How direct marketing works

What direct marketing means

Direct marketing is any marketing where you have a list of contacts and write directly to them. Traditionally, it tended to refer to direct mail – that is to say letters send through the post to a database. It began with the adoption of mainframe computers after the Second World War and then really took off with the introduction of microcomputers in the 1970s and 1980s, which let anyone with a PC on their desk mail-merge to their existing customer and also prospective lists of customers. The popularisation of credit and debit cards also helped fuel direct mail as customers could easily purchase goods and services in response to a letter, without needing an account with the supplier or visiting a store.
A related term is direct response marketing, which incorporates direct marketing but also refers to advertising that encourages a a response directly to the advertiser rather than to a reseller or shop. My first purchase in response to a direct response advertisement was for a 5.25″ floppy disk drive advertised by Watford Electronics in a computing magazine. I was 10. It cost about £150 and let me upgrade from loading and saving files on audio cassette! I ordered by sending a letter containing a cheque (somehow I managed to persuade the parents it was an educational investment, though I did do a GCSE in Computer Studies three years early, so I guess it helped). My best friend’s father came and installed the ROM chips that my computer needed to run the disk drive.
We have come a long way and these days most websites promoting products are direct response – it’s really the default of the internet. While there is still direct mail going on, it has fallen out of fashion with marketers. This is because of the increasing cost of mailing letters and the allure of new ways to market online, either directly to individuals or to segments of people who have shown interests (e.g. they’ve liked a group on Facebook). Much direct marketing today is email-based or involves personalisation online (Amazon shows me products that it thinks are of interest based on my past actions), or is by the phone. After all, Voip and competitive telecoms markets have curbed the cost of calling.

How to do direct marketing: hybrid mail, franking, stamps and more

The manufacturing of direct mail varies from looking very personal at one end of the spectrum to being very efficient. I have done a wide range of types of direct mail campaigns – including those with cream paper and envelopes, genuine stamps and handwritten “Dear Mrs X” and a handwritten signature at the end – in fountain pen. I can tell you that they have a strong response rate. On the other hand, they take forever to produce in quantity and it is difficult to justify unless your mailing list is made of low quantity, high value prospects.
Many smaller direct mail runs (say, up to 1000 letters) get done with window envelopes and the postage franked. Franking machines (aka postage meters) are available from companies such as Pitney Bowes, Neopost, Frama and PF Mailling. They give a discount on the postage, and they are fantastically useful if you need to send all sorts of different types of items. But I have to say it’s now a bit old school to send very large quantities through one of these machines.
Hybrid mail is the name given to services where you install a printer driver on your computer and the letter is sent not to your office printer but to an external mailing company, like Docmail or Whistl. They are churning out millions of letters and yours simply go out without fuss on an A4 piece of paper and in an C5 window envelope (that’s the envelope equivalent of A5). The mailing company adds a barcode under the address which tracks the letter and if the letter is returned to their standard address printed on the flap of the envelope, you can find out which addresses are no longer valid. These hybrid mail companies can also send postcards.
The downside of hybrid mail is that it’s very standard – you have no ability to add branding to the envelope or choose paper stock. It is hugely popular for transactional letters or where cost is the priority. I don’t think you’ll beat it on price, and it’s relatively low hassle and quick to set up. But I wouldn’t use hybrid mail where there is a gatekeeper in the form of an executive assistant, as the mail looks mass-produced and is likely to go in the bin. However, marketers often want to build excitement about the contents of the envelope, so using a printing company with mailing facilities or a dedicated mail house is a great option if you are printing in quantity. They will have discounted pricing for the postage compared with a stamp, such as through Royal Mail Advertising Mail, Whistl or UKMail. What’s more, you’ll have complete control over how the finished product looks.
If sending direct marketing by email, there are a number of options. Services like Mailchimp don’t let you send (legal) unsolicited messages to B2B prospects – you can only use their service to write to people who have explicitly opted in. If you run your own company mail server you can what you like. But most companies these days prefer a cloud hosted email service. Office 365 limits users to sending 30 messages a minute, and no more than 10,000 recipients a day, but I can’t see anyone doing legitimate B2B work needing more than that. Using Microsoft Word’s mail-merge facility and a list in Excel, you can mail-merge emails that get sent straight from Outlook – no extra tools needed. Alternatively, a tool like MaxBulk Mailer, which runs on Macs and PCs, gives more flexibility.
Personally, I am a serial blocker of people who send me non-personalised bulk sales emails. I think people are pretty clued up as to whether a sales email is personalised or not, and tend to resent bulk mail being sent to them from companies they don’t already know. And research by Gartner has found that the most effective B2B salespeople are those who take a “challenger” approach and try to educate prospects with a new way of thinking about a problem, which seemingly hasn’t been read by the bulk of people who spam corporate inboxes.

Is direct marketing a legitimate interest under GDPR?

The General Data Protection Regulation was introduced in Europe in 2018 and is incorporated into UK law under the Data Protection Act 2018. This affects everyone marketing in the EU and UK and has made people wonder if they can continue to send direct mail. Can you still do direct mail to consumers in Europe? Well, it can count as “a legitimate interest” and you can mail people through the post without explicit consent if you meet the criteria (see the Data and Marketing Association’s advice on the subject). Relevant business contacts can also be written to, and you can also email them without explicit consent if you act correctly. You should get advice on your exact circumstances from your company’s Data Protection Officer, a direct marketing trade body or a lawyer. When GDPR came in I did the Institute of Data and Marketing’s GDPR Award course, which was really helpful.

Is direct marketing effective?

Direct marketing can get you in front of the right people, and that is at the core of it effectiveness. It’s easy to measure the results of direct marketing (compared, say, with billboards), so companies tend not to keep doing it if it doesn’t work. However, as with all marketing activities it depends on what you are using it for and your approach. Some people are very difficult to market to except directly – for example, if you wanted to sell to Chief Information officers and IT Directors in large companies, buying or creating a high-quality list of these people and writing to them and trying to get the on the phone would be a sensible approach.

Advantages and disadvantages of direct marketing

The advantages of direct marketing are that:
  • Businesspeople get almost no post these days, so it’s easy to stand out by sending mail through the post.
  • It can be personalised for the individual based on their past purchasing habits.
  • People can take more notice of something send to them directly rather than “wallpaper” advertising.
  • Physical items are better at creating emotional connections than stuff on a screen.
  • Most importantly of all, it’s targeted. That means that if your product or service is of interest to just some people then you are not wasting your money talking to everyone.
The disadvantages of direct marketing are that:
  • Direct mail has an environmental cost in manufacturing and distribution. It obviously uses energy to transport by road and perhaps by plane. Some printers will use vegetable rather than chemical inks, and there are good options for paper stock including Forest Stewardship Council certification and recycled.
  • Because direct mail is unfashionable among marketers, the knowledge base to do it well is in short supply.
  • Postage costs are much more expensive than previously.
  • Email marketing can be annoying to the recipient in a way that post never was.
Tips for effective direct marketing
  • If buying mailing lists, test them out on a small scale to see if the list is high quality. I’ve experienced the strangest quality issues, such as a magazine publisher selling its list of current subscribers only to find someone I know on the list saying that they haven’t subscribed for seven years. Lists deteriorate.
  • Litter the letter or email with the word “you” as it keeps people’s attention.
  • Include the call to action throughout the letter.
  • Include quotations from happy customers or independent authorities on the subject.
  • Subheadings and bullet points work well and help readers scan the letter for the bits that interest them.
  • Multiple page letters are a great opportunity to make a complete case for a purchase. On email, if it’s relatively short, make sure you are linking through to lots of information (such as videos, feature lists, comparisons, and reviews) that helps explain the benefits of the product and service.
  • Having multiple different asks causes friction and reduces response.
  • If writing cold to a business contact, always make an email look like an ordinary email sent from Microsoft Outlook. If you’re a clothing store emailing your database of customers, then you’ll want to make it look more visual as it’s the images that sell.
  • Include a P.S. at the end of the letter include an argument for a response – e.g. mention it’s a time-limited offer or a reference to “social proof” such as that 95% of the Fortune 500 use this service.
  • In my experience, you should be getting a 1% to 4% response rate for a letter through the post, and nought point something for email (from a bought list).

Social media marketing vs direct marketing

Social media tools such as Facebook and LinkedIn let you target people based on their job, industry or interests. This lets you market to people without the expense of buying lists or waiting to build them organically. It also has the benefit over direct mail of reaching people with a medium where they can simply tap or click to get through to your website.
The decision of which approach to take comes down to how easy it is to get and use a targeted list. For example, post-GDPR people might have a big customer database (of consumers) but without explicit consent to send them marketing communications – in which case being able to target similar demographics and interests with Facebook ads lets you get going with marketing in a targeted way without breaking the law.