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Simple Direct Marketing Tips

Saturday, January 30, 2010   By Mike Reddy

 

Direct marketing is very much oriented towards immediate response. Direct marketers can tell you very quickly how successful (or unsuccessful) their promotion is, because they have the responses to prove it. So what is the most compelling tool that direct marketers use in order to gain that response? It’s the offer.

In general, direct marketing encourages people to respond to offers - such as, “Buy a dozen bottles of premium wine this weekend, and receive a free bottle of bubbly at no extra charge.”  It is the offer (not necessarily a bribe) that has the power to overcome ‘prospect apathy’.

To have an impact you must cleverly target the offer to appeal to the intended audience. It’s not much use offering a free trial of a newly launched lawn mower to people who live in high-rise apartments. You must design the offer in such a way that it creates interest.



Essentially, there are four fundamental elements in direct marketing:
  • price
  • satisfaction
  • payment terms
  • incentives
One or more of these four elements feature in some way in all offers. Here are examples of offers that direct marketers have found to be the most effective over the years:

Free trial offer: In many categories this is probably the best of all offers and in direct mail it is virtually essential. The length of the trial can vary, with thirty days being the most common.

Payment offer: Offers such as “bill me later” and interest free credit are both very powerful concepts that regularly increase response substantially – which is why they are used so often.

Limited time offer: Setting a time limit often “forces” potential customers to make a decision and it adds urgency to an offer. Care needs to be taken in choosing the period, since too short a time frame can give prospects a feeling of being hassled, while too long a period leads to inaction and lack of response.

Free gift offer: People love getting something for nothing. Free gifts can be most effective when used sparingly in short, sharp bursts.

Competition and prize draw offers: These offers give the chance of winning a prize, add excitement and can certainly motivate consumers. However, keep in mind there may be legislation you have to adhere to and it is wise to check with your legal advisor before proceeding.

Discount offer: Discounts are popular and are most effective where the value of a product or service is well known. Discounts are better expressed in money terms rather than a percentage, i.e. 'save $50' is better than '25 percent off'. However, with discounting there is definitely a downside. Discounting eats into profits very directly and can adversely affect the image of a business. There is also the old adage, “live by price, die by price.” After all, your competitors can always discount further. Once you become known as a discounter, many customers will only buy from you when you offer discounts.
Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.