Direct marketing is a method of selling through direct communication between companies and customers.
It is attracting attention in BtoB as it has benefits such as interactive communication with customers, which makes it easy to measure effectiveness, high cost-effectiveness, and ease of implementing the PDCA cycle.
Here, we will introduce the meaning of direct marketing, the difference from the antonym of direct marketing, “mass marketing,” the advantages and disadvantages of direct marketing, and examples of its use in BtoB.
What does direct marketing mean?
Direct marketing is a method of selling through direct communication between companies and customers.
The Direct Marketing Association (DMA) defines it as “an interactive marketing system that uses one or more advertising media to generate measurable responses and transactions in any location.” I am.
Its origins are in the 19th century in America, called “mail order” (mail order).
Although it can be said that this method is generally familiar, in recent years, with the spread of e-commerce, it has been reconsidered as a broader concept.
Direct marketing is distinguished from its antonym, “mass marketing,” in that communication between companies and customers is two-way, and the effects can be measured.
This makes it easy to run the PDCA cycle and has the advantage of being highly cost-effective, so it has been adopted by many companies.
Direct marketing has not been actively adopted in BtoB businesses, where customers are organizations rather than individuals.
However, in recent years, as traditional sales methods that limit key personnel have become less effective due to changes in the market environment and values, direct marketing has begun to attract attention in BtoB as well.
Characteristics of direct marketing and the difference from its antonym “mass marketing”
Let’s take a look at the characteristics of direct marketing and how it differs from its antonym, ”
mass marketing
.”
The characteristics of direct marketing are
1. Communication is two-way
2. It is possible to measure the effectiveness
3. Use media flexibly
4. Ability to sell at any location
It can be summarized as
●Characteristic 1: Communication is bidirectional
The first characteristic of direct marketing is that communication is two-way “one-to-one communication.”
While mass marketing communications are aimed at the “general public” and are aimed at informing the company’s products, direct marketing communications are aimed at individuals and aimed at getting to know the target audience.
●Feature 2: Effects can be measured
Since communication in direct marketing is supposed to be interactive, it is possible to measure the effectiveness of measures based on responses.
A customer database that stores all responses becomes the basis for quickly responding to customer needs.
While the efficiency indicator for mass marketing is “reach efficiency (reach frequency),” the efficiency indicator for direct marketing is “response efficiency (CPR/CPO).”
●Characteristic 3: Use media flexibly
Direct marketing is characterized by the fact that there are no stores because there is no intermediary distributor involved.
Advertising and websites will act as stores, so media will be fully utilized to develop customers.
We use a variety of media, including television, newspapers, radio, catalogs, direct mail, and SNS, without being limited to a specific media.
●Characteristic 4: Ability to sell at any location
Conversely, direct marketing, which does not require a store, allows sales to be carried out in any location, such as the customer’s home, office, or on the train while commuting.
If it is possible to deliver products without being limited by region or commercial area, people living in any place can become customers.
Advantages and disadvantages of direct marketing
Let’s take a look at what the advantages and disadvantages of direct marketing are.
●Advantages of direct marketing
1. Cost-effective
Direct marketing is more cost-effective compared to mass marketing
. This is because by utilizing the customer database, it is possible to limit the use of advertising media that match the target.
2. Easy to run PDCA cycle
In direct marketing, it is easy to quantify the responses obtained.
To this end, it is characterized by the ease of running the PDCA cycle to verify effectiveness and consider improvement measures.
3. You can start a business without incurring labor costs
Direct marketing allows you to start a business without incurring labor costs since you do not have a storefront.
If a call center is required, outsourcing is also possible.
●Disadvantages of direct marketing
1. Return on investment may take time
When starting a business with direct marketing, initial investments are required for a website, database, payment methods, etc.
Also, when it comes to advertising, people with specialized knowledge and skills must conduct repeated tests to establish the expression.
As a result, it may take some time to obtain stable sales and recover your investment.
2. Advertising and methods need to change depending on the target
The goal of direct marketing is to maximize response from target customers.
Different target customers may require new and different advertising and techniques to be developed.
Examples of direct marketing BtoB use
Direct marketing is attracting attention and beginning to be used in BtoB as well.
In BtoB, the target is not individuals but companies. By incorporating direct marketing techniques, narrowing down your targets to companies with high prospects, and concentrating your resources, you can expect to improve the efficiency of your sales activities.
●BtoB usage example 1
In B2B, offers to leave contact information are important in sales activities.
One company added “how to pass a approval document” in addition to the usual materials as an offer to the person in charge. As a result, the rate of closing requests for materials has increased significantly.
●BtoB usage example 2
Teleappointments in BtoB are generally for the purpose of sales.
One company held a tele-appointment to offer materials.
As a result, we were able to efficiently collect a list of potential customers, which enabled us to reduce the number of teleappointment teams and increase the contract rate after teleappointments.
summary
◆ Direct marketing is a method of selling through direct communication between companies and customers.
◆ The difference from mass marketing, which is its antonym, is that communication is interactive and its effects can be measured.
◆ Direct marketing has advantages such as being highly cost-effective and making it easy to run the PDCA cycle.
◆ Due to changes in the market environment and values, BtoB is also beginning to introduce it.