Direct Marketing

Direct marketing is a form of marketing in which marketers promote products directly (or individually) to potential customers through addressable means. This contrasts with advertising methods (aka mass marketing) in which products are promoted through mass-media, billboards, magazines, etc., to public. Since direct marketing promotes products to customers indivisually, it is possible to collect information that can be used to measure effective-ness of marketing campaigns and customer preferences.

Direct Marketing Channels

Direct marketing delivers product information to individual customers. Any medium that can deliver product information to individual customers can be used. Most common direct marketing channels are as follows;

• Postal Mail

  Postal mail is the most commonly used medium for direct marketing. Product information is sent to customers directly through postal services. Postal services often provide bulk mail rates to direct marketers, which will reduce marketing cost significantly. Note that unsolicited mails form junk mails.

• E-mails and SMS Messages

  Emails and SMS messages are becoming increasingly popular. The big advantages of this media is that they are low-cost and quick in responses. They become so popular, now they become a subject of anti-spam laws.

• Tele-marketing

  Tele-marketing approaches customers using telephone calls. Telemarketing can be more effective than above media in selling rather complex products that require convincing explanations. However, as telemarketing becomes increasingly popular, people starts to react negatively. To counter this trend, government operates "Do Not Call This Number" systems.

Customer Selection Methods and Analytic Tools for Direct Marketing Analysis

A major problem with direct marketing is unwanted promotions. Customers can be easily inundated with catalogs that may not interest to them. For marketers, unwanted promotions constitute cost which has no benefit. So well targeted marketing is required. Targeted marketing aims to conduct economical marketing effort to improve sales profit. To maximize sales, the simplest solution will be to send to all customers. However, this will incur excessive sales cost and can erode profit from sales significantly. The most desirable case is when all and only customers who will respond will receive sales offer (or product catalogs) and all of them respond to sales campaign. This goal is very difficult to achieve fully. There are several ways to lower cost while maintaining high responses. This is often referred to as targeted marketing strategies or targeted marketing techniques. The following pages discuss targeted marketing approaches in detail;

- Direct Mail Marketing - Catalog Sales
- Database Marketing
- RFM Marketing
- Shopping Basket Product Link Analysis to Support Suggestions

Data Mining Tools for Direct Marketing

Try CMSR Data Miner for Direct Marketing. Downloads are available from the linked page.