In a tough economy when businesses are slashing budgets and wanting a clear ROI on every Rand spent, there’s nothing like direct marketing to validate your marketing investment.
10 Principles of Direct Marketing
The basic fundamental principles when planning your direct marketing campaigns.
A new customer is the most meaningful financial transaction you can make - instead of thinking of the profit you make on a single sale - think instead of the annual worth of a new customer to you.
When your thinking is restricted to the profit you make from a one-time sale there is insufficient encouragement for you to invest in the necessary campaign budget(s) to win new customers. When you think in terms of the continuing annual value of the new customer, you will have every encouragement to invest in winning more customers.
'Viewing customers individually - is the key to relationship marketing.'
Principle 1 - The right objective
- Set specific objectives for your short and long-term plans,
because if you don't, you have no yardstick with which to measure its
success or failure.
- Quantify your objectives.
- When your objectives are clear, every element in your campaign
or package should be designed to lead the prospect towards the very
action that you want him to take.
- The method you employ to achieve your objectives will depend on the nature of your product or service and the target market you want to reach.
Principle 2 - Your target market
- It is the most important ingredient in your campaign?
- Select your prospects with care, and select them with the same or similar
- profiles as your present customers.
- The closer you are to your profile and target market, the more successful you will be.
- It is better to send a poor package to a good prospect, than a good package to a poor prospect.
- "Don't sell to everybody; sell to somebody!" (Bodyshop).
Principle 3 - Your offer
- The fist step in planning an offer is to think about the objective of your campaign.
- What do you want your present/past/prospective customer to do?
- Buy your products, use your services, build traffic into your
stores, ask for a sales representative to call, enter a competition,
- Always ask yourself - what is the big benefit my customer will gain from using or even owning my product or service?
- The right offer will get you immediate and more results.
- Select the most attractive offer you can afford. Not all good offers are expensive.
Principle 4 - Your communication
- Every part or element of your communication package (personal
visit, phone call, letter, fax, E-mail, whatever') must look and feel
right to your customer.
- 'Dress it up.'
- Use the AIDA principle: Your message must gain the customer's Attention from the start. Involve him and arouse his interest. Develop that interest in to a strong Desire for ownership and usership and get the desired Action.
Principle 5 - Test/analyse and evaluate
- You will never know how successful you are going to be. The only way is to test and test continually.
- Develop a control strategy or package, test, improve, analyse, improve, test, analyse, etc.
- It is not the percentage response, which matters; it is the
conversion of responses into sales and the profit you generate from this
- Take time to ensure that you learn from all your experiences, good or bad.
- Jock Falkson from Effective Letters always said: 'Remember you cannot bank a response.'
- Analyse the right things - and analyse it against your objectives.
Principle 6 - Costs and Budgets
- Most, if not all, direct marketing activities are expensive and
can erode profits quickly unless kept under tight financial control.
- Very few companies know what their cost per customer is. If you don't, it is essential that you do so.
- You may find that you have lost money on your first sale. But
if you pursue it and go after your customers and try to maximise their
purchases you will win.
- It is the lifetime value of a customer that is important.
- The cost of servicing customers decreases over time.
- The cost of each and every contact should be budgeted for
(fixed and variable costs) in advance, so that you can tailor it to
maximise value for your rands invested.
- All customers should have a profit and loss account with you. What he has spent with you and what you have spent on him.
Principle 7 - Training of employees
- All your employees should be briefed on all your marketing and
advertising activities, in order that they understand why you are doing
it and what results you are expecting and what results you have
achieved. This is the only way that they will play their part to the
- Employees who is not adequately prepared or trained to support
your programme or handle your responses have ruined many successful
- Loyal employees are linked to loyal customers.
- Employee loyalty increases business profitability, competitiveness and market share.
Principle 8 - Co-ordination and communication
- Successful campaigns depend on proper planning, co-ordination and communication of all activities of all departments and divisions, which are likely to be involved in the process.
Principle 9 - Programming and planning
- Allow sufficient time for planning and execution. Plan ahead, but be flexible.
- Percy Barnevik - Chairman, ABB Asea Brown Boveri, Zurich, said at a conference on global competitiveness: "We don't need any more bright ideas. There are lots of them around. In business, success is 5% strategy, 95% execution."
- Take into consideration your company's policies, philosophies and activities.
- Take into consideration all your employees and your team.
- Do not forget your competitors.
- Analyse and evaluate your programmes.
- Remember that every mistake has a score and a cost.
Principle 10 - Frequency and priority
- How many times do you have to see the same person to get a
reaction, or how many times do you have to mail to a person to get a
- Nobody knows! What we do know is, that if you see 10 people and 1 reply, you have 9 uncommitted people.
- There are various reasons why they haven't responded -
circumstances, did not need your product or service now, your approach,
your package, etc.
- All we know is - contact them again, and again, and again!
- It is important to remember - if you have set clear objectives
and you have qualified these objectives in terms of numbers, you will
know when to contact them again.
- The longer you retain customers, the more profitable they become.
1. Set clear objectives and quantify them;
2. Define your primary and secondary target markets
3. Set your budgets (costs and expenses)
4. Allow sufficient time for planning and execution
5. Your modus operandi
6. Conclusions - evaluation and analysis.
The combination of all the above disciplines, ideas and involvement should result in a brighter approach to business, better sales, profits and the occasional failure.
Learn from all your experiences, good or bad.
You're in business today, for tomorrow!
- Take the short and the long-term into consideration:
- Your business is to satisfy customers;
- You must prefer to make a customer than to making a sale;
- You must cultivate your present customers
- You must re-activate your past customers
- You must reach our for new customers
- You must know what your natural means of communication is.
- All your efforts are a 50/50 combination of disciplined effort and creative fun.
Ogilvy Mather said: "When people aren't having any fun, they don't produce good work."
And what is it that we want to know in the end?
- that we have an ideal customer
- that we have made a sale or took an order
- that our customers are satisfied
- that we are building a long-term relationship with them
- that we are going to get repeat business and more
- that they will be strong referrals
- And we also want to know
- That we are satisfied and that our customers can trust us because strategic selling is a lifetime approach!
Dr Russell Conwell traveled all over the USA delivering the same speech over 6000 times. His speech was titled "Acres of Diamonds" and he said: "Diamonds are not in far-distant mountains or yonder seas, they are in your own backyard - if you but dig for them"
First published in 1995, the report is released every other year in conjunction with DMA’s Annual Conference and delivers historic trends, current year estimates, and one-year and five-year projections for direct marketing expenditures, sales, ROI and employment.
An online presence can take several forms and have any one of multiple objectives.
A Glimpse of the Future
Three years from now - or perhaps sooner - the direct marketing scene (the scene not the techniques) will be barely recognisable from that which we know and love today: the carefully delineated, agencies; the internecine warfare; the specialists and non- specialists; and so on, will all begin to disappear.
In the recent past, the position and relevance of direct marketing (DM); in the information age has been viewed as a 'dying' facet of the advertising industry. However, research and trends have proved that direct marketing will have an impact on the economic growth and lead the industry in one-to-one marketing.