What is Direct Response Marketing?
Direct response marketing is marketing that focuses on getting potential customers to take immediate specific action. For example:
Nike sends me an email with a 10% off coupon during the month of my birthday.
This simple advertisement contains critical elements of direct response marketing.
- Personalization (my name and birthday)
- Compelling Offer (10% Off)
- Clear Call to Action ("Shop Now" button)
- Clear Timeline (only during my birthday month)
The power of direct response marketing doesn't come from emails like that (in fact text messaging is much more effective than email anyway). It comes by taking a prospect who doesn't know your company (cold traffic) and leading them down a path to become a loyal customer. You do it through funnels.
What is a direct response funnel?
The goal of a direct response funnel is to put $1 of advertising in and to get $2 of revenue out.
All businesses have elements of direct response marketing. If they didn't, they'd run out of business! A well-thought-out, throughly tested, and optimized funnel is the key to most businesses' ability to scale.
A good direct response funnel consists of small action steps that take a customer closer and closer to a purchase. For example, a funnel for a financial advisor might consists of 5 steps before a customer makes a purchase.
Step #1: Register for a Free Webinar
The advisor runs paid ads on different platforms to get a prospect to register for the webinar. Focus on making compelling ads to a compelling webinar topic for a specific target audience.
Step #2: Attend the Webinar and Watch
Not only do you want people to register the webinar but you want them to attend the webinar and watch it until the end. At the end of the webinar you will have your call to action that will move them from just watching the webinar to becoming a potential customer. This can be an application, scheduled appointment, or sale.
Step #3: Schedule an Appointment
The call to action from this webinar would be for them to schedule and appointment with the advisor to go over their own retirement plan. The content of the webinar has to be compelling enough that they want to do this.
Step #4: Pitch them a Financial Plan
At this point, clients will already have had a positive experience during your webinar and all the communication that happens before they get to your door. The better your communication is, the higher your close rate will be.
Step #5: Give them the Plan Pitch Long-term Advising
This is the ultimate goal that they will become long-term customers where you can generate recurring revenue. Funnels work best for high ticket items and continuity programs like advising.
Not everyone who starts at the top of the funnel will make it to the end. The key is to track your metrics and optimize the funnel so that if you spend $1 in advertising you get $2 back, or even better, $10-$20 over the lifetime of the client.
What are the benefits of direct response marketing?
1. You Get a Direct ROI: When you set up campaigns correctly, you can track all of your business metrics. Some of the key metrics tracked from the above example:
- Cost Per Registration
- Webinar Attendance Rate
- Webinar Close Rate (How many people schedule an appointment)
- Show Rate for Appointments
- Close Rate for Appointments
Once you know your numbers, you can optimize different parts of the funnel until it starts to work for you.
2. You Create a Clear Path: many people who advertise today send paid traffic directly to their home page and find out after spending $10,000 or more that it doesn't produce results. When you create a funnel, you are creating a clear path to send your clients. It's a process that helps customers to start building a relationship with your business.
3. You Control Your Fate: when you've built a marketing funnel that works for your business, then you've won. You don't need to rely on partner traffic or affiliates. You've created your own channel to which you can create as much business as you can handle.
Direct response marketing doesn't have to be pushy or ugly.
The reason many brand marketers shy away from direct response marketing is because of poor funnels that are pushy or ugly. It doesn't have to be that way! If you really know and understand your audience, then you can make a funnel that works without compromising your brand. In fact, if done right it will build brand awareness and goodwill.
Questions? Let's talk shop!