Entrepreneurs have implemented direct marketing systems in their businesses to ensure their success, since prior to the 1920’s.
Harry Scherman was a copywriter for the J. Walter Thompson advertising agency. In 1916 with his partners Max Sackheim, and Charles and Albert Boni, Scherman began a mail order service that offered “30 Great Books For $2.98”. All 30 books were printed, bound, and sold together as one single book known as the “Little Leather Library”. According to Harry Scherman’s 1946 biography, he sold 40,000,000 copies of the Little Leather Library book in the first five years.
In 1926, Scherman and Sackheim founded The Book of the Month Club. It was a United States mail-order book sales club that offered a new book each month to customers. The club started with 4,000 subscribers. In less than 20 years the club had more than 550,000 subscribers all acquired by implementing the principles of direct marketing.
Direct marketing is database driven, targeted to ideal prospects and customers that are most likely to respond, each marketing medium has a means of measuring response with a specific offer, and a call to action that is date and time sensitive.
Dr. Lisa Spiller, marketing professor at Christopher Newport University, describes direct marketing by saying “Direct Marketing is like shark marketing on a minnow’s budget.”
What makes direct marketing ideal for small business owners and entrepreneurs at any level from the startup phase to seasoned mature businesses?
Direct marketing allows you to acquire more customers, sell more to current customers, retain more customers, and multiply customers- the 4 functions of marketing.
These 4 functions of marketing represent the highest level skill an entrepreneur can acquire for long-term success like, generating revenue, wealth, freedom, and choice of lifestyle.
With direct marketing you really don’t care about branding your logo, you are more concerned with who responded, and to what offer did they respond.
Let’s examine the why direct marketing works no matter if you have a startup company or a more mature business.
The 3 main components of direct marketing.
1.) The Database
The database can be anything that can store names, addresses, phone numbers, email addresses, and any other data about your customers that is relevant.
The more information you have about your customers the easier it is to target other prospects similar to your current customers.
If you are just starting your business, databases can be as simple as an excel spreadsheet (normally referred to as a customer list, instead of a database.) But it is better, if you have a relational database that can track response rates from each marketing medium and each client, while tracking what the client purchased, and the date it was purchased.
Here is an example of how you can use your database to retain and sell more to current customers.
From the information in your database, you know the wedding anniversaries of your clients. You have a client that has bought 2 or 3 times from you.
By looking at your database, you realize that this client is about to have their wedding anniversary. Knowing this piece of information gives you a reason to contact the client, plus you know the client has a reason to buy, and there is a concrete date in which they have to purchase. You can put together a special offer for this client, and refer them to your website to claim the offer, invite them to claim the offer by calling a phone number, or by visiting your place of business.
Now imagine you have 2500 clients in your database, on any given month there is an average of 208 clients having an anniversary each month. By contacting these clients, on the month of their anniversary, and making them the special anniversary offer, this can yield a substantial increase in monthly and yearly revenue. This is done at very little expense in regards to time and money to generate this additional revenue. This is the power of a database.
2.) The Advertising Is Very Targeted to Your Customers and Prospects
Direct marketing is laser focused to your ideal customer. Each products and/or service you offer is presented by the advantages, features, and benefits of the product as it relates to your client’s wants, needs, and desires.
With direct marketing you know exactly who your customers are, because of your database. Therefore, it is easier to find more prospects similar to your best customers. The more precise you’re advertising, then the higher the response rates and the more profit you will earn.
Plus, you will save money by not wasting money on ads that are not targeted to prospects that are similar to who is in your database. With direct marketing, the database allows you to know who your customers are, and this drives your marketing and advertising.
3.) Each Marketing Medium Requires Some Means of Measuring Response.
A response can consist of anything from an inquiry phone call, an email, a click to a specific website, a sale, etc. A response is normally any means, where a targeted prospect performs a specific measurable action that is requested by the company running the advertisement.
Why is it important to develop some way of telling which advertisement generates a response? Being able to tell, who responds to which ads, allows you to determine:
1. How many leads or sales you generated from each ad.
2. Your return on investment for each ad.
3. Which ad is profitable and which ad is not.
4. Allows you to test competing ads against each other to see which ad generates the greatest response.
So, consider the example of using your database to send offers to clients with anniversaries. Upon looking at your database, you start looking at who actually purchased from the anniversary offer. You notice that of the 208 people each month that you sent an anniversary offer, you have 10 -15 people that actually purchased the anniversary offer from you each month.
When Valentine’s Day approachs, do you think it would be a good idea to send the clients that actually purchased from your anniversary offer a different Valentine’s Day offer, than you send the rest of your customers?
This gives you another reason to contact clients that have purchased from you in the past and it also gives the client another reason to purchase from you, with another concrete deadline in which they have to purchase.
In closing, today, technology has allowed entrepreneurs to implement direct marketing:
• To reach their targeted audience on a global level instead of a local level
• Automate many of the marketing systems that cost a fraction of what traditional direct marketing systems cost
• Test their offers on micro budgets
• Scale their business to unprecedented levels
• Providing the entrepreneur more time and freedom to choose their ideal lifestyle.
To learn more about applying direct marketing in your business attend the Direct Marketing Superstars Worldwide Summit, that is delivered online, where some of today’s most brilliant and successful marketers teach you how to implement direct marketing into your business quickly.
FREE -Watch the first presentation of the summit that expands on the 3 main components of implementing direct marketing in your business and shows you why direct marketing is ideal and the most profitable type of advertising for small businesses.