Posts Tagged ‘disadvantages of direct marketing’

Feedback from Newsletter

Friday, April 8th, 2011

A couple of weeks ago FiG launched our e-mail newsletter and we received some really valuable feedback!  Thank you everyone, for sharing your opinions about marketing and helping FiG better understand what information is important to you.  As most of the feedback suggested, FiG will share more case studies in the future, glad you liked what you saw.  Also today FiG will answer 3 main questions raised from our audience:

  1. What is the primary purpose of marketing activities?
  2. Why study and research consumer opinion about my brand/product/service?
  3. Is there any disadvantage to using direct marketing only?

Primary Purpose of Marketing: Although each marketing activity should address a specific problem or to achieve an identified goal, their primary purpose is generating sales by attracting new customers, or increasing individual sales volume.  In other words, marketers have to be able to tie every marketing activity back to a specific financial goal and measure how those efforts helped attain that goal, otherwise it will be simply a cost to a company.

Reasons for Researching Consumer Opinion: As one of our readers mentioned, many small business owners don’t care or don’t know why they should care about how customers recognize and respond to their brand(s)/products/services.  Let’s look at why this is important.  Brand only exists in consumers’ mind and heart.  Let me give you a real world example.  When Justin’s Nut Butter first came out in a 1.15-oz. squeeze pack, the owner planned to target and attract active sportspeople.  You can easily tell their initial positioning from a Youtube video.  But several months later, after a consumer sales study, the company found most of the products were purchased by young moms!  Moms loved the organic product, and its small and convenient package.  With this information, Justin’s revised its positioning to focus on young moms, by creating a “Justin’s favorite nut butter song” campaign, distributing mostly in local & organic grocery stores instead of sports centers, etc.  Today Justin’s one of the most popular and favorite topics among organic & nutrition magazines, and is available in almost every big grocery chains in the US!  In short, Justin’s success is due to the revised and corrected focus based on their research to understand consumers!

Direct Marketing: Many small business owners prefer direct marketing, because the result is usually linked straight to revenue, and thus it’s easy to measure.  Marketing piece goes out, phone call comes in.  While it is usually a good way to start marketing with a limited budget, FiG wants to remind you about 2 substantive limitations of direct marketing:

  1. Low Purchase/Response Rate: Many marketers complain that response rate of direct marketing is becoming lower and lower.  According to Direct Marketing Association, the average response rate of direct mail is only about 2.5%, and mail still pulls the best response rates!  The reason of this low response rate lies in the consumers changing mindsetResearch and studies show that consumers want more control over the ways that products/services are peddled to them.  They tend to seek the brand that they like, they prefer to control the channels to receive information from marketers, and many of them demand an end of direct marketing for privacy reasons.
  2. Insufficient for Brand Building: Effective brand building requires interactive communication between companies and consumers.  But direct marketing is mostly a monologue. Although lack of an effective brand is not a life-threatening situation for small and medium-sized companies, it is definitely a bottleneck for growth and difficult to compete with those that have well-recognized brands.

This is not to say direct marketing is something you shouldn’t do, we are however, saying that this is something that should be thought out.  Researching your audience can improve your results significantly in two ways.

  1. Does your target audience respond to this marketing method/is it appropriate?
  2. How should you talk to this audience?  Does the message you put out there talk to the audience in a way that connects with them?

Again, FiG thanks you for your input and hopes we answered most of your questions this time.  We’d always love to hear more from you. So don’t be shy and leave us a comment!