Building Your Business Operations & Success Marketing What Is Direct Marketing? By Lahle Wolfe Lahle Wolfe Facebook Twitter Lahle Wolfe wrote about women in business for The Balance Small Business. She has more than 25 years of experience in small business development and ran her own digital marketing firm. learn about our editorial policies Updated on September 19, 2022 Fact checked by Mrinalini Krishna Fact checked by Mrinalini Krishna Twitter Mrinalini is the senior investing editor at The Balance and is an expert in investing, financial journalism, digital media, and more. She's been a journalist for more than 10 years at organizations such as the Financial Times and Investopedia, and she has a master's in business and economic reporting from New York University. learn about our editorial policies Share Tweet Pin Email In This Article View All In This Article How Direct Marketing Works Pros and Cons of Direct Marketing How To Create Effective Campaigns Frequently Asked Questions (FAQs) Definition Direct marketing is a form of marketing where you directly communicate with a specifically targeted group of customers and often prompts them to take an action. It can be a useful tactic for business to grow their customer base or even test their offering before rolling it out to a larger audience. Photo: The Good Brigade / Getty Images Key Takeaways Direct marketing is a way for businesses to reach out to a targeted customer baseTypically, direct marketing prompts them to take an action or "call to action"Telemarketing, flyers, social media interactions, and direct mails are some examples of direct marketingDirect marketing can be used to grow consumer base, improve brand awareness and test product offeringsProper targeting, setting goals and metrics and campaign design are key to direct marketing success How Direct Marketing Works Direct marketing is a way for businesses to reach out to a targeted customer base. Customers can be targeted based on their interests, demographics or even customer information. The overarching goal of a direct marketing campaign is to persuade consumers to take actions that result in tangible, measurable results, such as purchases, signups, or requests for more information. Since it's an aggressive form of marketing, it can work to grow a customer base, but it needs to be carefully planned and implemented. Types of Direct Marketing Tactics The world of marketing is always evolving, but common types of direct marketing include: Telemarketing (phone calls) Robocalling (automated phone calls) Text messages Emails Targeted online ads Social media interactions and Ask-Me-Anything posts (AMAs) Television infomercials Coupon ads Direct mail Flyers and handouts Kiosks and stands Door-to-door solicitation Note The good thing about direct marketing is that there are so many alternatives that if one approach doesn't work, you can easily switch to another. Instead of flyers, for example, you could try an online promotion for a free beverage for first-time customers. Example of a Direct Marketing Campaign You can find examples of direct marketing campaigns in many parts of your daily life, not just your mailbox. For example, you are shopping online and the retailer asks you to sign-up for an account with your email to get a 15% discount. Or you're reading a news article, and at the end it prompts you to sign-up for a newsletter on the same topic. Pros and Cons of Direct Marketing Pros Effective in improving brand awareness Can grow consumer base Can be used to test offering Cons Intrusive State Privacy Regulations Low Return on Investment Pros Explained Effective in improving brand awareness: A well executed and innovative direct marketing campaign can be memorable and shareable. That means customers are likely to remember the brand and the campaign, they may even talk about it with their friends and family.Can grow consumer base: By asking customers to take actions such as signing up for an account by offering an incentive can be an effective way to grow your customer base. It can also be an effective way of re-connecting with old or former customers.Can be used to test offering: If you're looking to introduce a new product or service into a market, a direct marketing campaign can be a great way to achieve two key objectives. First, you can test a smaller target audience their response to your offering. And second, to generate hype and awareness about your impending offering. Cons Explained Intrusive: Reaching out to customers via their phones or mailboxes can be unwanted and feel intrusive to customers. After backlash specifically against telemarketing calls, the Do Not Disturb Registry was set up in 2008, preventing calls to numbers registered with the U.S. Federal Trade Commission.State Privacy Regulations: With more devices and larger digital footprints, customers are worried about their privacy, now more than ever. That has prompted many states, such as California, to come up with their own privacy regulations. Navigating different rules across different states can prove challenging for businesses.Low Return on Investment: While direct marketing involves an organization attempting to locate, contact, offer, and make incentive-based information available to consumers, it also needs to get a return on investment. If handing out flyers to drum up business at your newly launched pizza parlor doesn't result in more customers, then it's not worth the employees' time. How To Create Effective Campaigns Companies and organizations can get creative with their direct marketing efforts to help them stand out. For instance, to help direct mail pieces stand out in a pile of typical mail, companies may send flyers with large and unusual shapes, pop-ups, or even 3D objects. Proper Customer Targeting Generally, direct marketing campaigns should target people who have expressed interest or are likely to be interested in what your company offers rather than mass marketing campaigns used to create general awareness. For example, a new ice cream shop may want to send coupons shaped like ice cream cones to local households with kids at the start of summer. More targeted and personalized campaigns usually generate better results. Goals and Success Metrics A key factor in the success of any direct marketing campaign is what industry experts refer to as a "call to action." That means direct marketing campaigns should offer an incentive or enticing message to get consumers to respond (i.e., act). Note A successful direct marketing campaign usually offers consumers a benefit, whether it is money off their next purchase, a limited-time coupon, or, for a nonprofit, an invitation to an event or discounted membership. Campaign Design and Budget The type of direct marketing that will work for your business depends on your industry, your budget, and the consumers you're targeting. However, keep in mind that aggressive or misleading direct marketing can leave people with a bad impression of your business. Be sure to adhere to privacy and contact laws on a federal and state level. Not doing so could hurt both your reputation and your revenue because there are stiff fines and penalties for companies that violate direct marketing laws. Frequently Asked Questions (FAQs) How to create direct mail marketing? The first step to a direct mail marketing campaign is to determine a goal, what do you want to achieve from such a campaign and zero-in on the target audience. A list of existing and old customers is a good place to start looking. Select the type of mailer you want to send — flyer, letter, coupon or catalogue etc. Design and style your mailer to deliver your message in a catchy yet effective manner that appeals to your target audience. Keeping text concise and relying on visuals can help. Lastly, make sure your incentive is tempting enough for the customers to respond. What is direct response marketing? Direct response marketing is a subset of direct marketing that specifically asks a consumer to take an action, sometimes in exchange for an incentive. Such a "call to action" could vary from signing up for an account, calling a telephone number or making a purchase to receive a benefit. Common types of customer benefits offered by direct response marketing include money off their next purchase, a limited-time coupon, or, for a nonprofit, an invitation to an event or discounted membership. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Small Business Administration. "Direct Mail is Hot Again. Here’s How to Use It." Small Business Administration. "10 Ways to Get New Customers." University of Michigan. " Principles of Marketing - 11.4 Advertising and Direct Marketing." The Data Privacy Group. "The Impact of CCPA on Marketing in 2020." Duke University Libraries. "Guide to Direct Marketing Materials."