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Accounting is Just the Beginning

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Direct Marketing – An Essential Tool for Small Business

Small business is about identifying and servicing niche markets. If you know what your niche market is you have a fantastic marketing opportunity already at your doorstep – as long as you know how to reach it.

Knowing where the market is and how to reach it should all be written in your marketing plan. This is where you include all the information about the market in which you operate – what you’re selling, where you’re selling it and for how much, who else is selling it, who wants to buy it and who your specific target audience is.

Your marketing plan should also include how you are going to tell people about your products or services. The way you choose to market your business could easily determine how successful you become.

Marketing target

Advertising versus direct marketing

Where general advertising builds awareness and creates a positive image for a new product, direct marketing asks straight up for the order. It’s about going straight to your target group, often with a personalised letter, and giving them a direct opportunity to buy.

Direct Marketing is not advertising. It is selling to existing and potential identifiable customers and its result is measurable.

The whole concept of direct marketing is that it is direct communication to a particular target: either a current customer, former customer or someone who you believe fits the characteristics of your current customers. General marketing, on the other hand, is not addressed to any particular customer.

But for direct marketing to be successful, the business must have a database. This is where you collect as much information as possible about your customers – their demographics (contact details, age, occupation), how often they buy, what they buy, how much they spend and so on.

When planning your direct marketing campaign, decide which type of customers you want to approach. Whether it’s your top customers, or particular customers you think will genuinely be interested in the product you are promoting, the database should be able to tell you which customers to target.

Direct marketing, which can also use email, telemarketing or personal visit as a means of delivering the message, is a very powerful tool for small businesses because they can:

  • concentrate and dominate niche markets
  • generate additional sales from existing customers and new customers
  • generate sales leads from groups of persons who are very similar to existing customers

Test your product or service

Before embarking on your campaign make sure you are completely satisfied with the product or service you are selling to your customers. The last thing you want is for these customers – especially your top customers – to go somewhere else because of a faulty product you tried to sell directly to them.

Decide on a theme to be emphasised – keep it simple and focused; don’t fall into the trap of cramming too much information into the letter. Highlight one important aspect of the product, for example, price, quality, uniqueness, and use this as the theme throughout the letter.

You’ve got to keep the person reading from the opening paragraph to the order form.  Once a reader loses interest, it is likely the business will lose a customer.

As the responses from direct marketing are measurable, you can experiment with mail-outs on different themes sent to different groups of customers and analyse which strategy works best.

Next Steps – Plan Your Direct Marketing Campaign

  • Set-up a customer database – All direct marketing campaigns need the support of an up-to-date customer database
  • Determine your ‘top’ customers – The most successful direct marketing campaigns are likely to be targeted at your top 20% of customers who generate 80% of the business
  • Know your customers – Target other segments of your database depending on what you are offering for sale, as specific products or services will be attractive to some customers and not others
  • Plan your campaign thoroughly and test the product or service being offered
  • Maintain a theme throughout the letter. Keep the message simple, brief and focused
  • Make an offer they can’t refuse. Remember the ‘what’s in this for me?’ question
  • Contact New Zealand Post for information on mail-out discounts and for a record of the number of business and private households in each postcode throughout New Zealand
  • Measure the results of the direct marketing campaign. Think about trying something different next time and compare results

Tips on Effective Mail-outs

There is less chance of people reading your literature if it screams out to them:

                   THIS IS JUST ADVERTISING MAIL!

To overcome this:

  • Put your direct marketing letter into a plain envelope with an actual stamp and a hand written, or laser printed, name and address – not a label
  • Be absolutely correct with spelling of names and addresses as errors can really infuriate people
  • Use testimonials wherever possible in the letter
  • A photograph might be useful – make sure it includes people
  • Don’t approach too often as this will annoy customers
  • Freephone numbers can make it easier for your customers to contact you
  • Follow up phone calls – various surveys indicate following up phone calls can significantly improve the overall response rate

If you need help with your marketing contact Nick on 0800 ASK NICK or email nick@abac.co.nz.