Direct Response Marketing Quickly Defined
Direct Response Marketing is a sales technique that most commonly uses short-form or long-form TV media to deliver a sales pitch on a product with a specific call-to-action. This typically will be a toll-free phone number to place a phone order for the at-mentioned product.
When people think of Direct Response, they may think first of such notable consumer products as the Pocket Fisherman or Ginsu knives. And in the early days, that is essentially all it was – a presentation directly to the consumer in which the merchant asked the consumer to dial an 800 number and purchase the product – in short, a direct response. The entire goal was to generate a single sales transaction. Generating sales is still a goal today, but sophisticated brand managers use Direct Response to accomplish so much more than generating sales transactions. They use it to create a brand, drive retail sales, differentiate their product from others, drive consumers to key outlets, generate leads, promote new products, enhance the brand, and enhance the company’s image. Sounds remarkably like traditional image or brand advertising, does it not?
Popeil Pocket Fisherman: a small fishing pole. “The biggest fishing invention since the hook … and still only $19.95!” (according to the program Biography, the original product was the invention of Popeil’s father and only marketed by Ronco, but as of 2006, Popeil had introduced a redesigned version of the product.) — Ronco Wikipedia Article
Creating a Brand for Direct Response Ads
Direct Response built American Express, AOL, Book of the Month Club, Dell Computer, GEICO Direct, Time-Life Books and Tapes, and other well-known and respectable brands. Again, these are the early adopters, and the companies that used Direct Response to differentiate themselves from their competition. Another example is the Tae Bo exercise system. Before Billy Banks started selling his Tae Bo tapes through DRTV, there was no such thing as “Tae Bo.” Now it is written in history as a pioneer exercise program that had elements of slow shadow boxing.
What’s so exciting is that you can generate revenue while you’re building the brand. Joe Sugarman – the man behind The Sharper Image – said you can spend millions of dollars and several years trying to create a brand through traditional advertising alone. By integrating Direct Response, however, “You can actually earn a profit while you are building that brand name. . . . [You can] have your product become a nationally recognized brand name that can be successfully sold at retail and throughout the world.”
Increasing Retail Sales for Direct Response Ads
Brand managers and advertising managers have learned that direct response can increase sales at the retail level. In the late 90’s, Philips Consumer Electronics came out with a new DVD player that had some astounding features. One problem though – the retail store clerks had no idea how to work the thing. Needless to say, sales did not skyrocket. So Philips created an “infomercial.” It showed the player’s features and how to use them. Consumers flocked to retail electronics stores to buy it. In this case, the spot was indeed an “informational commercial.” Technically speaking, this was not a Direct Response commercial since there was no request to “order now,” nor even to drive to the store and buy one. However, it certainly had that effect, and it shows that elements of Direct Response advertising can be used to accomplish retail sales goals.
Direct Response Marketing works best at driving retail sales when the product has been demonstrated in some way, as in the Philips spot, and when the consumer is asked to “order now,” or visit the store. Interestingly, most people who see a DRTV spot do not pick up the phone and order it if it is available at a retail store. If they want the product, they go to the store buy get it. Industry statistics suggest that anywhere from ten to fifteen units will be sold at a store for every one ordered over the phone.
This bit of human behavior is why Sears and Home Depot are now so successful with DRTV. You see a particular wrench or tool set at Sears, and wonder what on earth it is good for, and you will not buy it. But after you see Bob Vila demonstrating its uses on TV, you are likely to buy it the next time you go to Sears. Or, thanks to Bob’s advice to visit Sears today, you might make a special trip just to get one. Both Sears and Home Depot are well-respected brands. Such Direct Response ads enhance that brand image.
Home Depot adds a twist that I think is brilliant. Their tagline, “Call. Click. Or Visit Today,” is a stroke of marketing genius. It gives the consumer simply stated options for ordering. It recognizes that consumers will be more likely to buy right now if you give him or her multiple ways to do so. So it still maintains the hard sell – the “order now” – but in a much softer tone.
Product Differentiation for Direct Response Ads
A perfect example of using Direct Response Marketing to differentiate your product from similar ones is GEICO once again. In their spots, they appeal to our perceived lack of time (give us only 15 minutes) and our desire to save money (we’ll save you 15 percent or more). Both are significant, but in my mind that time-savings is key. With no obligation to purchase, who wouldn’t spend a mere 15 minutes just to see if they could save 15% on their car insurance premium?
“Key outlet” is a term coined by industry pioneer Alvin Eicoff. Similar to driving consumers to corporate retail stores like Sears or Home Depot, an independent inventor or manufacturer might tell the consumer something like, “Get our product at your local Ace Hardware, Kmart, or Wal-Mart.”
Eicoff came up with the concept in the late 1940s. The inventor of d-Con rat poison approached him to market d-Con. Retailers would not touch it because it was an unproven product. So Eicoff then ran Direct Response radio ads. In those days, there were no 800 numbers and no credit cards. Listeners were prompted to write down an address and send a check.
Even then, d-Con worked so well, people started asking for it at various stores. These stores, causing stores to contact Eicoff and say, “Gee, we’re sorry we didn’t believe you before. Can we have some d-Con to sell now?” Eicoff put the product in selected stores, and went back on the radio, “Send for it by mail, or you can buy it today at XYZ Hardware.”
Direct Response Marketing mechanisms can produce qualified leads at less cost than any other means because it is targeted advertising. You don’t waste money appealing to people who aren’t interested in what you have to offer. They know up front what you have to offer, and if they contact you, they are indeed a hot prospect.
Law firms are prime examples of using Direct Response for lead generation. “INJURED? GREATER ATLANTA, ALL ACCIDENTS – LOST WAGES – MEDICAL BILLS – PAIN & SUFFERING. GARY MARTIN HAYS 1-800-WIN-WIN-1”. Nissan, General Motors, and Ford have also used Direct Response for lead generation.
Promoting New Products
Smilar to lead generation, companies are using Direct Response to promote new products.
Pfizer uses this method to promote Viagra, and other pharmaceutical companies are promoting their products in the same way. The message is, “Call us and we will send you a coupon you can give to your doctor for a sample.” The pharmaceutical companies are no longer waiting for your doctor to prescribe their particular cure. They are pushing you there with a firm suggestion: “Go to your doctor and get a prescription for our pills.” Guess what. It’s working.
Brand enhancement per se reaches across many of the methods already discussed. In other words, as Bob Vila invites you to visit a Sears store and purchase that tool set, they are also enhancing the brand and building credibility by these extremely warm and well-crafted spots. There are examples, however, where the specific purpose is not necessarily to create a sale today, but rather to enhance an already well-established brand. This, along with image enhancement described below, might be considered the “softest” sell of the Direct Response purposes.
Apple Computer ran DRTV spots designed to turn consumers away from the plethora of Windows-based PCs and towards a MacOS-based Apple product. The commercials featured people who have done so, and why they were glad they did. If the viewer is then persuaded to at least consider a switch, he or she can call a number for a nearby outlet, or visit Apple’s website for more information.
Image enhancement is for the very specific purpose of enhancing a company’s image or credibility.
A good example of using Direct Response Marketing to enhance a company’s image in a two-minute spot, like Warren Direct produced for Express-Med. Express-Med distributes respiratory medications and diabetes testing supplies. In the spot, using real, patient testimonials, they focused on how the company was responsive to its client’s needs and fulfills those needs quickly, conveniently, whenever and wherever the patient may be. Now, that may sound a lot like traditional image or brand advertising, but their spots had one very important hook that makes the image enhancement unique – the call to respond via toll-free number, “It is so easy to just pick up the phone and call!”