Question

What are the advantages and disadvantages of direct marketing?

Answer 1

Advantages of Direct Marketing

There are a range of advantages of direct marketing, these are summarised below:

1) Builds loyalty – A well-run direct marketing campaign can build brand loyalty by continual brand messaging on direct marketing channels. This is particularly effective where multi-channel messaging is used, e.g. Email, direct mail, SMS, etc. all in one consistent joined-up coherent campaign.

2) Direct – As the name suggests this technique is direct. This engagement directly with the customer eliminates price hikes due to “middle men” and provides a direct approach. This has benefits as the organisation is totally in charge of the contact and can apply in-house CRM techniques to effectively manage the relationship

3) Effective – Direct marketing when managed well has a long-standing reputation for high profitability and great ROI

4) Monitorable – Tracking and monitoring can be put in place to effectively analyse the results of a campaign. Strengths can be accentuated and weaknesses eliminated, with a view that through continual tweaks/enhancements campaign ROI and metrics will only continue to grow in the medium-long term

5) Personalised and targeted – Direct marketing can be personalised based on actual experience of working with a customer and/or socio-economic factors. Even for prospects personalisation can achieved through techniques such as customer segmentation and data profiling

6) Reduced competitor awareness – Competitors will have a much lower level of awareness with direct marketing as it is direct to the customer. Other marketing techniques such as TV, Radio, Internet advertising, etc. are public and open to counter-moves by competition

Disadvantages of Direct Marketing

There are some disadvantages of direct marketing, these are summarised below:

1) Environmental impact – Some of the direct marketing channels are associated with having an environmental impact (most noticeably direct mail). This can be reduced by targeted direct mail campaigns and using environmentally friendly materials. This marketing technique is no worse than many indirect marketing methods (e.g. billboard posters)

2) Image impact – It’s a common perception that image can be adversely affected by some direct marketing campaigns (direct mail and telemarketing in particular). Whilst this is true for poorly managed campaigns, the effects can be avoided by ensuring contacts are opted-in and happy to receive marketing messages (which is beat practice anyway!)

3) Limited reach – This is a “perceived” disadvantage of direct marketing to many. The limited reach is due to the fact that mass broadcast techniques (e.g. TV, Radio, Internet Advertising, etc.) are not used. Although it’s true the reach is less, the reach achieved is more specific and targeted. Reach can be extended by buying high-quality targeted opt-in additional contacts from reputable sources such as Baker Goodchild.

4) Privacy intrusion – The main drawback of direct marketing is its links with privacy intrusion (this is particularly related to telemarketing and direct mail). This is definitely the case with badly managed campaigns and links closely to the image impact above. Once again with true opt-in consent and best practice campaign management privacy would not be an issue

Note: All of the above disadvantages can be countered by working with a high-standard direct marketing agency such as Baker Goodchild. Customers working with ourselves would not experience the above disadvantages as we would take the necessary steps to avoid the potential harmful consequences.