define your target audience to understand who your message is for.
• Personalize your direct mail to individual customers or segments.
• Utilize advanced targeting tactics like location and demographic targeting.
• Write an engaging copy with a compelling call to action (CTA).

Conversion Rate

Your campaign’s conversion rate refers to the number of prospects that have become paying customers or capitalized on your offer. This metric is especially important to keep track of if you’re running a business that has longer sale cycles.

To calculate your campaign’s conversion rate, divide the number of prospects generated by the number of responses.

• Conversion Rate = Number of Generated Prospects / Number of Responses

Here are some helpful tips to boost your conversions:

• Make your calls to action as visible as possible.
• Display social proof to establish trust.
• Regularly run A/B tests on your campaigns.

Return on Investment (ROI)

The return on investment is a profitability metric that evaluates the overall efficiency of your investment, which, in this case, is your direct marketing campaign. Essentially, this metric tells you how much money you’ve made or lost on your campaign.

To calculate your campaign’s ROI, divide the profit earned on your investment by the cost of the investment.

• Return on Investment = (Revenue – Cost of Campaign) / Cost of Campaign

To improve your direct marketing ROI, be sure to:

• Establish your marketing ROI goals.
• Provide high-value content.
• Leverage marketing automation tools.
• Identify areas for improvement.

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Ethical Considerations and Regulations

Direct marketing can sometimes be viewed as intrusive or unwanted, which is why it’s important to learn about your target audience’s privacy concerns before attempting to initiate direct contact.

You must also take into account that there are acts and regulations that you must adhere to when utilizing direct marketing strategies. Otherwise, you run the risk of legal issues.

Such acts and regulations include:

• General Data Protection Regulation (GDPR)
• Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM)
• Telephone Consumer Protection Act (TCPA)

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Direct Marketing Examples

Here are a few direct marketing examples that’ll help put things into perspective:

Dollar Shave Club

With just a single, hilarious video, Dollar Shave Club launched itself into the direct-to-consumer razor subscription game, taking over the market by a storm. The video announced itself as a ‘razor company that delivers bullsh*t-free shaves,’ which not only caught people’s attention but also tackled a common problem most people face with purchasing razors in stores.

Dollar Shave Club provided people with a more affordable and convenient option for shaving, all while keeping people entertained. This viral campaign reached over 4 million people in just the first four months of its release.

Casper

Casper is known for changing the way people shop for mattresses through their online store. An integral part of their strategy is still their direct mail marketing campaigns. They made use of a personalized brochure to explain to people the benefits of their mattresses and how it can be customized for their sleep needs.

The brochure also included a sample of the foam their mattresses are made with, making the experience more tactile and unforgettable. What’s even more impressive is their use of data; by tracking customer behavior online, they were able to understand their customer’s browsing habits; this data was then integrated into their direct mail campaign that targeted those same customers. The marketing campaign resulted in an increase in year-over-year sales.

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Final Thoughts

Direct marketing relies on direct communication between a company and consumers. It’s not reliant on third parties such as media publications. Now that we’ve answered the question, “What is direct marketing?” you should have a good idea of how to create your own successful strategy.

Direct marketing offers many benefits, from enabling you to customize and personalize your messages to establishing long-term relationships with consumers and improving customer satisfaction.