Direct marketing or DM is known to all. One only have to think of all the daily mailbox “pollution” which a consumer or secretary has to work through and it is understandable why direct marketing has acquired its negative image, it is a result of the promotional overkill of the professional marketing machines, which are active 24 hours a day in the global village.
With the help of data list brokers, credit card databases, loyalty programmes, subscriptions and all the memberships that can be thought of, the direct marketer knows where and how to find the customer personally.
Neither is a person free from the direct marketing hype and the screening of mail before it reaches the boss, is part of the job description of every secretary (in direct marketing lingo called the “gatekeeper”). In this respect, it is important to keep in mind that the secretary has become an all-important decision maker.
Creativity:
So, is there still a future for business-to-business direct marketing? Is there still a possibility to distinguish oneself amongst the 50- 100 addressed mailings a secretary has to go through, in order to present her personal selection of letter to her boss?
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The answer is yes, but it all depends on creativity and originality in bringing the proposal to the attention of the right decision makers.
Many Export Promotion Boards are using direct marketing mailings to approach prospective importers, but after such a mailing campaign they remain silent for the rest of the year because the budget has been spent.
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If these institutes had used the proper direct marketing testing technique in stimulating reactions from their prospects, their campaigns would have produced concrete results in a possible follow-up phase.
Creativity in designing a business-to-business direct marketing campaign is the main issue of this chapter. However, like every marketing tool, direct marketing also has some basic conditions that have to be kept in mind. Otherwise, there is a risk of investing the marketing funds in vain.
The basic rules:
In order to know exactly what is talked about, one should select some definitions beyond the common understanding that direct marketing is relationship marketing. Actually, in the world of direct marketing there is only one internationally acclaimed guru.
Bob Stone with his classic book Successful Direct Marketing Methods which has already appeared in its fifth edition Considered by many to the “bible” of direct marketing, this book is a complete, single source of information for the beginner and an up-to-date reference to the professional (ISBN 0-8442-3510-5).
Interactive:
Stone defines direct marketing as “an interactive system of marketing which uses one or more advertising media to affect a measurable response and/or transaction at any location”. It is interactive, so unlike other promotional communication, a person is not only sending a message, but also receiving one.
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Here the first golden rule is the whole direct marketing campaign should be aimed at inducing active response. By measuring and comparing the responses, one should improve the campaign continuously in order to increase the conversions (= actual orders). And that is the second golden rule!
In the case of business-to-business direct marketing, this testing sequence will reveal exactly which mailing concept did pass the secretarial filter and which did not, and for what reason. This must sound like music to the ears of every exporter, but it really is true, as long as he follows the do’s and don’ts of direct marketing.
Export – special type of direct marketing:
Where export is concerned, one is talking about the international business-to-business direct marketing. In his book, Stone defines this as “a special type of direct marketing in which the response to value-based contacts is made by an individual on behalf of company, institution or professional organisation”.
This includes the individual end users, buyers, influencers, resellers, and contacts for whom information is captured in a database for the purpose of sustaining a long-term relationship and supporting all channels of distribution.
Optimal mix:
This is the driving force and the foundation for successful business-to-business direct marketing. In his book, Stone defines this as a special type of direct marketing which results in the concurrent improvement of sales productivity and customer relationships.
To achieve these objectives, a person must strive for the optimal mix of value-based contacts in an integrated campaign of mail, phone (including Internet) and field sales. The economics of these contact strategies and the monitoring of customer relations create a process that must be tested continually.
This might be quite a mouthful, but it is a definition which embodies the three golden rules of direct marketing. The first two have already been mentioned, the third one is as follows:
The setting up and maintaining of a database containing potential, existing and past customers is the basic discipline of every B to B DM activity. (B to B -Business-to-Business; DM-Direct Marketing).
The three golden rules of direct marketing:
1. The whole DM campaign should be aimed at inducing active response, improving sales productivity.
2. A DM campaign should be a mandatory series of measurable tests on a long-term basis.
3. Setting up and maintaining a database of potential, existing and past customers is the basic discipline of every business-to-business DM activity.
As a conclusion, we can sum up the following features of business-to- business DM:
i. A super-ordinate focus on potential customers
ii. A personal character
iii. Undivided attention and empathy
iv. Full creative freedom within the framework of societal and business ethics
v. Testing probabilities
vi. Timing control
vii. Response inducement
viii. Measurability
The Cost Factors:
DM is an expensive marketing tool. An exporter should think about the (air) mailing costs of 1,000 large and heavy envelopes. For that reason, cost calculation should be made in order to check whether the expected costs per order are realistic. Of course, those initial costs should be in relation to the expected yield.
It is only when one manages to start working with a good curriculum that the total DM campaign costs will be earned back by the total conversions. In order to achieve this and to show that there are ways to rationalise the decision making, one should introduce some of the most used calculation formulae for budgeting purpose.