Direct Response Marketing 101: Definition & Best Practices
Direct marketing response is one of the most effective marketing methods for businesses. Why is direct response marketing a great form of marketing?
According to statistics, revenue from Direct Response Marketing in the US in 2006 reached $ 6.5 billion, an increase of 6% compared to 2005; in 2007, it continued to increase to 7.4% (reaching about 7 billion USD) while the average increase in revenue from marketing and advertising activities, in general, was only about 3.9%.
Businesses often use this form of marketing to serve their sales purposes and engage with more potential customers. Although the form of direct marketing is not new, not all businesses apply to it. So to make sure you are not among them, we will help you better understand the direct response marketing definition and provide you with some best practices for your reference.
Table of contents
- Direct response marketing overview
- Why should your business do direct response marketing?
- Direct response marketing best practices and tips
- Make it easy to respond
- Set a reasonable time limit
- Offer giveaway and free products
- Make clear instruction and information
- Use direct response marketing to drive upsells
- Use direct response marketing for recruiting
- Optimize Facebook Ads
- Segment and target warm audiences with Messenger ads
- Using referral programs
Direct response marketing overview
What exactly is direct response marketing?
Direct Respond Marketing is the promotion of a product or service directly from the seller to the consumer, not through intermediaries such as TV advertisements, radio advertisements or public billboards. This type of marketing can be especially effective for small and medium businesses with less brand recognition and moderate advertising budgets.
- Direct response marketing methods:
There are 4 different methods of direct feedback marketing today. Door-to-door marketing, face-to-face meetings are often done by salespeople visiting potential customers in routes and communities in order to convey their message. Call customer lists to promote products or services and attract orders called telemarketing. Advertise by direct mail or by sending coupons, leaflets, and promotional items to consumers within targeted areas. New technology has allowed email delivery to reach potential customers.
- Benefits of direct response marketing:
The direct response marketing method can track customer response, allowing effective marketing oversight to ensure a clear return. Advances in technology have made it easier to develop leads and track customer feedback. You can use specialized software to reach your target audience in many ways, as well as to capture, prioritize, and analyze user response. Correctly targeting the prospect list will help you not to waste time and money on uninterested consumers.
- Limitations of direct marketing:
Direct responding marketing can be frustrating for some consumers and can lead to backlash or boycott of your product or service, which can even cause a negative brand image. In recent years, nationwide “call restriction” lists have been set up to restrict telemarketers from calling specific consumers, and “non-soliciting” notices are often posted on the doors of retail stores and commercial buildings.
- Advice for marketers:
Directly responding to marketing campaigns with in-depth analysis and research will have a significant effect on targeted demographics. Give clear and simple messages and express them sincerely and honestly. Time is very precious. Therefore, do not arbitrarily contact customers. Avoid telemarketing during dinner time and disrupt work when they are the busiest. For example, don’t try to talk to a restaurant owner during meal times, or contact a hairstylist at night or on the weekend.
Which kind of business should do direct response marketing?
This direct response marketing method is suitable for all types of businesses (including large, medium, and small). However, as in the definition, I have specifically emphasized that this type of marketing perfectly suits small and medium businesses. Here are the reasons why.
According to Leadpages, small businesses have two digital marketing priorities. They are building brand awareness (48.4%) and boosting sales (51.3%).
Hubspot’s 2019 State of Inbound Marketing report has shown that there are three major marketing challenges for small and medium businesses, as shown by the chart below:
Small and medium businesses can take advantage of direct marketing by:
Direct response marketing focuses on the leading generation.
Direct response marketing has a faster response rate.
No need to spend too much money to implement this type of marketing.
Direct response marketing can be easily tracked.
Today, with the development of communication technology, a form of direct response marketing must be understood as an interactive marketing system. This system uses one or more advertising media to influence a response that measures transactions at any location (as defined by the American Marketing Association).
Therefore, this type of marketing is done in order to achieve a measurable response, that is, visible, and business development. It is usually a buyer’s order or an offer-to-order service. In this way, based on the customer database, marketers establish relationships and get to know customers.
Specifically, the promotion of airlines, hotels, and commercial enterprises almost relies on the frequency of customers passing through them regularly. This is to assess and expand the market by giving gifts, promotions, offering different offers, etc. It’s simple but can help your store find potential customers.
If you have a good marketing team, they will track and know the number of potential customers. From that number, marketers will convert conversions into paying customers. This proves that it is possible to measure your direct response campaign and quickly bring in a return on investment. So, this becomes perfect and ideal for small and medium businesses.
Crucial elements of direct response marketing
To implement direct response marketing effectively, prompt customers to buy, you should pay attention to the crucial elements below.
An attractive offer
This is the offer you made to the prospect. The offer includes details of the product or type of service, price, special offers, consumer benefits, and so on. In other words, offers are the main content of what you offer and believe it meets what customers need, customers want.
However, instead of wanting to sell anything, the goal of these offers is to draw attention to the audience and get them to act immediately. In particular, for the audience to act faster, you can touch the audience’s pain points, including emotions, disappointments, fears or desires.
Besides, for your offer to be attractive and attract many responses, it needs creativity. You can take care of the form of the offer (including presentation, images, text, printing techniques) to make it eye-catching and unique.
The information is the next key component of direct response marketing. Advertisers only have a few seconds to attract customers. Therefore, ensure a consistent, personalized, and persuasive message. A direct response ad will be compelling enough to get customers to take action immediately if it has enough information.
However, how much is enough?
The answer is it depends on the product you offer. If the product is less popular, it will need more information and vice versa. I will give an example to make it easier for you to understand.
Almost everyone knows the iPhone. Therefore, you should not provide too much information for a popular product. The only thing you need to do when selling products like the iPhone is to give some relevant details to get them to convert. Besides, if you choose to sell a newly launched product, customers will need to learn more about it to have confidence that this is a good product and they need it. At this point, you need to give as much necessary information as possible. Thanks to this, you will avoid customers leaving before converting just because they do not know your product.
As mentioned above, you only have a few seconds to draw your customers’ attention. Therefore, it is best to incorporate the necessary information with your advertising CTA.
Call to action
CTA can be considered as an indispensable component in any direct marketing campaign. It not only guides your customers in action but also tells them how to take the next step. A direct response marketing ad would be extremely good if it used strong CTA. It is highly recommended that you should give mandatory CTAs.
Here are a few CTAs that you can use:
Follow a link
Subscribe to a video channel
Share a video or article
Sign up for the newsletter
Collect coupon codes
Contact your business
Buy discounted products
Downloading a tutorial or blank paper
Integrating a descriptive CTA will entice your audience to tap on your ad and make your direct response ads more effective.
Why should your business do direct response marketing?
Online brand marketing or mass media is characterized by the fact that no one knows what advertising has forced you to buy a can of Coke, even you don’t know.
However, direct response marketing is the complete opposite. When initiating a direct response marketing campaign, you will know which media and ads generate feedback when there is a response from each audience.
So you can track your ad and know the performance of your strategy. Blue Corona Media conducted a survey and revealed some shocking statistics. Only less than 30% of small businesses track calls or use web analytics. Besides, 18% of businesses say they don’t track anything.
What can be measured will help you manage them and balance them appropriately. Therefore, if you don’t track and measure numbers, you won’t be able to improve them.
Measuring your Effectiveness
As mentioned above, you can know which ad generates which response. Therefore, you will be able to track the effectiveness of each ad and measure the numbers (including the sales you receive from each customer).
What you need to do after knowing is to remove ads that do not bring a return on investment. Or else, you can change something to improve the performance of these ads.
However, you should not be too rushed and change or remove them quickly. Our advice is to track, measure, manage and improve your key marketing numbers little by little. This will bring about a more positive result.
When implementing a direct response marketing strategy, a compelling message of a strong interest in prospects is indispensable.
It needs headlines that draw your audience’s attention along with convincing sales copy, which is “salesmanship in print.”
Typically ads will look like an editorial to increase the likelihood of being read by an audience. You should make this likelihood number be tripled so it would be most effective.
Call to action
Call To Action - Call to action plays an important role in attracting and stimulating users to buy or sign up for the services of your business. Therefore, in your direct response marketing strategy, there should be calls to action - Call To Action. Only then will it be enough to urge users to make their purchase decision quickly.
Targeting specific audiences
While you can reach a wider market with online marketing, that market can also be more specific. Online advertising can be specifically targeted to certain demographics, unlike branding or radio ads or posters that can be viewed by a broader audience. Among them, there may be a number that is not entirely within your target audience.
Advertisers can target for better marketing when purchasing digital ad space through RTB (Real-time Bidding). This way, your ads will appear to the right people at the right time and in the right context.
Customer segmentation directly affects customer management in your business. If you’re trying to grow based on advertising and media, the more you have to identify your customer segment there. Because only then will you achieve business efficiency, minimize costs.
The story arises if you are trading a lipstick that costs 10 dollars/bar. So who will be willing to buy your lipstick? Of course, women will want it more than men. Or office workers will probably spend more on it than the students.
More clearly, customer segmentation is dividing the customer base into specific groups and similarities in some characteristics of marketing work. To segment correctly, many marketers have purchased a list of potential consumers, such as credit card users, new car buyers, clothing shoppers, etc. Also, some ad networks sell audience segments based on behavioral, demographic, and customer interest data.
In particular, ad networks specializing in content types such as beauty, entertainment, food, travel, etc. can be utilized. Then they are grouped into vertical channels. Advertisers will select the topic of potential customers interested in and buy these ad networks.
“The ultimate goal in business is to find and retain customers,” says Peter Drucker, the father of modern management theory. Customers are the source of life of the business, if you retain a large number of loyal, loving, and loyal customers, your business will always have the resources to grow.
Therefore, building trust in customers, and gaining their loyalty is one of the key reasons you should implement a direct response marketing strategy. This strategy allows you or your marketers to personalize promotional messages. In particular, you can ask customers to do something such as subscribe to a channel to create a sustainable link with them. Not only that, but personal connections are also strengthened.
It would be great to combine loyalty programs with direct marketing techniques. For example, you can invite customers to upcoming sales events, or offer discounts, or send birthday cards.
Pushing new business
You can leverage direct response marketing as a great launchpad for your business. Thanks to this, you can effectively communicate with your target market and boost your sales dramatically. With effective direct response marketing, marketers can attract a large number of customers and even create real fans. This strategy is well suited to new businesses that are in the process of adapting and meeting market demands.
In addition, here are a few pointers for you to really take advantage of direct response marketing:
Delete stocks that have been discontinued.
Increase the retention and loyalty of customers.
Keep track of promotions.
Improve sales of specific products.
Extension of sale.
Direct response marketing best practices and tips
Make it easy to respond
If you create complex direct-response ads, your audience will probably ignore them or be frustrated with them. This will result in poor measurement results, and therefore, you may not be able to track them correctly.
For that reason, make sure your direct response ads are easy to understand and implement for your audience. For example, answer a yes / no question or fill out a short form. This not only helps you get more feedback but also saves time for your customers.
Another good example is the number of 1-800. This number is used by advertisers on TV so people can call to buy products. Most people will easily remember it, and of course, the number of people calling 1-800 to purchase will be more than using any other complex number.
As a shop owner, you certainly don’t want to exist for any reason that the customer abandons the shopping cart. To ensure that doesn’t happen and increase revenue, you should simplify direct response ads as possible. Another tip I want to give you is to only give the necessary information. Let’s say you won’t need to ask the audience’s gender if that’s irrelevant.
To clarify, let’s take a look at how Hello Fresh did. When their ad shows up, and you click on a time-limited offer, you’ll be forwarded to a landing page that lets you choose the type of plan you want. Here, all you need to do is enter your email and billing information. And that’s it. It is an extremely convenient and simple process that makes it easy for everyone to use Hello Fresh’s service.
Making it easy for customers to respond will help you find more potential customers. Try applying it now.
Set a reasonable time limit
What makes customers make decisions faster, is the pressure of time. Any time-limited to a product always creates a great temptation to get it. Therefore, setting a time limit is one of the best tips for you to conduct direct response marketing effectively.
Very few people miss the opportunity to try it for free or buy their favorite item with a 50% discount. Especially if these attractive offers are valid for a certain time, they will definitely motivate customers and make them respond quickly.
One thing you need to keep in mind is that the time limit needs REASONABLE. Because you need to give your customers some time to think, however, it’s not too time-consuming to think. If the time limit for your ads is 30 seconds, you will likely lose a lot of potential customers because it is too fast for them to respond.
In a nutshell, setting a time limit is necessary for an effective direct marketing response. You can consider customizing the time you want; however, it needs to give customers a sense of urgency to take advantage of attractive offers.
Offer giveaway and free products
Be realistic. Put yourself in the shoes of your potential customers and determine what motivates you to take the next step and learn more about the product you’re introducing. How can you get closer to this? By looking at this from a potential customer’s point of view, you’ll find that: No one wants to refuse a gift because they simply don’t have to pay to get it.
Now don’t worry when you think you have to go out and buy expensive gifts to give to everyone who comes to your site. That is not necessarily effective. What you need to do is find out how to deliver some important material that is closely related to your product or service to make it more appealing to potential customers.
Overall, your goal is to help people see and recognize the value of your gift before they decide to buy the product or service you recommend. To do so, you need to think strategically. Do the research and find out what your target audience wants, what their needs are, and what problems you can solve. Then you will know the best way to be able to help them. Offering a gift as a temporary solution will help you gain the trust of potential customers before you give them a complete solution - the product you introduce.
You can create an ebook to help customers solve the problem they encounter. In it, you can cleverly introduce the product you are promoting. However, do not overdo it because it will make customers feel lost in the knowledge that you are imparting in the ebook. Besides ebook format, you can create your content in audio or video file format. In particular, it would be great if there is a place for customers to enter their name and email to enjoy the offer.
Make clear instruction and information
To be sure that your potential customers will respond, you need to prepare clear guidelines. When they find it easy to follow the instructions, you can direct them to act on the exclusive offer you make. One of the other reasons you should make these guidelines obvious is that your audience responds quickly.
Make sure your audience only needs to follow your instructions step by step. If there’s something important, like the time limit of the coupon, it’s better to repeat it, to make sure the audience won’t miss it.
In the case of building a form, you should arrange the fields in a logical order. Do not ask for too much information from potential customers other than the basic information needed because this can annoy them and refuse to respond.
To make your guide clear, you can take advantage of arrows or other indicators.
By the above ways, you will have more potential customers to respond to your direct response campaign.
Use direct response marketing to drive upsells
According to a GrooveHQ study, the probability of potential customers buying from you is about 5-20%, while the probability of existing customer purchase is 70-90%.
Therefore, we may find that selling to your existing customers is more important, especially with a recurring revenue model like Dollar Shave Club. Only about 5-30% of their revenue comes from the initial sale:
They create an excuse to sell to their customers every month, thanks to the subscription model they provide. By emailing friendly reminders each month to existing customers, they motivate them to continue shopping.
This is one of the ways to create urgency without giving free or discount. For a direct response marketing campaign, urgency is the key so you can motivate customers to take action immediately.
Use direct response marketing for recruiting
We must all think that marketing is just about selling. However, direct response marketing is not like that. It can also help you recruit. Besides the consumers participating in the platform, you also need to attract high-quality suppliers or even those who work for you.
Good examples are Uber and Lyft. They have tried to attract drivers through direct feedback advertising. They encourage people to answer with “massive sign-on bonus for new drivers”. In particular, the biggest and most effective effect is probably the billboards. With extremely attractive incentives and is clearly “Earn up to $ 1,000 per week”. They call for action by: “Just dial the number and start right now”.
Therefore, direct feedback marketing is not just about taking other people’s money but also letting you pay them (in exchange for something of value to you, such as time).
Optimize Facebook Ads
E-commerce advertising is a prime example of direct response advertising. Its goals are clearly expressed: “Shop Now” or “Buy This”.
Here is a good example from M.Gemi:
It clearly shows suggestions (shoes) and makes them special in the eyes of the customer:
“Family-owned specialist factories”
“Free shipping & returns”
“Pioneering a movement”
“The classic profile of a linger meets the comfort and ease of a skate”
Because they choose to advertise on Facebook, I assume they use targeting data to appear in front of potential customers and optimize marketing effectiveness.
If someone clicks on the ad, that person will immediately be redirected to their website. Looking at their actual link, you will see a series of UTM codes after the landing page as follows:
M.Gemi used a variety of other terms like First Time US Buyers to track and measure campaign results. From there, they can calculate the ROI and improve the numbers if it’s not good.
High-quality images and direct copy outlining the benefits of the product are also utilized.
Segment and target warm audiences with Messenger ads
Direct response ads are more effective if you target customers in the form of segments. This will bring more responses, and potential customers will act quickly.
The 4 major segments are:
Demographics: based on gender, age, race, etc.
Behavior: based on target customer actions and interests.
Buyer Journey: based on what the buyer has visited and their location on the channel.
Geography: based on areas that potential customers are interested in.
Why are these segments related to direct response marketing campaigns?
Assuming you’re trading in cosmetic products, you can send response ads directly to people interested in Vogue or other beauty brands. Another example is with brick and mortar shops, you can target local interest with attractive deals.
More importantly, you can send response ads directly to warm audiences. So who are they? It is the people who are subscribed to your Messenger list or who have purchased from your brand.
Direct response ads don’t always need to come from a cold audience. You can follow people who subscribe to Messengers like ManyChat. Thanks to this, you know more about potential customers and refine your ads to target them.
Users can use ManyChat to set the lead feature to better evaluate their audience. This helps you identify which leads are most promising. From there, submit ads that are more likely to be clicked and acted.
Using referral programs
To drive your conversions, you can take advantage of referrals. This is an extremely powerful direct response strategy. Audiences are excited to talk about their experience with your store. However, they need a push to take action. One study found that people recommended by friends were 37% more likely to engage with your store.
Since referrals are likely to pay quickly, many delivery services like GrubHub have redeemed referrals by providing credits. Putting money on both sides’ pockets through referral programs will motivate audiences to act quickly and enthusiastically - especially with food items.
Above is an article about Direct Response Marketing 101: Definition & Best Practices. With direct marketing, customers can exchange and reflect directly with suppliers or sellers without any intermediaries. It is perfect for small and medium businesses. This article has provided you with the crucial elements of direct response marketing and direct response marketing best practices and tips.
Get the information we have prepared and run an effective campaign. The success of a campaign will be reflected in the response rate. Hopefully, you find this article helpful. If you have any questions, we’re happy to hear from you.
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