Using direct marketing
Direct marketing enables you to communicate directly with individuals, rather than the mass market. This highly targeted and personalised approach can help grow your business in a cost-effective way.
Understanding direct marketing
- is a form of below-the-line marketing. This means it doesn't use mainstream media like television or radio
- connects with a selected audience through direct channels like email
- typically encourages people to take direct action.
In comparison, advertising is above-the-line marketing, with the goal to reach a mass audience, typically through broadcast media.
A direct marketing campaign can be standalone or part of a bigger, integrated marketing program, which could include advertising your business.
Benefits of direct marketing
Direct marketing is part of the promotional mix. Because it communicates directly with customers, it can deliver a higher conversion rate (the percentage of the targeted group that, for example, buys your product) at a lower cost.
- is affordable
- is measurable
- enables you to promote your products and services directly to the customers who need it most.
A successful direct marketing program will:
- enable you to reach target individuals in an efficient way
- help you to personalise and customise your messages
- attract new customers and increase their value to your business over time
- support long-term relationships and improve customer satisfaction.
Read more about marketing on a small budget.
Steps to a successful direct marketing campaign
To be successful, your campaign must:
- have a clear purpose
- be based on recognised marketing principles.
Before you start...
Take some time to think about direct marketing you've received. Ask yourself:
- what did I like about it?
- what did I dislike?
- can I avoid the mistakes others have made?
Follow this guide to plan your direct marketing activities.
Based on your marketing plan, you may have identified direct marketing opportunities. This would include what you want to achieve with a campaign and KPIs to measure your progress.
You may, for example, want customers to:
- register interest
- visit your website
- read an article
- make a booking
- buy a product.
It's important to set clear and realistic goals. These may be linked to:
- financial outcomes (e.g. sales numbers)
- communication needs (e.g. educate or inform customers).
Consider the total budget you documented in your marketing plan. Then think about factors like:
- number of contacts (how many people will you reach?)
- availability of data/contact details (will you use a database you've developed or buy a contact list?)
- production costs (what type of marketing material will you use, and what quality are you aiming for?)
- distribution method (are you, for example, mailing out printed material or are you sending emails?).
There will be major differences in costs between, for example:
- emailing a newsletter to your existing customers based on your own customer database
- mailing an information pack to potential business customers (B2B) based on a list of target business contacts you've bought.
Link the campaign budget with your KPIs to ensure you're on track to achieve a positive return on marketing investment.
Because direct marketing is a highly targeted tactic, it's very important to select the right target audience. Make sure you:
- choose customers who best match your products and services
- focus your efforts based on the group most likely to deliver results.
You can choose the right audience by looking at your:
- segmentation model – existing and potential customers.
- customer records – your own data (or purchased data).
You can have different marketing programs for specific customer groups:
- new customers – you may want to generate leads and convert potential customers to new customers
- active customers – you can, for example, provide product updates to cross sell or upsell
- lapsed customers – you could try to re-establish contact and find out why these customers stopped supporting your business
- loyal customers – reward and reinforce their loyalty through, for example, special offers and birthday cards.
Think about how you can use direct marketing at every stage of the customer journey.
An important part of your campaign is to create attractive offers that will encourage customers to give the response you want.
Consider this your unique selling point that can create a direct response from customers. Ask yourself:
- How are we encouraging the responses we want?
- How will we deal with the responses?
- How will this support our sales process?
Remember that you can customise these offers for different customer groups. Try to create content that your customers would like to share on social media and make it easy for them to share it.
Select the direct marketing techniques that best fit the campaign you're running. To decide which channels to focus on, consider things like:
- the behaviour of your target audience
- your budget
- your expertise and skills.
Read more about the advantages and disadvantages of different types of direct marketing below.
Consider delivering your campaign in phases. This will enable you to:
- make sure your business can accommodate all the responses
- test first before you roll out the rest of the campaign.
To run a campaign, you need to finalise and implement the following 3 elements.
Creative – develop your communication approach
As part of your campaign planning, you would have decided on offers and channels. Suitable creative elements (i.e. visual design and written copy) will now need to be developed. You could include variations to test.
Production – make the content to suit the medium
Once you have your contact list, you need to build your direct marketing material or content in the correct format. This may require technical expertise for digital communication or working with a supplier for printed materials.
Distribution – deliver your communication to individuals
This is how you will go to market with your direct marketing contact – which could be telephone, mail, email, etc. You may need to engage with external suppliers such as mail houses to help manage the distribution of your direct marketing.
Using professional services
To make an impact, don't cut corners on the design. Design is critical to the success of your direct marketing so consider using the services of a professional designer and copywriter. Think about your proposed direct marketing campaign and ask yourself:
- Do we have the right in-house skills and expertise available?
- What suppliers could help us deliver the program?
- Are there software options that we should explore?
Find out about using professional marketing services.
Direct marketing provides direct feedback. It's a great way to test:
- interest in new offers or initiatives
- new markets.
Direct marketing results can be tracked throughout the campaign, so you'll have a real-time view of how different customers are responding to different offers.
Learn and improve as you go. Evaluate the results against the KPIs you've identified and use the insights to make adjustments.
Calculate your return on investment
For example, imagine you planned and delivered the following campaign:
- You sent a direct mail with a discount voucher to 100 customers.
- 15 customers presented the voucher to buy something.
- That means the response rate for your direct mail was 15%.
The total cost of your direct mail campaign was $250. The total profit generated was $375 (i.e. $25 per customer). So, this campaign resulted in a positive return on marketing investment of $125 (or 50%).
You can use our ROI calculator.
Test and learn
You can use A/B testing to compare the performance of 2 versions of your creative, production or distribution. For example, you can change and experiment with variables such as:
- send/mail out times.
Use what you've learned
For every direct marketing campaign, keep a record of:
- what worked
- what didn't.
Also keep a record of your response rates as these will become a benchmark that you can strive to outperform with your future campaigns.
Finally, think about initiatives that could become more permanent rather than one-off. Your data will provide all the evidence you need. For example, you may introduce 'always on' direct marketing initiatives such as:
- a welcome email to all new customers
- text alerts when items have been shipped
- outbound follow up phone calls to high value clients.
Tips for effective direct marketing
- Design for impact and keep messages clear, simple and direct.
- Present strong offers that are right for your brand and your customers.
- Keep an accurate and thorough database of customer records.
- Take advantage of the opportunity to personalise and customise messages and delivery.
- Think about sustainable marketing practices and reduce waste.
- Use marketing automation tools to be more effective.
- Test and measure what works and continue to learn and refine your campaigns.
- Avoid risking your business's reputation by mistargeting and overusing your database.
- Ensure your direct marketing meets all legal requirements.
Types of direct marketing
It's helpful to understand the advantages and disadvantages of different types of direct marketing. Remember:
Direct mail is personalised and addressed mail that is sent through the post. It's one of the most recognised forms of direct marketing.
It is usually distributed to either:
- existing customers (e.g. using customer records stored in a customer relationship management system)
- potential customers (e.g. a contact list of people who've agreed to receive offers from third parties).
Make sure that your business remains compliant with privacy laws.
Addressed direct mail can be:
- envelope mailers – inserts inside an envelope
- self-mailers – an addressed, folded sheet
- dimensional mailer – something with length, width an height, for example, a bag, tube or small box.
The response rate to your direct mail campaign will be influenced by the quality of the:
- direct mail – use stand-out creative elements and a strong call to action
- segmentation – use a reliable and accurate contact list.
You could also consider:
- incentives, like discounts, to improve the response rate. Make sure you have the budget and capacity to deliver
- following up with another tactic such as telemarketing (see below).
Letterbox drops distribute unaddressed mail in a specific area. It's a simple, proven and inexpensive way to reach customers.
Attention-grabbing leaflets, flyers, brochures and catalogues can work well to promote products and services with broad appeal.
As this is a less targeted form of direct marketing, the response rates are typically lower.
You can do the deliveries yourself in your local area or use distributors.
Find out more about Australia Post's range of unaddressed mail services.
You could also take a more targeted approach and distribute your marketing collateral (subject to the relevant approvals), at places such as:
- street locations – for example, outside your business
- selected events – for example, industry forums and community expos.
To improve your direct marketing effectiveness, consider how you can:
- stand out – for example, hand out at an event with no competition
- motive people to respond – for example, offer a discount or a coffee.
Telemarketing involves contacting existing or potential customers by phone. The aim is usually to turn contacts into prospects (people who might buy your products or services).
People can react negatively to telemarketing and response rates can be low.
To be as effective as possible, make sure:
There are different types of telemarketing:
- cold calling – the first interaction with a potential customer
- warm call – calling a person on your prospect list
- follow up – for example, about a direct mail pack you've sent
- research – for example, gather information about customer satisfaction
- check in – for example, to update customer records, or test interest.
To run a telemarketing program, your business can either:
- use your existing sales staff – think about training and skills
- outsource to a specialist call centre – think about cost and return.
Make sure you keep up to date with your telemarketing obligations.
Email marketing is a popular, measurable and cost-effective way to communicate directly with your customers.
You can use electronic direct mail in different ways, for example:
- regular e-newsletters
- promotional offers
- product updates
- event invitations
- advertise in third-party emails.
To run effective email marketing, you need the right:
- systems, for example, customer relationship management (CRM) and email marketing software
- internal or external skills, for example, campaign management and database analytics.
Be sure to:
- manage your customer database with care – it's an invaluable resource
- meet the legal requirements of collecting, storing and using customer records.
Read more about making the most out of email marketing.
Text messaging is a personal, instant and low-cost form of communication. It's also less likely to be ignored as people usually read text messages. However, this also means you need to:
- keep it short and sharp – single message
- respect personal space – don't text too often
- have a good reason to text – offer something real or practical.
Text messaging can be effectively used for communication such as:
- alerts about time-sensitive sales promotions
- appointment reminders and delivery updates
- personalised messages such as birthday wishes.
Remember there are strict privacy regulations for commercial text messaging. When you consider SMS marketing – be aware, be specific and be responsible.
Find out more about targeting mobile devices in location-based marketing.
Direct selling can be an efficient way to grow a flexible and low-cost business. This typically involves independent salespeople who sell products and services:
- directly to customers
- from places like homes, offices and other premises.
The traditional direct selling methods include:
- person-to-person sales (e.g. appointments with customers at their homes)
- door-to-door sales (e.g. visiting homes or businesses)
- in-home presentations (e.g. gatherings to present products)
- venue sales (e.g. setting up booths or kiosks)
- network marketing (e.g. recruiting sellers to 'duplicate' sales roles).
Disadvantages of direct selling include the:
- extra effort required to reach new customers
- difficulty managing inventory with no retail premises
- negative impact of illegal schemes.
To professionally market your business through direct sales:
- polish your sales skills, product knowledge and business networks
- refer to resources from Direct Selling Australia
- read sales practices – a guide for businesses and legal practitioners by the Australian Competition and Consumer Commission.
Direct marketing to-do list
- Find information and support from the Association for Data-driven Marketing and Advertising (ADMA).
- Find ideas for marketing on a small budget
- Take our online marketing health check to identify the areas you should focus on.
Video: Ways to advertise and market your small business
Watch our video to help turn your marketing strategy into an action plan of activities to promote your business and grow your sales.
- an information checklist before you invest in marketing activities
- how to progress from a strategy to an action plan
- exploring activities like advertising, PR, and sales promotions
- understanding the 'who, why, what and where' of marketing.
Direct marketing laws and regulations
Direct marketing is governed by important privacy regulations. If you're planning to run a direct marketing campaign, you must:
- be aware of all legal requirements
- always meet these requirements
- train your staff to meet these requirements.
Australian Privacy Principles
Read more about how your business must comply with the Privacy Act 1988 (Cwlth).
Do Not Call Register
The Australian Communications and Media Authority (ACMA) manages a Do Not Call Register to offer consumers the choice to opt out of receiving calls and faxes made from telemarketing call lists.
Find out more about your obligations under the Do Not Call Act 2006 (Cwlth).
The Spam Act
The Spam Act 2003 (Cwlth) applies to email marketing and text messaging. Under Australian law, it is illegal to send commercial electronic messages that are unsolicited.
Discover more about the spam regulations and your responsibilities.
You can buy a list of contacts matching your target profile only if these contacts have agreed to receive messages from third parties.
The principal industry body, Association for Data-Driven Marketing and Advertising (ADMA), provide up-to-date information on responsible and effective direct marketing practices.
- Find advice and calculators for pricing products and services.
- Read more about advertising your business.
- Find information for sales promotions.
- Learn more about using professional marketing services.
- Last reviewed: 29 Aug 2022
- Last updated: 31 Aug 2022