Direct marketing gives an organisation access to the target market without any intermediaries. The customer is sold to inside their own home or office. And delivery follows, directly into the home or the office. This is ‘armchair shopping’ since customers do not have to go out, shop and traipse wearily home again. For example, pizza companies are among many who offer home sales and home delivery to facilitate today’s growing army of busy people. Even computers and computer peripherals are often bought and delivered through the post.
Some manufacturers do their own Direct Marketing so that they gain direct access to the market. Some intermediaries, such as retailers, do their own Direct Marketing through customer loyalty schemes and catalogues.
The purpose of Direct Marketing is to develop a database of customers and establish lifelong, personal relationships with them.
They are recruited through integrated communications such as mass media campaigns, with response mechanisms like coupons and free-phone numbers, as well as sales promotions, competition entry forms, guarantee forms, Internet Web site entry forms and neighbour-get-neighbour campaigns. Telesales and mail shots from lists of prospects are also used to boost direct sales and to gather names of customers for the database.
Other forms of Direct Marketing include door-to-door selling, direct response TV, TV shopping channels, the Internet, and CD catalogues.
Direct Marketing gives access to end customers directly, but it does require resources or at least partners with resources. For example, sophisticated databases and expert logistical systems are required if dealing with thousands or sometimes millions of customers. Getting the right goods to the right customer on time in good condition requires expertise. Many organisations subcontract the physical distribution aspect out to ‘fulfilment houses’ who specialise in the logistics of stock holding, order processing, packing, despatch and invoicing.
Direct Marketing can cause some channel conflict particularly when, say, a manufacturer is seen to reach over the shoulder of the middle man and offer goods directly to the end customer.
Although multiple channels, or multi-channels, give a supplier more distribution options and probably better distribution penetration, it needs to be handled sensitively since it can upset distributors who see direct marketing competing with them for their own customers.
Having said that, direct marketing can deliver more than increased sales, and improved distribution penetration: it can deliver a database of customers, their profiles, buying behaviour and more. This is a valuable asset which is not shown on most balance sheets but nevertheless it can have an immense impact on distribution, sales and profits in the short, medium and long term.