There was a time when the seller sold goods to the buyer, knew his name, his family and his entire genealogy, in some cases. So, the buyer kept returning to the same shop because there was a personal touch. But as market expanded, the distance between the buyer and the seller also grew, and the personal touch was lost. More products flooded the market and the seller was faced with a challenge to distinguish his product from others. Thus emerged 'the brand', a synonym for the benefit that the product would guarantee to the buyer. The brand became instantly recognisable from a clutter of products, created an aspirational value, and allowed the seller to go 'mass'. The brand delivered results, but in many cases a flux of brands followed and left the consumer confused. Cost-cutting became the name of the game, and price wars became common. It’s back to square one. Retaining customers became a subject of study. Now the producer is returning to the basics, and making a keener attempt to know individuals who’re buying his product, and now using a new avtaar of an age-old weapon called direct marketing (DM).
Although DM is fairly an old concept, today's marketers are increasingly discovering its latent power. Direct marketing is fast becoming an important tool to reinforce the power of the brand in consumers. It helps the customer make a more informed choice by cutting through the clutter, and creating brand loyalty.
DM doesn’t undermine the brand, nor of other conventional mass media like advertising, promos and PR, but only complements them. Apart from creating an aspirational value and pushing sales, a brand also needs to build a bond with the customer so that s/he keeps coming back. Conventional media tools prove insufficient in this aspect. DM, also called relationship marketing, is a process of individually introducing yourself, your service, or your product and forming a continuing relationship with a special customer group. This involves carefully targeting and identifying potential customers and keeping in touch with them throughout the sales process, to address their needs, aspirations and tailor messages and products accordingly.
DM came into its own during the 1990s as the economy opened up. MNC brands started gaining an edge over local brands as they had a more aspirational value. Consumers shifted their loyalties towards foreign brands and many local producers found it difficult to connect with their customers, as they didn't know who their customers were. In many cases, the very brands, which producers were once proud of, drowned in the clutter. A bitter lesson was learnt and firms supplemented traditional marketing plans with significant DM exercises to regain lost ground. Today, even a firm producing an impulse product like ice cream makes it a point to insert a coupon with its print ad!
Where DM scores over pure brand advertising is that it’s measurable. Also, well thought out campaigns are often much more cost-effective. One can get accurate results and, as an additional benefit, an invaluable insight into the mind of the customer. The first step to implementing DM is to know who you are targeting. Once, you’ve a picture of your customer in your mind, you can start targeting your products and services at him, and, what's more, measure the results. Some of the DM tools are direct mailers, direct response print ads, direct response television ads, direct response radio ads, telemarketing and, of course, the Internet.
However, there is a wide perception that a brand built purely by DM lacks aspirational values. A consumer buys a popular brand because she wants others to see that she's using a sought-after brand. As opposed to this, DM is very discreet. Companies are realising this and making the necessary improvisations in their DM and other communication strategies. Today, you see a television ad that ends with a contact number or an SMS code prominently flashed across the screen, or a print ad carrying an entry form for some contest. This is nothing but an attempt to understand the demographics and psychographics of the customer. This database proves valuable to design a comprehensive customer relationship programme. The challenge is to make new customers without losing out on the old ones.
Among the sectors most driven by DM in the country are banking and insurance. These are the businesses where trust is paramount. Keeping customers updated with the developments in the firm reinforces trust and confidence and enables firm to push new products to existing customers and assists in getting new customers. word-of-mouth plays an important role here too.
Insurance is a business that operates on trust. However, today the sector is highly cluttered from a media perspective. A communication strategy that involves sustained DM will help a company win new customers and keep existing ones. It also helps insurers target specific products to specific customers after studying their socio-economic and demographic background. A great example of a combination of advertising and direct marketing is of Tata AIG Life, where each ad ends with a number prominently flashed across the media. Such ads solicit responses from viewers and the cost-to-responses (CPR) ratio can be accurately measured and campaigns can be constantly re-engineered to ensure best results.
As the markets get more complex, there’ll be further improvements in the way sellers connect with buyers. It will be very interesting to see how marketers grapple with cultural changes as businesses grow global and adjust to new societies, yet maintain the basic brand ethos. The game hasn't changed in two hundred years, only the rules have.
So, to sum up if direct marketing is not already a prominent part of your marketing campaign, now is the time to adopt this method and exploit its potential to the full.
