Shrinking Marketing Budget Favours Direct Marketing

Olaseeni Durojaiye
Perhaps in response to the global economic recession which has shrunk the marketing spend of companies, many businesses are tilting towards direct marketing as a way to boost sales and patronage, at least, in the short term. Famous in the industry, DM leverages on direct contact with the target audience through use of any or a combination of the following: telephone, social media, catalogue, brochure and handbill among others.
Findings by M2 show that businesses adopting DM cut across sectors and are daily growing. Examples include HP Experience Center; Panasonic Electronics Shops; Samsung Showroom; Bedmate Furniture; Guinness; PasportFoto; and PFL, an educational services marketing outfit.
Industry watchers insist that besides being cost effective, the implications of reaching the target market through DM is shunning advertising and, by extension, ad agencies.
According to Tomi Ogunlesi, a Strategic Planner at Bates Cossè and a professional member of the Chartered Institute of Marketing UK, “businesses will continue employing direct marketing for many reasons. As a matter of fact, the trend will only continue to be accentuated, particularly in the context of an economy witnessing a slow-down. The reason for this is primarily that above-the-line communication (what we know as advertising) is a big-ticket venture and most marketers are rationally evaluating the cost-benefit analysis of all options available to them.”
Continuing, Ogunlesi explains that “start-ups and SMEs in particular are constrained to utilize direct marketing at the expense of advertising because of the cost perspective on one hand, and on the other, the various encumbrances that have typically bedeviled advertising in these climes which include lack of compliance with media schedules as well as flagrant disregard of the most basic of advertising tenets, one of which is that ideally, commercials for competing products/services should not be aired back-to-back.”
HP Experience Store deployed direct mail – an arm of DM – to promote and market its ‘True Love Experience’ tied to the last valentine season. Many urban dwellers that HP targets through its Experience Store were inundated with electronic mails communicating HP’s price slash in the spirit of the valentine.
Besides HP Experience Store, Guinness and Samsung have also been deploying the same strategy to promote the Guinness Football Fiesta and home appliances products respectively via the use of customized SMS messages directly to the telephone numbers of the target markets.
Guinness used the platform greatly during the last African Cup of Nations held in Angola in January. While African countries did football battle in Angola, Guinness sent customized text messages to telephone numbers of football buffs inviting them to select spots to savour the drink (Guinness brands) while watching the day’s matches in a convivial atmosphere. The company also used DM to spur football fans to various fun spots to watch Premiership matches and drink Guinness brands as well.
In recent times, small scale businesses have been using the same method to promote their enterprises. Two of such businesses are PFL and PasportFoto. The two businesses have been sending out SMS to both customers and prospects alike, intimating them of their services with claims of affordable prices laced in the messages.
The divergent services that the two companies – PasportFoto and PFL – market through the same means further attest to the vast opportunities that mobile telephone offers. This can also be said of Bedmate Furniture which advertises its home décor and furniture through customized text messages and sometimes electronic mails.
Marketing communications professionals argue that DM can be a controversial sales method by which advertisers approach potential customers directly with products or services, adding that the approach is oftentimes an intrusion on the target’s privacy.
This may not be far from the truth since the most common forms of direct marketing are telephone sales, solicited or unsolicited emails, catalogs, leaflets, brochures and coupons. In the case of catalogues, brochures and coupons, findings by M2 reveal that members of the target audience get them even when they do not ask for them as the promotion companies have devised ways to insert such materials into newspapers and other fast moving journals. They also post the leaflets/posters on people’s automobiles and doorposts in other instances.
Further findings reveal that many companies and service providers prefer DM to promote their brands and services as against using traditional forms of advertising like radio, television and newspapers that may not always yield commensurate results with budget-spend.
Another industry practitioner, Joel Bamigboye argues that more and more companies are beginning to key into the vast opportunities provided by DM platforms such as mobile telephones adding that the fact that power supply in the country is poor means that more and more businesses would take recourse to DM as ROI on ad spend becomes more difficult to justify. “Among other factors, I think it is because many business managers are beginning to key into the opportunities that gadgets like mobile phones offer to reach a set audience.”
According to Bamigboye, “Another factor may be the state of power supply in the country. It does not make sense to pay huge sums of money for television or radio advertising when a good size of my target audience cannot see or hear it because of power outage. I’d rather use other means like mobile phones or insert catalogues and handbills in newspapers. That way, I know that my message gets across to my target audience and is cost effective too.”
He, however, adds that successful direct marketing will require compiling and maintaining a large database of personal information about prospects and clients. These databases are often sold and can be sourced from DM companies or telecoms companies.
Concluding, Ogunlesi notes that “advertising definitely cannot work for every business. If you have a good product and it’s got a monopoly in the market, you may not really be constrained to advertise. I keep using the example of Nkatie Burger; a popular peanut snack that many people don’t know is imported from Ghana. It has leveraged for years on product quality, packaging, affordable pricing and effective distribution to achieve equity that advertising may not have been able to guarantee. Before the advent of the GSM telcos, in its hey-days, was almighty NITEL advertising per se?
“The potentials inherent in DM are incredibly remarkable. With the rise of new social media and interactive networks, there’s an entirely new angle to DM. Word-of-mouth alone has mind-boggling capacity to influence consumer action. Let me conclude with this food for thought: a certain product by name Alomo Bitters has been making waves in the ‘market’ of recent, particularly among young men. Practically everywhere I turn these days, I hear about it. Is it because of advertising? Think again!” He asks rhetorically.
However, the key thing that must however be pointed out here is that a one-size-fits-all solution cannot augur well for all types of marketing challenges. Entrepreneurs will need to carefully evaluate the nature of their products, the market peculiarities as well as the budgets available to them to determine how best these can be deployed in order to garner maximum ROI.