Essay, Research Paper: Direct Marketing

"Anything that's got my name on it, I open, because you never know
what it will be," comments one focus group participant in a recent study of
direct mail trends commissioned by the Graphic Arts Marketing Information
Service (GAMIS) of PIA.

In the late 1800s, Richard W. Sears, a railroad clerk in North Redmond, Minnesota, acquired an abandoned case of pocket watches. Using his list of other railroad clerks throughout the Midwest, he marketed his watches with great success. Sears recognized immediately that an entrepreneur with a list of accurate names and addresses, and a stock of quality merchandise, no longer needed a store. He only needed a good message delivery vehicle and first-rate customer service. And so was born an American institution, one of the first and most successful direct marketing stories of all time: Sears Roebuck. The business grew to be the largest direct mail order company in the world. It wasn't until 1931 that its retail store sales surpassed mail order sales. And many, many more mail order business success stories followed. In fact, because distances between suppliers and consumers throughout the newly forming territories were so vast, and the increasing variety of merchandise being produced was in such demand, mail order opportunities seemed endless. A robust network of railroads connected countless small towns and cities, many without stores. And each community, no matter how small, was served by the U.S. Postal Service, a system established by the farsighted authors of the Constitution of the United States in 1787 to help knit the young nation together.

"Today, the U.S. boasts a $1.5 trillion market for direct marketers. This is without a doubt the largest and richest single market in the world and growing at an unprecedented 8.6% per year. With over 10,000 different catalogs alone being mailed in the U.S., there is a niche for every player and every project and service."¯ Technology and innovation have improved, but the principles fostered by Sears have remained intact.

Direct-mail Marketing
Though the tried and true principles have remained the same, direct mail has improved exponentially in appearance and the way in which data is collected over these past years through vast technological advances. Direct mail is very appealing because unlike any other form of marketing, it offers measurability. Direct mail is an expensive marketing tool because it is incredibly targeted and therefore has a higher success rate. The basis for winning direct marketing is targeting the right people with the right offer in a compelling way that generates response. The goal of direct mail is to generate an immediate measurable response. That's why even though direct response costs, more, done effectively it's a good investment. Direct response advertising results show you what does and doesn't work. General and image advertising can't attribute specific sales to specific advertising efforts while direct response does.

Direct Marketing "“ Door-to-Door
This form of retailing originated several centuries ago and has mushroomed into a $9 billion industry consisting of about 600 companies selling door-to-door, office-to-office, or at private-home sales meetings. The forerunners in the direct-selling industry include The Fuller Brush Company (brushes, brooms, etc.), Electrolux (vacuum cleaners), and Avon (cosmetics). In addition, Tupperware pioneered the home-sales approach, in which friends and neighbors gather in a home where Tupperware products are demonstrated and sold. Studies show that 51 percent of Americans have purchased goods or services through direct sales. That's more than the number who have purchased through television shopping and on-line computer services combined. People value the products available through direct selling and 45 percent of Americans want to buy from direct sellers. Although, direct selling sometimes has a negative stigma attached to it, there are many advantages to buying from direct salespeople. Usually a lot of research has gone into finding out whether or not a consumer would be interested in a product and when the list is finally created, it is a very narrow and targeted list. "Direct sellers can arrange their calls to fit consumers schedules and can deliver purchases directly to the them. Direct salespeople are knowledgeable about their products and take the time to personally demonstrate and explain their products."¯
Direct Marketing "“Internet

While prospecting via the Internet may be a tough nut to crack, it's clear that e-mail is well suited for keeping customers active. "On the retention side," says Brady, "marketers now have a powerful new vehicle. Unless you were a cataloger or a club, you didn't always invest in
regular customer communication. A lot of companies are seeing the power of e-mail in particular to drive revenues and customer loyalty and retention. As e-commerce has found its place on the Internet, the impact on direct mail remains uncertain. In many ways, the Internet complements direct mail, providing a unique way to generate leads and enhance prospecting efforts. Even today the Internet is an attractive option for new direct marketing advertisers. There is no doubt that the Internet will reduce the need for conventional direct mail, but e-commerce businesses are potential new direct mail advertisers. "Email is cheap, sending out a catalog can cost $1 or more, according to a report issued last year by Cambridge, Mass.-based Forrester Research. Companies can send an e-mail for a cost of less than 1 cent to 25 cents, depending on volume and on the content, which can include video and audio, as well as personalization."¯ While conventional broadcast advertising and internet banner ads often reach people who have no interest in a particular product, e-mail marketing, if carefully targeted, reaches only people who have already expressed an interest in the advertised product or related products. Internet and E-commerce companies are now turning to the well-seasoned and measurable way to drive consumers to their site. By sending a direct mail piece, the site becomes more real and credible to them. Catalogs and other direct marketing pieces also help reinforce the brand, ""¦direct mail promises to be an excellent way of reaching prospects and persuading them to visit a web site. "We know that we can make two to three times more people visit sites via direct mail than through advertising," says Millner." If a dotcom business sends a piece of direct mail, it adds an extra dimension to the business. People like to hold things in their hands and this offers tangibility and the human touch."