What is Direct Marketing?
Direct marketing is a channel free approach to distribution and/or marketing communications. So a company may have a strategy of dealing with its customers 'directly,' for example banks (such as CityBank) or computer manufacturers (such as Dell). There are no channel intermediaries i.e. distributors, retailers or wholesalers. Therefore - 'direct' in the sense that the deal is done directly between the manufacturer and the customer.
As mentioned above, 'direct' also in the sense that marketing communications are targeted at consumers by the manufacturers. For example, a brand that uses channels of distribution would target marketing communications at wholesalers/distributors, retailers, and consumers, or a blend of all three. On the other hand, a direct marketing company could focus upon communicating directly with its customers. Direct marketing and direct mail are often confused - although direct mail is a direct marketing tool.
There are a number of direct marketing media other than direct mail. These include (and are by no means limited to):
- Inserts in newspapers and magazines.
- Customer care lines.
- Door drops.
- TV and radio adverts with free phone numbers or per-minute-charging.
- ...and finally - and most importantly - The Internet and New Media.
The Internet and New Media (e.g. mobile phones or PDA's) are perfect for direct marketing. Consumers have never had so many sources of supply, and suppliers have never had access to so many markets. There is even room for niche marketers - for example Scottish salmon could ordered online, packed and chilled, and sent to customers in any part of the world by courier.
Many companies use direct marketing, and a current example of its use, as part of a business model, is the way in which it is used by low-cost airlines. There is no intermediary or agent, customers book tickets directly with the airlines over The Internet. Airlines capture data that can be used for marketing research or a loyalty scheme. Information can be processed quickly, and then categorised into complex relational databases.
Then, for example, special offers or new flights destinations can be communicated directly to customers using e-mail campaigns. Data is not only collected on markets and segments, but also on individuals and their individual buyer behaviour. Companies such as Amazon are wholesalers of books (i.e. they do not write or publish them) - so they use Customer Relationship Management and marketing communications targeted directly at individual customers - which is another, slightly different example of direct marketing.