Direct marketers proving more successful

Recent research suggests that direct marketers are enjoying more profitable Web-based exchanges than dot.coms due to more carefully planned Web strategies

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By  Barnaby Chesterman Published  January 28, 2001

According to research analysts, direct marketers are more likely than dot.coms to be successful. The reason being that direct marketers have been more careful in planning their Web site strategies.

According to the study, “The Direct Marketing Industry Online: Perspectives on 2001,” conducted by ActiveMedia Research and Millard Group and sponsored by the Direct Marketing Association, 36% of all direct marketers online are profitable. And this figure is expected to grow over the next couple of years.

The study also shows that e-commerce revenue marketers with offline ‘brick-and-mortar’ operations are anticipated to grow by 136% of the next year while the rest of the Web is only expanding at rate of 115%.

According to Ben Perez, president of Millard Group, the Internet is extending the sales base for direct marketers in terms of reaching new customers. “Rather than cannibalising sales from offline channels, direct-to-consumer direct marketers who sell online are finding that the majority of their visitors and buyers are brand new customers, not just offline customers buying through a new channel,” he said. “Furthermore, most direct marketers are expanding their sales reach geographically when they enter the e-commerce marketplace, both domestically and abroad.”

The survey identifies a relationship between consumer loyalty and profitability and Perez points out that sites attracting the most traffic are not necessarily the most profitable. Accordingly, the survey suggests that sites that allow customers to interact with customer service personnel have a lower incidence of fraud and other sales losses. “Good customer care creates a happier, more loyal online consumer,” added Perez.

H.R. Wientzen, president and CEO of the Direct Marketing Association, stated that the Web “gold rush” appears to be over with direct interactive marketers now stepping back to refocus on their site development and promotional or marketing practices. “The findings in this report reinforce the importance of the convergence of the proven direct marketing business models and interactive technologies,” he said.

The study was created to provide direct marketers with factual data about the impact of online marketing on the traditional direct marketing industry. Data was generated from an online survey, sampling over 500 direct marketing businesses.

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