Viral and Direct Marketing

The marketing approach techniques are countless. There are many ways to approach the potential customer. There are two marketing approaches that are very interesting, due to their specific techniques. They are viral marketing and direct marketing.

The Viral Marketing is a marketing technique that is using the social networks, both online and offline, for transmitting the message or advertisement, through self replicating viral process. This process resembles to spreading computer viruses or biological viruses.

Almost anything can be the subject of viral marketing effect: information, web link, video clip, e-Books, etc.

Methods of viral marketing expansion can be:

Word of mouth – simple communication between people who knows each other.

Social Media such as Facebook are the perfect examples of viral media. The number of people who are using these services is huge. The members of these social media environments are connected very well, since every user has many contacts. Finally, method of sharing idea or message is very simple, through different sharing techniques.

“Invite Your Friend” calls from different e-services. These messages that provokes the actions are moving significant part of population who wants to share the message, but they are not willing to invest effort.

Advantage of viral marketing is that it takes very little or no investment. The viral marketing system is powered by the will of transmitters to pass the message further. The power of exponential growth is tremendous. If every person is distributing the information to 5 people and further, this gives are 3.125 informed people after 5 levels from original message transfer. The viral marketing experts know this formula very well, therefore, the viral marketing is part of marketing techniques portfolio.

Disadvantage is that viral marketing is not reliable as a standard method of information transfer, since it is not likely that every idea will be transferred at the same rate. Simply, the outcome of the viral marketing campaign is unpredictable, since the power of campaign depends of many parameters.

Also “viral competition” dictates the effectiveness of viral campaign. If two similar campaign are present at the same period to the similar audience, it is likely that the social group will transfer the message that seems more interesting at the moment.

There is no secret formula for guarantied success of Viral Marketing campaign, but good ideas, with tone of humor, anticipation and value adding elements can help the viral marketing campaign to succeed.

On the other hand, Direct Marketing is a sales method where advertisers approach potential customers directly with advertisement, products or services. The most usual methods of direct marketing are telephone sales, solicited or unsolicited emails, catalogs, leaflets, brochures, direct visits etc.

There are two main differences that distinguish it from other types of marketing. The first characteristic of direct marketing is that the message is transferred directly to consumers, without use of intermediate communication media and mass media campaign. The second characteristic is “call to action” principle of communication to the consumers.

Direct marketing is attractive to many companies since the campaign results can be measured directly. For example, if a marketer sends out 5,000 messages by mail and 250 respond to the promotion, the company easily calculates that campaign gave 5% response rate.

On the other hand, the measurement of other media ( TV, Radio ) must often be indirect, since there is no measurable calculation of message recipients. Measurement of results is a key element of every activity.

Direct marketing is practiced by businesses of all sizes – from the smallest start-up company to the multinational corporations. The decision of using of direct marketing approach is not related to the size of the company. If the niche of targeted population is too small, the direct marketing may pay off more than large scale advertising campaign.

The Direct Marketing and Viral Marketing have completely different approach. The power of both marketing approaches can be leveraged, depending on the situation. Every person is the potential shopper, it only takes a little to trigger the shopping mechanism.

Direct Marketing Essentials – Buying and Negotiating Media

Every business has a vast array of media options available, which includes both Traditional Media such as TV, magazines, radio and magazines and New Media which includes the internet, emails, search engine marketing, viral campaigns and link building strategies.

But no matter what product or service you offer, you must do a decent amount of research to determine how best to spend your advertising budget. This includes researching the target market and understanding what type of medium will work best to reach the largest amount of customers using the most effective method.

But as this blog is part of a direct marketing series, I am only going to concentrate on effective media buying from the most popular direct marketing channels which tend to fall under the ‘traditional media’ umbrella. But due to the importance of the internet marketing nowadays, I’ll have to dedicate a separate blog to this essential marketing medium down the track.

Direct Mail

I would have to say that direct mail is the most important DM medium. The reason why it’s so good, is that unlike other forms of marketing channels, you don’t have another medium carrying your message for you. With direct mail, you have total control over the branding and communication of your message.

Direct Mail is the perfect blend of both advertising and sales. It allows you to present your product and service in a non-competing landscape, communicate directly with your target market while making an attractive offer, which helps to close the sale, all in one convenient envelope or package.

The key aspects to remember before you spend too much on your direct mail campaign are as follows:

  1. Match your existing customer profile as closely as possible before you rent a list. These include psychometric, geographic and demographic factors. If you don’t have any customers, then you need to undertake some basic marketing research.
  2. Always rent your marketing lists before purchasing them outright. This allows you to test and measure the effectiveness of the list before roll-out. There is also no harm in asking for a discount when trialling a list. Many list rental companies may even waiver the set-up fee as a once-off.
  3. Make sure you only select the most important criteria for testing the campaign. Don’t just test for the sake of testing, but look at key factors which provide the most effective means of getting a sale from your target market.

Magazines and Newspapers

Here are some general guidelines for choosing and buying the right magazine for your business:

  1. Overall, I believe that frequency is a key driver in generating direct sales. Expect a good discount if you ran multiple ads in a publication.For newspapers, you need to consider the ad size and section of the newspaper. For example, an obvious choice of a travel product would be to go into the travel section. Although I have had previous success advertising a travel product in the business section of The Age, as there is no other competition to consider in this space.
  2. You should test to establish the best publication. A scenario has been outlined for a Travel Insurance product in the attached spreadsheet so you can follow the calculations used to ascertain how much profit you can obtain from a publication: Measuring the Profit Index. You can even use this as a negotiating tool when buying advertising space in similar publications based on past results.
  3. Measure the success by the response generated from the magazine circulation, not by the people reached. I feel that a publications reach can be somewhat over inflated, but circulation is exact.
  4. Competitors who consistently appear in the same publications give a good indication that the publication is working for them. You can learn from your competitor’s experience.
  5. Think about getting some bonus space to run a phone number or call to action message within the same publication to help lift response rates.
  6. Consider audience lifestyle and the reading habits. For example, you don’t want to put a coupon into a magazine that people are going to keep – it just ruins it!

Inserts vs On-page Advertising

Once you’ve chosen the media, this opens up the door for you to consider the different executions for your product or service. It would be worth your while to test stitched inserts vs loose inserts vs on-page advertising. Just remember the following key points beforehand:

  1. Inserts are intrusive. You have to be fairly tactile and you would expect the reader to do something with them. i.e. coupons are generally used on inserts.
  2. Loose inserts automatically fall out of magazines and can get thrown straight into the bin. But magazines automatically fall open at stitched inserts. So you have to make it stand out!
  3. Inserts are more expensive, but they generally convert better than on-page advertising. This is because the pass-on value is higher, plus people can hold onto an insert longer than the publication.
  4. For on-page advertising, you may wish to test right vs left page, or multiple vs single page advertising. It is important to measure the cost per call, and the cost per sale to help improve advertising efficiencies.

Television

Television can definitely work for direct response marketing. Here are a few tips to get you started:

  1. The key point is to be flexible with placement and to have the opportunity to test at different times.
  2. Prime time viewing is great for branding and awareness and off-peak is better for direct response. Although if you can negotiate off-peak rates for prime time then I’d definitely test it.
  3. Often fringe spots pull in a greater response than prime time, as consumers are generally engrossed in a high rating program.
  4. Sometimes you will be able to negotiate your TV advertising on a per inquiry basis. This means that you only pay on a response basis.
  5. By introducing top and tail commercial breaks. This means you run an awareness ad at the beginning of the break followed by a response generator towards the end of the end of the same break.
  6. TV advertorials are considered an inexpensive way to provide a detailed message with call to action.
  7. A well known personality endorsing your product or service will add credibility, as long as your personality is relevant to the product/service you’re trying to sell.

Household Drops

Many small businesses still include household mailbox drops as part of their overall marketing activity. Unfortunately you can’t judge how many people are going to put stuff in the mailbox on a day-to-day basis, which makes it very difficult to plan effectively. But here are a few tips to consider before you head down this path:

  1. Planning your distribution is essential. Generally household drops result in lower response rates, which is why targeting the correct audience is absolutely imperative.
  2. Don’t let your branding slide with this medium. Ensure your brand image is maintained and your product/service is positioned correctly.
  3. You could even use radio or press as pointers to alert your target audience to the household drop to help boost response.

Leveraging the Media

Now that you have an idea of some of the planning considerations and what type of deals you could negotiate for traditional media, I’d like to wrap up with some over-arching guidelines on how to leverage all media from the outset.

Knowledge is Power: Your buying power and negotiating skills will increase once you start testing the market and dealing with account managers. You know what works for your business. The media doesn’t! So ensure you are hard-nosed when negotiating with all media. If you have trouble negotiating, then here are some pointers to get you started:

  1. What we’re doing is working already, why should I go with you?
  2. We’ll test for free. If it works then we’ll commit to a longer term campaign.
  3. Advise the media that you have ‘distress’ funds available for testing.
  4. Try to secure a royalty deal and only pay for the number of inquiries.
  5. Get the media competing with each other for the best deal, while keeping the majority of your budget fluid all year.

Contingency Planning For All Events

Every small business marketing campaign should have a back-up plan for when the unexpected arises out of nowhere. If, for example, Australia Post decides to go on strike for three months, then you may have to utilise telemarketing to help achieve your sales targets. In turn, you will have to revise your marketing budget and revenue forecasts to cater for the additional expense of telemarketing.

Planning also involves considerations when response rates exceed your expectations. This can be overcome if you incorporate some of the following practices:

  1. Be flexible with your media buying. Buy on a short-term basis and increase media frequency if the ROI is good.
  2. Make your campaign time limited.
  3. Set limits for your customers. E.g. Offer limited to the first 200 callers.
  4. Keep your database clean and up-to-date and avoid costly dead mail. Your database should be no more than 6 months old.
  5. Plan your budget to increase activity if required. Sometimes it’s better to get extra brochures printed in the event your direct mail campaign takes off!

Direct Marketing Tips For 2012

Direct Marketing Climate

The background of direct marketing can be traced back to the 1950’s as businesses sought to sell direct to customers rather than through shops and retail outfits. As a result the trend has diversified into a wide range of marketing tools that businesses use to send direct and subconscious messages to consumers and businesses.

This could be through offering a free phone number on a website, to give customers the illusion that calling will be free of charge. It could be through offering a ‘this is a limited offer’ giving the customer the feeling of urgency to buy. It could be through a discounted offer to give customers the feeling of getting a bargain.

Retail Companies Using Direct Marketing

The retail sector for years has been using direct marketing tactics (as above) to encourage customers to buy now.

  • Buy now and pay nothing for 6 months
  • Buy 2 get 1 free
  • Limited stock, get in quick
  • 60% off this week only

Many retail companies do use cost as being an incentive for customers to buy (discounts or bulk buy) so that customers feel like they are saving money by spending money (sometimes by purchasing products that are not essential for life, but just because they are getting a deal).

Many retail companies do offer finance deals for higher cost products (furniture, cars, white goods etc.) to give customers the help they need in purchasing their products and eliminating the cost factor (normally the biggest objection to selling).

Finance Companies Using Direct Marketing

The financial sector is pushing for sales at the moment due to the economic downturn; therefore banks and finance companies are offering deals based on direct marketing tactics:

  • Invest £16,000 now and get £1,000 free
  • Free overdraft for new accounts
  • Free travel and home insurance for all new accounts

The financial sector is working very hard at the moment and faces much of the same difficulties that other areas of business face, that people are reluctant to commit due to buyers block.

Changes In Direct Marketing

Most people in our society are wising up to the so-called offers, sales, buy now pay later deals that companies use due to them being so common. It is rare to walk into a shopping center without seeing signs promoting a ‘Sale’ for end of line, Christmas, Easter, Summer or any other reason. The media has given bad press in the past to retailers promoting sales that are not in the customers interests; therefore people are wary.

Businesses around the UK are adopting different advertising and direct marketing tactics in order to boost customer confidence and most of this is based around cost. Christmas 2011 saw slow sales and the January sales (which started on Boxing Day) saw businesses slashing their prices to get people spending again.