Direct Marketing

As can be illustrated by the variety of messages everyone receives each day, Direct Marketing can take many forms.

Historically, the most prevalent methods have been telesales/telemarketing and direct mail. Other communication channels used for Direct Marketing now include e-mail and personalized web sites, where messages and promotions are tailored to each customer or visitor on a 1 by 1 basis.

Direct Marketing is big business, accounting for approximately 50% of the marketing dollars spent in the U.S. each year. The $60 billion spent on inbound and outbound telemarketing in the United States during 1999 generated $460 billion in sales of goods and services and employed approximately 8.7 million people. Over $40 billion was spent on direct mail promotions.

Direct Marketing is obviously in-style, and it is interesting to note that its close cousin, "brand/broadcast marketing," in the form of large brand building/awareness ad campaigns, has lost some of its luster.

Interestingly, the renewed focus on Direct Marketing is not being driven by any new strategic marketing insights or by any long-held beliefs that have been challenged. In fact, most Direct Marketers have historically agreed with a key central idea: Each customer's FULL profit potential cannot be fully realized until the marketer completely understands each individual's unique needs and preferences.

The problem Direct Marketers have always faced has been the high expense associated with gathering, tracking, and digesting customer information at such a finite level. Additionally, it was impossible to make this information practically actionable - to determine which offer to give to each customer in order to satisfy them and achieve the maximum profit out of the interaction.

This was an immensely complex task. During the past 10 years, technology has been catching up, setting the stage to deliver a step function improvement in the way that Direct Marketing activities are planned and executed.

Many of these technologies have been developed within a broad solution set known as Customer Relationship Management (CRM). CRM, in a nutshell, is an approach to understanding and influencing customer behavior through meaningful communications in order to improve customer retention, customer loyalty, and customer profitability. CRM encompasses not only Marketing, but all touch points with a company, including Customer Service and Support. It is a holistic way of looking at the customer.