Direct Marketing: Overlooked, Underappreciated, and Unstoppable


Every business needs customers, but more importantly every business needs to maintain those customers while constantly retaining new ones. The only successful way of doing this is by learning everything about your customers, including who they are? What do they have in common? Do they share a hobby, an age range, a life stage, or a geographic community? Can you break them down into groups? The answers to these questions hold a wealth of information for you. Although direct marketing can be overlooked by many businesses, here are statistics proving the effectiveness of direct mail campaigns over the years.

According to the DMA (Direct Marketing Association) 2005 Postal and Email Marketing Report:

* For postal mailings, 43% of direct marketers indicated that their up-front gross response has increased from 2003 to 2002.

* As with postal mailings, when asked about 2004, respondents showed more optimism in their up-front email response rates, with 51% projecting an increase and 32% stable response rates.

* For postal mailers, the top list techniques used to improve 2003 front-end response were enhancements to internal housefile databases (50%), demographic segmentation (50%), and prior mail history analysis (46%). Most list techniques had a success rate of 80% or greater.

According to the DMA 2004 E-Commerce Report:

* The portion of companies having an in-house email marketing list has increased from 74% to 85%

* 43% of Web and email investment is allocated towards marketing, compared to 35% in 2002

The direct marketing industry employs the top minds of our world to analyze and build databases and marketing campaigns to address only the concerns and needs of a selected audience, which history has proven to be accurate 70% of the time. Typically, budgets are based more on analyzing the product, service and/or the consumer rather than playing an ROI guessing game.

Case Study of a Client

Here is a case study of a client that used direct marketing to increase their bottom line:

Allied Home Mortgage Capital Corporation (AHMCC), the largest U.S. privately held mortgage banker/mortgage broker initiated a more sophisticated form of direct mail marketing in 2003, which included the use of opt-in email files and multi-level marketing to reach new customers. The results were that AHMCC increased their revenues by 100% and increased their closing ratio by 15% by using email alone. Customer loyalty went up and referrals hit the roof. AHMCC now has 700 offices in 49 states, Guam and the Virgin Islands!

As the marketplace continues to evolve and change due the economic landscape and the need to offset expensive ad campaigns, direct marketing continues to play a major role for the success of any sized business. Regardless of the negative connotations that the public has on direct marketing, the truth of the matter is that corporations are vehicles that satisfy the needs of people and marketing is the channel that helps facilitate this process.

Ultimately, in order to be successful, companies must learn to maintain the loyalty of their customers and get in front of new ones by practicing 1 simple rule: Providing good product and service to the right people, at the right time, in the right place and in the right way.

Brian Rice is the Co-Founder and CEO of Red Clay Media, a data compiler and direct mail company. Red Clay provides customized, targeted mailing lists to business owners, list brokers, and professionals in the mortgage and insurance industry. Visit http://www.redclaymedia.com or email brice @redclaymedia.com.