Direct marketing involves approaching potential customers directly with products or services, often through telephone sales, emails, and mailed catalogues. Businesses compile large databases of personal information about prospects and customers to create a customer profile. Direct marketing can be more effective and personalized than traditional advertising, but it can also lead to customer overload and privacy concerns. Self-policing associations and regulations, such as opt-out lists, help to prevent fraudulent or invasive use of databases. Customers have the right to unsubscribe from unsolicited catalogs and block bulk emails.
Direct marketing is a sometimes controversial sales method through which advertisers approach potential customers directly with products or services. The most common forms of direct marketing are telephone sales, solicited or unsolicited emails, and mailed catalogues, flyers, brochures, and coupons. In most cases, the goal is to inform customers about products or services they may need without waiting for customers to initiate contact. Especially online, the practice has received a lot of criticism when it comes to personal privacy and data tracking. However, the practice is very successful, which motivates many marketers to continue despite the possible risks and disadvantages.
Importance of the database and profiling
To be successful in direct marketing, businesses usually need to compile large databases of personal information about prospects and customers. These databases are often sold or shared with other marketing conglomerates. Most databases are computerized, making them very easy to update as consumer information changes. Things like purchase history, address, and average income can all help shape a prospect’s marketer profile.
How information is collected
Different companies have different ways of getting customer insights, but the process is often easier than it sounds. Journal subscriber lists, association records of associations, and professional conference attendance lists are often publicly available. This data can give marketers a basic idea of what interests particular people are. School registration information, geographic information such as postal or zip code, and approximate annual income are also often available from tax records. On the Internet, marketers can sometimes collect data based on web pages viewed or purchases made.
A more personalized way to reach customers
For many businesses and service providers, especially those that are small or highly nuanced, traditional forms of advertising – radio, newspaper, television and the like – may not be the best use of promotional budgets. For example, a company that sells a hair loss prevention product for men should find a radio station whose format caters to older male listeners who may have this problem. There would be no guarantee that this group would hear that particular station at the exact moment the company’s announcements were being broadcast.
Direct marketing, in contrast, would allow the business to pre-screen customers who fit the right demographics. These people could be targeted with specialized mailings or telephone solicitations. This way, the business could spend the same amount of money on advertising but reach a higher percentage of potential buyers.
Customer overload and other negatives
Many people are unaware of how the personal information they include in an order form or survey can be used for targeted advertising at a later date, which can open up the direct marketing industry to criticism – people usually want to full disclosures about how their information can or will be used before providing it. A prevalent philosophy in direct mail circles is the idea that if a customer orders an item, such as a swimsuit from a clothing catalog, they might naturally be interested in related items such as pool supplies or exercise equipment. This could lead to direct marketing overload as potential customers are overwhelmed with catalogues, junk emails and unwanted phone calls.
There is also concern that personal information collected by legitimate direct marketing agencies may be purchased by unscrupulous companies for the explicit purpose of fraud. A marketer who knows a lot about a potential customer may try to use that information for crimes such as bank fraud identity theft.
Online privacy concerns
Some of the harshest criticisms of direct customer marketing relate to the online space. People who engage in online shopping or even just casual web browsing usually don’t like the idea of their movements being tracked by companies hoping to sell them specific goods or services. Many privacy experts and advocacy groups have tried to lobby for rules against aggressive online tracking in order to preserve personal privacy.
Sector regulation
Many direct marketing companies belong to self-policing associations that actively discourage fraudulent or invasive use of their databases. Legitimate direct marketing companies also offer methods by which people can “opt-out” of on-demand advertising lists. In the United States, the “non-domestic call list” is an example of successful industry regulation. That list, which is maintained by the Federal Trade Commission, allows people to permanently opt out of targeted phone inquiries.
In most countries, customers also have the right to unsubscribe from unsolicited catalogs and to block bulk emails from their mailboxes. Numerous anti-spam and anti-tracking initiatives are also prevalent online. Customers usually can’t completely prevent targeted marketing, but they can often go a long way to helping keep the information stored about them in check.
Protect your devices with Threat Protection by NordVPN
