Direct response is a marketing technique that can use all of the same media as general advertising, including print and electronic media.  However, direct response is generally thought of in terms of direct mail and telemarketing.  The difference between direct response and general advertising is that direct response requires the recipient to take some type of action. Just as not all direct response is mail, not all mail is direct response. For a marketing promotion to be considered direct response it must:

• Place the offer directly in front of the potential customer,
• Call that customer to respond immediately by taking an action in the form of a request for additional information or a purchase decision, and
• Allow the source of the response to be tracked accurately so that the return on the marketing investment can be measured.

Every time a direct response solicitation is executed, valuable information about the audience receiving the message is gathered.  By selecting mailing lists and other targeted delivery systems which appear to match the offer being made, tests can be conducted which will eventually lead to an ability to predict response within a close statistical tolerance based on experience with similar offers to a known audience specification.  Also, respondents can be added to a growing database of confirmed customers for future solicitation.

For these reasons, all direct response promotions should be considered as having a dual purpose of both sales and market research.

Using Direct Mail
Most businesses achieve income from more than one source, including the sale of products, services, publications, memberships and even activities like seminars and events.  Properly used, direct response has certain attributes that make it a valuable part of any total marketing program.  It can supplement, support and in some cases actually replace a sales force. It is also an extremely powerful information gathering tool.
The effectiveness of any direct response marketing effort is in part a function of the audience's perception of the business involved, and that perception is a result the identity created by the business's general advertising and public relations activities.  Without an awareness of the business within the target audience, direct response solicitations become like "cold" calls, requiring an explanation of the business's "mission in life" as well as a sales pitch for the specific offer.   This is a great deal to ask of a single direct mail package and it can limit response as well as confuse potential customers.

If the target audience has some prior knowledge of the business, the offer will be perceived as coming from a familiar source and will be more successful.   While multiple solicitations can, in time, create awareness, they are an expensive way to establish an identity.  Therefore, direct response solicitations should usually be part of a total program that includes effective use of all marketing and advertising techniques.

Steps to More Profitable Direct Marketing
1) Establish a consistent identity and position in the marketplace using general advertising and public relations techniques.
2) Plan and execute direct response solicitations in a manner that is consistent with the established identity.
3) Remember that direct response is a sales tool and use each promotion to sell ONE thing.  Do not confuse your customers. If you are trying to make the phone ring, sell the reason for calling you - you can sell your product or service when you are talking with the prospect. In insurance it is called "selling the interview", because you cannot sell the policy until you are face-to-face with the prospect.
4) Be aware of who you are pitching, whether by mail, on the phone or in person.

• In a business-to-business offer, if you are pitching a principal (someone with an equity stake in the business) the primary concern is the bottom line effect of the product or service you are selling.  You want to talk about profits, costs, cash and time.
• If your pitch is to an employee, the situation is completely different. Employees are concerned with job security and career advancement, so you should talk about how your product or service is a safe purchase, how the employee will be protected in case of any problems, how they will look good to the boss and how their job will be made easier.

5) While information about your business may be used to support an offer, try not to overwhelm the customer - focus your DM materials on the benefits that the customer will gain by responding to the offer.
6) Business to business or professional direct response offers, unlike consumer promotions, often have a very long response cycle.  Such offers are sometimes filed for future consideration and not acted on for months.  Even so, when the inquiry comes, follow-up must be immediate.  Waiting even forty eight hours to call back on an inquiry can turn what should be a "warm" call to an interested, qualified potential customer into a "cold" call to a hostile prospect.
7) When selecting commercially available business lists for testing, consider both lists with names as well as industry selectable business address only lists with appropriate functional titles, departments or mailroom routing instructions added as a first line to the address.  It is not unusual for functional titles to outperform names on certain offers, and such lists can give valuable information about the responsiveness of certain industry segments.
8)  Remember that direct response works in accordance with certain "laws of large numbers".  Be realistic in projecting response.  This means that a response rate of as little as one tenth of one percent on a cold offer to a previously untried but properly targeted list may be quite acceptable, while a "warm" list of your own customers or inquirers should produce responses at a multiple of that rate.
9) Consider using more than one direct response medium in the same promotion, such as mail and telephone follow up.  Coordinated use of multiple direct response techniques can often multiply response.
10) Take advantage of large numbers by using inexpensive "teaser" promotions emphasizing a few specific benefits to generate requests for additional information as well as sales.  Follow the inquiries immediately with sales calls or complete information packages, and maintain a database of the respondent's names along with as much business and personal demographic information as can be gathered.  This list is the business's second most valuable marketing resource.
11) Your most valuable marketing resource is the database containing the names of your current and previous customers who have defined their interests in terms of the products and services they have purchased.  These are the people that can be depended upon to make any promotion profitable.
12) Your "house" list of customers and inquirers should contain as much information about the names as possible.  You should be able to identify your best and worst customers and prospects by interests, business and personal demographic profile and purchasing history, and that information should be considered in selecting outside lists for testing.
13) When creating a specific offer, remember the difference between customer acquisition and retention:

• When the object is the acquisition of new customers, the emphasis is on the benefit that will be derived by responding to your offer.  Tailor the benefit offered to the known interests of the target audience.  Both you and the customer should have a clear understanding of why a response was generated.
• The day a prospect becomes a customer is the day that customer begins to leave.  Retention is an ongoing process of reselling, reminding and reinforcing the reasons for doing business with you, as well as communicating "new and improved" reasons for staying.  Positioning and image are important parts of this process.   Never stop communicating.

14) Test, test, test and retest.  All elements of a direct response package - offer, design, copy, length, timing, delivery and list - are "fair game" for testing.  When a package that works is developed, it should be considered a "control".  Variations and new packages should be evaluated against the control in both split runs and free standing tests, and no control should be abandoned until it has been beaten repeatedly.
15) Finally, the bottom line is return on investment.  This means income generated per dollar spent on marketing. Do not be fooled by an expensive promotion with a high response rate compared to a less expensive promotion that may have a lower response rate overall but a higher rate of responses per dollar.  Also, any evaluation of your marketing effort must include an assessment of the lifetime value of an average customer.  This information allows specific promotions to be evaluated both in terms of the cost of acquiring a new customer and in terms of the customer's contribution to short and long term profits compared to the average.

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