Direct Marketing – Work in These Four Areas to Lift Profitability

Direct marketing is based on data about individual customer responses and transactions which are used to target, execute and control marketing actions meant to start and develop profitable customer relationship in the short-term as well as the long-term. The strength of direct marketing is that its profitability is easy to measure compared to mass consumer approach to marketing. Since this is so, it’s necessary to pay attention to the factors that impact that bottom line result.

Here we’ll look at four of those factors that affect the profitability of direct marketing operations.

1. Objective. The objective of the project must be clearly stated in SMART (Specific, Measurable, Achievable, Realistic) terms. Common areas for objectives include customer acquisition, customer retention and winning back old customers. Customer acquisition is more costly than the others.

2. Life Time Value of the Customer. This is a calculation of what a customer in a category will contribute to profit and overheads during their “lifetime”, that is, while they remain a customer. This measure is affected by customer retention rate and inflation. It’s used for deciding how much to spend on a customer and to assess the best sources of customers. If you increase retention rate, then LTV will increase assuming price does not fall, which is unlikely. If for any reason inflation rate drops, then LTV will increase also, all things being equal.

3. Return on Investment. There are several ways of computing this statistic. The simplest method is the sales value method, in which you divide the sales value by the marketing cost. This measure is useful because it focuses on two main drivers of the amount of profit. There are three ways to increase ROI. One is to raise sales value and keep marketing cost the same. Two, bring down marketing cost and maintain sales value. Three, increase sales value proportionally more than marketing cost.

4. Allowable Marketing Cost. This measure is meant to inject discipline into the cost of marketing. It sets the upper limit to what you can spend to acquire new customers. Going above it, and I guarantee you will not be loved, because it means erosion of the desired profit unless, of course, product cost and distribution cost some how fall. It’s arrived at by netting out cost of goods, distribution cost and desired profit from sales value (All per unit).

Having set the objective in the area of interest, the profitability of a direct marketing campaign depends on the key efficiency measures of life time value of customer, return on investment and marketing cost management. These concepts are also useful even if you are doing business online.

The Exclusivity of Direct Selling

When you decide to become part of direct selling companies, you have to be ready for a unique and specialized form of marketing and sales. Entities involved in this trade offer close to 80 categories in commodities and services. These can be beauty and health products, clothes, fashion accessories, small appliances, home solutions, cook ware, items for beautification and, gardening. If you want to be successful in direct selling, it is important to opt for a product that you love and use personally.

Different Approach and Vision
Your first step is to get acquainted not only with the concept and techniques of direct selling but the company and goods as well. This can be done by going to product demonstrations or parties where sales consultants get the chance to introduce their merchandise. You also need to learn the company’s mission and vision, culture and way of life. Direct sellers, who love their products, are very capable of charming other people using their passion, sense of excitement and persuasive skills.

One of the finer parts of direct selling is the low cost for entry and you get a complete kit of product samples and other materials that you need to get started. Give it a try because you lose nothing and have everything to gain. Once you have selected the company that you feel will give you the satisfaction and financial gains you expect, then it is time start. You need to be adaptable but one of the first things to do is to arrange a schedule that will conform to your selling goals. This is what flexibility means when you sign up with direct selling companies.

Brand New Venture
Whatever your reasons are in getting into the world of directs selling; this is absolutely a brand new enterprise with different strategies. So you need to be ready for the new marketing concept. The training that comes with the direct selling experience is particularly important when it comes to making representations regarding the company, its products and services, and the expectations you may have when considering to become a direct seller.

Once you are part of this system, it is time to plan in building up your network in preparation for the widespread promotion of your products. You also need to identify high priority target customers. Likewise, devise a plan that will penetrate other target markets using your connections. It is advisable to study the success stories of other business units that have adopted this strategy.

The key benefit of becoming a member of direct selling companies is that you get hold of precious commodities to sell. All sales personnel are provided with substantial support in terms of marketing collaterals, sales proposals and promotional items. This technique is aimed at making the selling process easier for them. One basic guideline that you should consider before joining a direct selling firm is to join a firm that you are convinced will give you contentment and financial fulfillment. It is important to be well-informed about the features and benefits of the product that you will sell even before you start promoting it.

Successful Online Marketing Businesses – What Do 5% Do That the Other 95% Do Not?

Network marketers can be divided up into 95% and 5% groups. Ninety-five percent spend money, and more money, and more money, until they either get discouraged and give up, or are too broke to continue. Not many make it past the ninety-day mark in their internet marketing business. Fewer make it past the one-year mark. What gives? Isn’t online marketing supposed to be the money-making dreamland?

On the other hand, the five percent folks are making a killing — to some degree from the funds the 95% spend to gain the answers to their barren-bank-account dilemma. What makes the difference? What are the five-percenters doing that the 95%ers aren’t?

Ready? This is where I reveal the big secret. It all boils down to one … maybe two things.

1. ACTION. Read that again, ok? Action. The biggest “secret” I can share is that successful online marketers take action each day toward their goals. They do something each and every day to build out their marketing campaigns, coach their teams, connect with their leads. The results are cumulative over time. A successful marketer knows that the work they do today will yield results, maybe not today, but it will yield results. Don’t give up. Keep at it. Take action on some aspect of your business every day. The 95%ers spend money on great materials for their business, but they fail miserably when it comes to implementing what they learn. Don’t just think about it — do it!

2. Personal Growth. I know, I know. You thought I might be sharing some wisdom about how to trick a prospect into saying “yes” to your opportunity. Nope. The idea here is that the more you learn and grow into someone who is perceived as a leader, the more you will find yourself sought after. Yep, people who are interested in your opportunity will come looking for you. You won’t have to go searching for them, or randomly blasting e-mail or hounding family and friends. Read books. Lots of books. Marketing books, leadership books, books on business, books on relationships. Work from the inside out. Who you are speaks much louder than what you do. People are looking for a leader, for someone they can trust. If you can be that person, your marketing life will get a whole lot easier.

Of course, it’s not as simple as just implementing these two items in your online marketing business, but if you do, your chances of being a successful internet business entrepreneur can skyrocket.