Direct Marketing 25 Shocking Facts & Profound Insights!

The facts and insights about direct marketing I am sharing with you guys are coming from well reputed research journals, institutions, authorities in the field, means facts you can take to the bank!

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I can assure everyone 99.9% about authenticity, authority of these facts, insights and to dig more about each and every fact mentioned here, you guys should check articles in the references!

Why I am insisting on credibility, veracity of these facts?! Well because first it took me almost five weeks to research all of them, this means real effort second I bet you, if you pay attention, thoroughly understand it and utilize it in your business you can get some real solid results!

Let’s start with the definition!

Direct Marketing Definition

Well it doesn’t mean most of you guys don’t have any idea about direct marketing, but you know its internet and around two billion people are online at present [36], obviously all of them aren’t hot on direct marketing and all this business thing as you guys!

So I got to help them out, this is why it's called easy marketing!

According to google.com Direct Marketing is “the business of selling products or services directly to the public, e.g., by mail order (& email) or telephone selling, rather than through retailers.”

I guess this one is easy, sufficient!

Benefits or Special Competencies of Direct Marketing

Before getting into the "crazy facts" ;p, I believe you guys should know about some special competencies that direct marketing has that no other marketing approach can offer [12], yeah for real!

Here ...

1.      Precision Targeting
2.      Personalization
3.      Call for immediate action
4.      Invisible strategies
5.      Measurability

Well talking about the first two competencies, we all know we can do precision targeting with direct marketing, everyone knows that unless you are new or crazy and want to shoot tons of mails/emails to almost any human looking thing, plus you can personalize your message design, content, like calling your customer by name, job title (in case he/she is your business client) in mail/email or via telephone call.

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Coming to call for immediate action, we all read things like “limited time offer” “your prompt reply is requested” etc in our mails/emails etc and invisible in a sense, your competitors don’t have any clue whatsoever about the approach, method you are utilizing to get sales unless your competitor sneaks into your mailing list.

And you can measure in a sense, you know, what message, call to action, design, time, offer etc is working with a specific market segment and how much have you been able to capture from it in terms of sales, profits etc.

That's all, now let’s get to the facts!

Direct Marketing VS Mass Marketing (FACT # 1)

According to a research due to enormity of mass marketing (marketing clutter on tv, newspaper, radio, internet, offline…) target consumer has become less interested in mass marketing with response rate just around 1% [1][2][3][4].

In such situation you have two options to get better response rate

1.      WOMM or word of mouth marketing
2.      Direct Marketing

For WOMM check this amazing piece Word of Mouth Marketing 20 Crazy Facts to gain rich insight, coming to Direct marketing, again research indicates “Direct marketing produces more sales on each dollar spent compared to mass advertising (mass marketing).” [5]

So if you are a small business or you want to prove yourself to your employer as an expert in marketing with healthy ROI then in that case the least risky and the most solid option for you to market your products/service is Direct Marketing.

I mean look at all these researchers and their findings, you really think you can do fine without direct marketing ?
    

Mass Mailing Vs Direct Mailing (specific mailing) Fact # 2

Now when it comes to direct marketing it doesn’t mean that you just shoot out thousands of undifferentiated mails either by mail or email (mass mailing campaign) rather it means targeting a specific market segment with a specific message or a value proposition that kind of resonates with your target market consequently pushing them to buy your product.

Here is a piece of research that highlights its importance, do read that paper for further study, it provides a step by step approach on how to identify the target market or likely buyers from huge set of data and how to target (via direct mail) and assess their response.

Here is piece of info from that research paper which highlights the effectiveness of Direct Mailing in comparison to Mass Mailing [4].

Direct Marketing & Internet (Fact # 3)

Research indicates that over 72% of direct marketers now conduct transactions online, with an impressive 43 percent reporting profit from their online campaigns [6].

Yes, these are the “facts & figures” if you want to focus on internet direct marketing and if you really are serious about it, then you should read the next fact (winks!).

Direct Marketing through Internet (Fact # 4)

Now if you are planning to go for direct marketing through internet like email marketing, highly specific web advertising then here are some facts, research shows that web advertising (email marketing, pay per click ads, contextual specific ads etc) is the least expensive form of advertising in the U.S [7].

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And within internet direct marketing (according to another research) “Results indicate that respondents react negatively to untargeted “cyber-junk (banner ads, pay per click ads, mass mails etc)” but are more favorable toward targeted marketing communication efforts (specific direct mailing) [8].

So if you want to do online direct marketing then as per above facts, healthiest option for your business is email direct marketing.

And also that would mean if you aren’t able to harvest healthy ROI (return on investment) in direct email marketing then 

1.      There is something gravely wrong with your content of email aka message
2.      You haven’t identified the right market segment to target (faulty research)
3.      You didn’t carry out the whole direct email marketing in effective manner (faulty approach, skill deficiency, wrong timing …)

Direct Email Marketing & U.S based Customers Demographics (Fact# 5)

Okay so you have decided to go for direct email marketing, now you are wondering about your target market, if they really use the internet, email, their age, and how much household income they have etc.

In a nutshell you want some real solid customer data!

Well digging just that, demographic info or data (of your target market) can be really costly esp. for new small business owners and for those affiliate marketers, so here is demographic data of internet users in USA, brought to you by PEW research [9]. 

Yeah I know!, these stats are only relevant to U.S. based business, well don't worry there is more!

Direct Email Marketing & Worldwide Internet Users Demographics (fact# 6)

In case you are wondering about internet users worldwide, here are little statistics [10]

See I told you there is more!

You can see that the bulk of internet users lies between age of 25-34 & 15-24 so if your target market lies in this age group and you want to go for online direct marketing then as per statistics you should and as per gut feeling… that’s up to you… but facts says you should, so are you going ? better you should (winks!).

Internet Direct Marketing & Customer Privacy (Fact 7)

Research indicates [11] that customers who shop by mail, 65% of them are quite concerned about their privacy and rest of the 45% doesn’t care much.

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Interestingly that 45% doesn’t know almost anything about name removing from mailing list and have the following attributes.

1.      More likely to be young
2.      Less likely to be well educated
3.      Less likely to have shopped by mail
4.      Less likely to be concerned about privacy compared to those who are aware of name removing
5.      More likely to be African-American

What this research indicates actually is, if you are dealing with a customer who wants his or her named to be removed from your direct mailing list, that individual is more likely to be well educated, old, shops quite often by mail and more likely to be non African American.

Direct Marketing & Privacy (Japanese Vs American Customer) Fact # 8

Well I guess Japanese are more educated then Americans (laughs), because research shows that Japanese are more concerned about privacy compared to American Customers [18].
   

Direct Mail Open Rate Fact # 9

Research indicates that 44% of direct mail is never opened [19]! Hmm… so I guess the usual 1.1% to 1.4% response rate for snail mail and 0.03% for email is quite reasonable after all!
   

Direct Mail/Email Response Rate Fact # 10

The usual response rate (according to research of Direct Marketing Association) for snail mail is 1.1 to 1.4% vs email 0.03%, remember that snail mail costs $600 per 1000 pieces while email costs almost nothing! [37]
 
Similarly Research at Harvard shows the following response rates for customers from loyalty database or customers who are in loyalty program [21]
 

Direct Marketing Type	Response Rate
Direct Mail	25%
Direct Email	23%

That means if you have huge number of customers in loyalty program then you need to do the math and see which one of the two will result in more net profit!
     

1.47 Million Emails Per Month Fact # 11

That means 44% (in reference to fact # 9) of emails (1.47 million) [20] sent per month (in U.S.) are wasted, complete waste of time, waste of resources.

Direct Mail & Young Generation Fact # 12

So what you think, which one would current young generation prefer? Email or mail? .. sound obvious.. email!.. hmm.. WRONG!

Well here is what research states, 92% of young shoppers prefer “mail” instead of “email” [33], seems like old mail box is making a comeback, perhaps got to do something with nostalgia, good old days without iphones, internet, Justin Bieber, full of joy, family thing?!

Btw I have no problem with JB! Just so you know ;p!
   

Direct Mail Future Reference Fact # 13

Another research indicates that 19% of the direct mail is kept for future reference. That means besides the 44% waste (according to fact # 9), 19% of the remaining 56% is actually kept for future reference, which means solid quality leads for your business in the long run! [22]
     

Internet Direct Marketing & Price refund offer (Fact 14)-[12]

Well direct email marketing is cheap it can bring you huge sales (if done right) but like everything it too comes with a cost. 

“The Cost of price refund” yes, since customers don’t know about the product/service, don’t have any experience therefore they are most of the time reluctant to try, so you offer price refund to give them confidence to try your product/service, to earn their trust, to reduce their perceived risks!

And doing that helps you in making sales but at the same time it can bring trouble, like upon delivery of a product/service, for one reason or another some customers calls back for refund, it does costs you! 

Sometimes quite dearly!

But that doesn’t mean you don’t have a way to fix it, Research (check reference 12 article for more) indicates that charging a specific amount (that increases with increase in volume of purchased products/services through direct mail) for price refund can actually deter customers from asking for refund.

Second if your competitors want to wreck havoc on your business by ordering dozens or hundreds of products and then asking for price refund, this strategy will deter them from doing that, of course you can ruin your competitor business (or at least his/her day) if they don’t charge for refund price (winks!)

For more detail on that, you should check the article in reference! 

Direct Marketing (Unsolicited Email VS Unsolicited Mail)-Fact # 15

So what you think, which one of the two, email or mail, is more annoying, intrusive, well as per research the answer is unsolicited email! [13]

Off course we all know that but I thought about adding a bit of science to it!
   

SMS Direct Marketing & Customer (Fact # 16)

If you are wondering which group or segment in terms of age of your target market would appreciate and love to hear from you via SMS text, well the answer is, published in Cambridge Journal of Advertising (2006), its research indicates that “Younger consumer with higher social class” are more receptive and respond favorably to such communications aka SMS direct Marketing [14].
    

Direct Mail & Customer Network Value (Fact # 17)

Again if you are planing about direct mail/email marketing and you have certain metrics that you want to utilize to select specific group of customers for your direct mail campaign, before you do that, remember that the most profitable metric according to research is “Customer Life Time Value Metric (CLTVM)” [15].

And to get even more out of CLTVM you should utilize the Customer Network Value Metric (CNVM) along with it. CNVM refers to, as Professor Pedro Domingo at Washington University puts it, “…in addition to buying products himself, a customer may influence others to buy them.” [16] [17]

In other words CNVM means the influence a customer has over other customers, that is persuading his/her social circle to buy your product/service.

Professor Pedro further highlights how this leads to increase in Customer life time value “For example in addition to seeing a particular movie myself, I persuade three friends to see it with me, my customer (life time) value with respect to that movie has effectively quadrupled,”.

Now if you need more on it, do read couple of articles mentioned in reference.
    

Direct Marketing to Kids Fact # 18

If you happen to be dealing in a product/service that target kids and wondering about when to initiate direct marketing to kids, well according to a research done by Direct Marketing magazine, by the age of eight kids’ starts taking buying decision on their own. 

That means if you really want to target kids, you should utilize your direct marketing approach to kids that are at least eight years old [23] given that they have email/mail access...

Though one of well known email service (kidsemail.org) CSR told me that majority of their service users are in 5-13 age group and normal age in her view was 8.

And here is a little data on total kids (6-17 age group) population in the U.S. [24]

And Kids Pocket Money (average across all ages) in U.S. is $780/year [25] and that gives us a really interesting insight in above mentioned stats. Take a look at the following chart.

In case you are from UK and want to target 8-17 age group, here are few stats [26]

Now let’s get to the pocket money (winks!) btw you guys don't mind my "winking" right ?

According to a survey conducted by Halifax, average pocket money/week is £6.20 (across all age groups) [27]. 

Again we get an interesting statistic about UK’s kids’ pocket money when we consider this fact in light of the above mentioned population statistics.

Here is the chart!

Now let’s put these things into perspective, what if you get 5% of pocket money spend by age group 6-17, what if you get 10% of that? How much you think you will earn in profit? Hmm… think about it…

Let me make it easy for you...

TMAG 8-17 UK/2015	TMAG 6-17 U.S/2015	PM in U.S.	PM in UK	% You Earn/year	TEA UK/15 PROFIT	TEA U.S./15 PROFIT
9.319 million	49.7 million	$780/year	£319/year	5%	£0.14Billion	$1.93Billion
Do yourself	Do yourself	Do yourself	Do yourself	10%	Do yourself	Do yourself

Abbreviations:

TMAG 8-17 UK/2015=Total Members in Age Group 8-17 in UK in 2015

TMAG 6-17 U.S./2015= Total Members in Age Group 6-17 in U.S in 2015

PM in U.S.= Pocket Money in U.S.

PM in UK=Pocket Money in UK

TEA UK/15= Total Earned Amount (profit) in UK in 2015

TEA U.S./15= Total Earned Amount (profit) in U.S. in 2015

If you earn 5% of their pocket money/year then in 2015, in UK you would have 0.14 billion in profit and $1.93billion in U.S. that is handsome amount!

Now if you are in either of these countries, why don't you think about a product/service that will get you 5% of kids pocket money ?!!

And if you already a have product/service, you better get started with one awesome direct marketing campaign!

Direct Marketing & Emotions Fact # 19

Do you know what pushes customers to buy a given product/service ? Have you ever thought where it all starts, what is it that makes customers want to buy ? Well the truth is its "emotions!".

Yes, you heard it right, (according to a research) it is “emotions” that humans utilizes in making any decision nothing else, YES NOTHING ELSE!!, for more on that you should check out research done by well known Neuro scientist Antonio R. Damasio or watch this three minute short video .

Now what this all means is, when you are planning to utilize direct marketing as means to attract and retain customers, you need to really focus on how to make it to their emotions via a given direct marketing approach, to push them to make that buying decision, to make them repeat customers.

For more on emotions and decision making, check this article or maybe you should watch couple of YouTube videos by Antonio R. Damasio on the subject. Trust me there is good objective science behind this one! 

Direct Marketing & The Familiarity Principle Fact 20

Now when you have really focused on emotional aspect of your Direct Marketing campaign, what you need is frequency, you to need continue with that “emotional aspect” constantly, for longer, forever!

Yes forever, because this things only works when it is kept going for long, so that your customers develop familiarity with it.

And that's exactly what familiarity principle stands for, Wikipedia describes it as “a psychological phenomenon by which people tend to develop a preference for things merely because they are familiar with them.” [28]

And doing things on routine basis, for months, years (according to a research) results in improving organization, business capabilities which delivers competitive advantage [31].

That’s why you see a same emotional message gets repeated by these big brands constantly, for decades! Now you know why they do it! So better you do it too (winks!)

And that’s why perhaps Joseph Goebbels (Nazi Germany Propaganda Minister) said “If you repeat a lie often enough, people will believe it, and you will even come to believe it yourself.”

Lastly this Familiarity Principle is not some subjective theory thing, it has been proven over and over by scientific research! Don’t miss to check out the scientific experiments, researches mentioned in Wikipedia article.

Direct Marketing & Brand Experience, Emotions & Total # of Business Emails Fact # 21,22

Again as per scientific research aesthetic and emotional aspects of brand experience (in our case experience via direct marketing) are increasingly acknowledged as important economic drivers and as key differentiators in the marketplace [29].

What this means is, in all that direct marketing clutter, you can differentiate your brand with good amount of aesthetics and emotions!

Talking about clutter, here are some facts

• 89 billion business emails sent worldwide every day [34]

• United States postal service handles 40% of worlds mail volume (523 million/day) that means total post mail pieces sent/day around the world are 1.307 billion [35].

     

Direct Marketing & Emotions Fact # 23

According to yet another research “people go to shopping to reward themselves, to satisfy their emotional needs, or to make themselves feel good”. [30]

Obviously shopping has got nothing to do with direct marketing but the fact here mentioned is for a different reason, if people go to shopping to reward themselves, to satisfy their emotional needs, to make themselves feel good then why not do the same via direct marketing?!

Why not reward them, satisfy them, make them feel good via direct marketing? You just need a little bit of out of the box thinking to achieve that!

Direct Marketing & Email Subject Lines Fact # 24

Subject lines are really important but to many surprise emails without subject lines do better, according to a research emails with no subject lines were opened 8% more than those with subject lines [32].

Interesting! Isn’t it, one reason for that is, without subject line an email shows more preview text or preview of the body text of the email but I think it’s not just about that, it’s about curiosity, I mean people think like “An email without subject line ?!!, why, what’s that, better check it out!”

Emails without subject lines are unusual, creative and that’s why perhaps it has greater open rate, now in a nutshell what this whole things means:
    

You have the following options when it comes to subject lines

1.      You can go for emails without subject lines with high open rate compared to emails with subject lines
2.      You can go for emails with ambiguous subject lines
3.      Or You can go for emails with unambiguous subject lines

So when you are in testing stage of your email campaign, you should try all these three methods and see which one has the healthiest positive response!

And here is an article that explains the benefits of ambiguous & unambiguous subject lines! This will help you in understanding these other two options more clearly.

Direct Marketing Fun Fact # 25

In the time it took you to read this sentence, 20 million emails were written! [34]

That’s it! I hope you guys enjoyed and gained tons of rich insight from reading these facts, kindly share it with your friends, colleagues on social media!

Have a great day (winks!)

And don’t forget to subscribe! I mean I deserve a little of your attention? Don’t I ?

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References:

1. McDonnell, F. (2005), “Integrating word of mouth marketing”, paper presented at the International Word-of-mouth Marketing Conference, 6-7 October, Hamburg, in Andres, N. (Ed.), Proceedings of the 1st International Word-of-Mouth Marketing Conference, Brand Science Institute, Hamburg, Germany.

2. Nielsen (2007), “Trust in advertising, a global Nielsen consumer report”, October, available at: www.nielsen.com/solutions/TrustinAdvertisingOct07.pdf

3. MacInnis, Deborah J., Christine Moorman, and Bernard J. Jaworski (1991), "Enhancing and Measuring Consumers Motivation, Opportunity, and Ability to Process Brand Information From Ads," Journal of Marketing, 4 (October), 32-53.

4. Data Mining for Direct Marketing : Problems & Solutions by Charles X. Ling & Chenghui Li

5. Yorgey, L.A. (1995), “Putting your database to work”, Target Marketing, January, pp. 20-21.

6. Gruppo, Levey & Co.

7. http://www.webpagefx.com/blog/business-advice/the-cost-of-advertising-nationally-broken-down-by-medium/#mag

8.  Raj Mehta, Eugene Sivadas, (1995), “Direct marketing on the internet: An empirical assessment of consumer attitudes”, Journal of direct marketing, Pages 21–32.

9. http://www.pewinternet.org/data-trend/internet-use/latest-stats/

10. http://www.statista.com/statistics/272365/age-distribution-of-internet-users-worldwide/

11. Culnan, M. J. (1995), Consumer awareness of name removal procedures: Implications for direct marketing. J. Direct Mark., 9: 10–19. doi: 10.1002/dir.4000090204

12. “Controlling product returns in direct marketing” by James D. Hess, Wujin Chu, Eitan Gerstner Article Marketing Letters October 1996, Volume 7, Issue 4, pp 307-317.

13.  Consumers’ Attitudes Toward Unsolicited Commercial E-mail and Postal Direct Mail Marketing Methods Mariko Morimoto , Susan Chang , Journal of Interactive Advertising  Vol. 7, Iss. 1, 2006

14. RANDOLPH J. TRAPPEY III and ARCH G. WOODSIDE (2005). Consumer Responses to Interactive Advertising Campaigns Coupling Short-Message-Service Direct Marketing and TV Commercials. Journal of Advertising Research, 45, pp 382-401.

15. Rajkumar Venkatesan, V. Kumar (2004) A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy. Journal of Marketing: October 2004, Vol. 68, No. 4, pp. 106-125.

16. Pedro Domingos “Mining Social Networks for Viral Marketing”, Department of Computer Science, University of Washington.

17. P.Domingos and M.Richardson. Mining the network value of customers. In Proceedings of the Seventh ACM SIGKDD International Conference on Knowledge Discovery and Data Mining, pages 57{66,San Francisco,CA,2001. ACM Press.

18. Michael L. Maynard, Charles R. Taylor “A comparative analysis of Japanese and U.S. attitudes toward direct marketing” Journal of Direct Marketing, Volume 10, Issue 1, 1996, Pages 34–44

19. Content Marketing Institute (2012)

20. http://marketingland.com/report-u-s-companies-send-emails-global-average-1-47-million-sent-per-month-114180

21. Harvard Business Review Ref: https://hbr.org/2012/08/why-email-marketing-is-king

22. http://www.yeomansmarketing.co.uk/15-facts-that-will-make-you-think-about-increasing-your-direct-mail-budget/1601/

23. Murray Raphael, `Are you kidding?', Direct Marketing, Vol. 56, No. 3 (1993), p. 38.

24. http://www.childstats.gov/americaschildren/tables/pop1.asp

25. American Institute of CPA’s

26. http://www.neighbourhood.statistics.gov.uk/HTMLDocs/dvc219/pyramids/index.html

27. http://www.halifax.co.uk/money-explained/articles/2015/10/how-much-pocket-money-other-people-give-their-kids/

28. https://en.wikipedia.org/wiki/Mere-exposure_effect

29. Brakus, J.J., Schmitt, B.H. and Zarantonello, L. (2009), “Brand experience: what is it? How is it measured? Does it affect loyalty?”, Journal of Marketing, Vol. 73, May, pp. 52-68.

30. Pooler, J. (2003), Why We Shop: Emotional Rewards and Retail Strategies, Praeger, Westport, CT.

31. Barney, J.B. (1991) Firm Resources and Sustained Competitive Advantage. Journal of Management, 17, 99–120.

32. http://blog.hubspot.com/sales/sales-email-subject-never-try

33. http://www.alphagraphics.com/center_blogs/roseville-california-us552/2014/04/07/ten-print-marketing-statistics-you-should-know/

34. http://mashable.com/2012/11/27/email-stats-infographic/#WIZW_PatC8qG

35. https://about.usps.com/who-we-are/postal-facts/postalfacts2014.pdf

36. A typology of internet users based on comparative affective states: evidence from eight countries George Christodoulides and Nina Michaelidou

37. HBR ref: https://hbr.org/2012/08/why-email-marketing-is-king