Direct sales and marketing encompasses a variety of techniques and strategies to reach a potential customer directly. In 2009, direct marketers spent almost $150 billion, which was responsible for more than $1.7 trillion in incremental sales. San Diego State University estimates that growth will continue as more companies develop an online presence and develop more ecommerce options. Direct selling and marketing isn't without its drawbacks, however, so companies should be aware of the pitfalls before embarking on this strategy.
Because direct sales and marketing involves an individual touchpoint with the consumer, certain techniques can cost your company in time. Door-to-door sales, kiosk sales and telesales, for example, require your salespeople to personally pitch each customer and take the time to close the deal. However, this can be a cost-effective strategy for companies that sell high-ticket products via a commission-based sales force. Purdue University also recommends using a direct selling strategy for seasonal products and startup enterprises.
Cost per Contact
Direct sales and marketing strategies often suffer from a high cost per contact. Although a direct-marketing technique such as an infomercial, for example, has a high entry cost, it has a wide reach, and you can use it multiple times. In contrast, each piece of mail in a direct-mail or catalog campaign has a steep price for a one-time contact with a potential consumer.
Direct selling and marketing uses a push strategy to get in front of consumers, but to many people, these techniques are an intrusion on their privacy. Unwanted catalogs frequently wind up in the trash, emails get sent to the spam folder and telephone calls go unanswered. The best way to make your direct-marketing strategies work without offending potential customers is to accurately determine who your consumer is and make your offer compelling.
Professionalism and Credibility
Too many small companies enter into direct marketing techniques to save on costs. If the lack of investment shows in the final product, you may lose customers before they even see or hear your message. If you plan to use strategies such as an online presence, an email marketing campaign or even something as simple as magazine inserts or coupons, cutting costs by using a DIY approach can harm both your company’s reputation and your sales.
Continuity of the Message
The message that your customer receives about your products is only as good as the salesperson that delivers it. If your company relies on personal selling to promote your products, you must invest in ongoing training programs and materials to ensure that your message is clear to each and every customer.
Potential for Scams
Job seekers who have become involved in what they thought were legitimate direct-selling jobs are often the subject of scams, particularly pyramid schemes and multilevel marketing activities. The World Federation of Direct Selling Associations recommends that you ask questions about the company, consult others who have been involved and verify the information the company gives to you.