Power Direct Marketing: The Book
When Is Direct Response Best?
Jim Kobs introduced this concept to me. There are at least eight situations when direct response is most likely to work. And can be the best discipline to achieve your specific goal.
When you can clearly IDENTIFY your target audience
There are tens of thousands of mailing lists available. There are hundreds, literally thousands of magazines and newspapers. And hundreds of radio and television stations. Plus, more telephones in North America than any other place on earth.
So, it is highly likely you will be able to clearly target your audience. Specifically identify those characteristics against those people and/or companies you wish to reach.
If you can do this, then direct response is an excellent tool.
When you can REACH your target audience!
It does no good to be able to ID your audience on paper but not reach them. It is easy to talk about people who have two jobsbut is there such a list? Or is there a publication which reaches that group?
What about people who work out of their homes? Lots do, and you can certainly talk about it. But can you reach them?
Lets talk about both identifying and reaching your audience. Most of us would agree that its not too difficult to identify who we want to talk to. But, sometimes it is difficult to reach them.
One "live" example that happened to me involved a major telephone company. They had a product they felt would be of interest to people who "moonlighted," i.e., worked two jobsprobably one full time and one part time.
One group which fits this description are real estate agents. They are fairly easy to reach. Most of them have to be licensed, and that information is usually public domain. Reaching real estate agents on behalf of this particular program was not difficult.
The other audience was taxi cab drivers. Many drivers drive nights and do another job during the day, or the reverse.
However, have you ever heard of a list of taxi cab drivers? Even though they are licensed, we could find no public list of taxi cab drivers. Although most of them work for companies or were part of a cooperative, their names were not available.
Further, we could not find a publication we might use to reach themsuch as Taxi Cab Journal or Taxi Cab News. The short and long of the whole thing is, there was no direct way to reach taxi cab drivers.
What we did was take out ads in newspapers. Have you ever seen a taxi cab driver without a newspaper? Of course not. When they line up they always have a newspaper. We thought it might work. It didnt! The newspaper was too broad a medium to be effective or efficient.
This is a good example why you must be able to not only clearly identify your marketplace (we could clearly identify taxi cab drivers), but also be able to reach them (as we could easily do with the real estate agents).
When you have A LOT TO SAY about your product or service
This also applies if your offering is expensive, unique, special, unusual, different, new. Many times a page in a magazine or 60 seconds of broadcast wont cut it.
You need more space and/or more time.
Direct response, making good use of direct mail and the telephone particularly, may allow you to tell your whole story. This is also possible with large space newspaper advertisementssometimes.
When your product/service has continuity, REPEAT SALES, and/or follow-up and follow-on sales
If you want to build a data base of buyers, or need to in order to justify your promotional program, then direct response is the way to go.
Most successful businesses where direct marketing plays a role are built on repeat sales. Business and consumer. Sometimes you "buy" that initial sale, even at a loss, in order to gain a customer who, over time, will return a profit.
An example of industries where repeat sales play a major role are companies which provide consumables, supplies, anything that gets used up. Such as office supplies, computer supplies, medical supplies.
Hewlett Packard is a good story. Their direct marketing division in Northern California is an enormously successful operation. Doing nothing but supplying supplies, peripherals, add-ons, low end software, and similar items to their own installed base of Hewlett Packard users.
You, every time you pick up a pencil or write on a yellow tablet, are using a consumable. That has to be replaced. Direct response is an excellent way to sell products that fit this general description.
When you need to CONTROL the entire selling message or process
If you use any independent distribution system or network where the sales force (inside or outside) is not under your control, direct response can help. Wholesale/retail/mail order, business and consumer, are all excellent examples.
Selling through an independent network can be a challenge. All you can do is present your product and the offer and hope the dealers and distributors get excited.
Hallmark Cards, Avery Label, Moore Business Forms, and many other companies use direct response marketing techniques to service and sell their dealer and distributor networks around North Americaand for that matter, around the world.
Digital Equipment, IBM, and scores of other companies use direct response to sell direct to their customer base, with a catalog and both an inbound 800 number and an outbound telemarketing program. The entire mail-order industry operates on the philosophy of controlling the selling message and process.
A company named DEN-MAT, a dental supply firm headquartered in Santa Maria, California, services dentists on three continents with a catalog and an international toll-free telephone number.
When your message must reach a specific audience and drive that person to a place (trade show or storefront), a telephone, or the mail box (with your order form, coupon, or reply card), direct response can work.
When you want to build a predictable MODEL that can be repeated
You are introducing a new product or service. Or changing a position or image of a current product. And you need a model you know can be repeated to achieve present sales objectives.
When Foodmaker, owner of Jack-in-the-Box and other restaurant chains, introduces a new product they build a marketing model.
First, they select a small, representative group of stores. Next they do a controlled mailinga coupon offerto their prospective customer base around those locations, introducing the new product with the special offer. And then they measure what happens.
From the results they have a predictable model that they use as a standard when rolling out the new product in all locations.
This same process is also done with outside dealer, distributor, independent sales rep networks. The home office develops the program, tests it, and then takes it to the field.
Direct response marketing is ideal under these conditions because it is:
Companies as diverse as MicroAge Computer Stores, Safeco Insurance, Weinerschnitzel, and Pascoe Steel all developed model programs this way.
When your product/service DOESNT FIT other distribution channelssell direct
It isnt glamorous, it is too complicated, it doesnt sell itself, it needs lengthy explanation, it is too low priced to be interesting to other channels.
So, you sell it direct!
An example of a product line that doesnt fit other distribution channels is low-end software. Software that costs less than $100. The hundreds of computer stores who might carry a specific software package have literally thousands of software packages to select from. And because there are so many, they cant possibly carry them all. How do they select?
Well, its really rather easy. They select those that are going to be the hot sellers . . . that are relatively easy to explain . . . and where they can make the most money. Most software costing less than $100, even though it may be easy to explain, does not offer much profit potential. A perfect product line for direct response.
A company named Channelmark has taken advantage of this opportunity. They prepare their POWER UP! catalog and mail it several times a year to a targeted audience which is identifiable and reachable. They have built a business that does in excess of a million dollars a month in software packages that cost less than $100! Quite a story.
When you want LESS VISIBILITY in the marketplace an excellent testing discipline
You dont want to be seen nationally (or even regionally) yet; you are in a test situation. New market/product introduction. New Standard Industrial Classification (SIC) code. New geography. Anything different, when you want to test first and then roll.
Example: The offer is an important part of the success of any direct response marketing program. And price is part of your offer. Cassette Productions Unlimited tested price when they introduced their new cassette albums, Think and Grow Rich, by Napoleon Hill.
Through direct mail they price tested $89.95 and $129.95. To determine, before they rolled out to a large marketplace through print and broadcast, what price would gain them the most new customers.
Their business was expanding in mail orderthey wanted a large, new customer base. Profits were importantbut new customers were most important if they were to grow their mail-order business. For these and several other reasons, Cassette Productions Unlimited selected the $89.95 price. This test helped them decide the direction to take.
Direct response allows you to pinpoint specific markets/audiences in exact locations with special offersand then gives you the measurability to take the next step.
by ROCKINGHAM*JUTKINS*marketing, all rights reserved.