Small and medium-sized businesses are shifting attention to direct response marketing and other revenue-driving tactics in 2023, and here is why:
Small businesses waste an average of 26% of their marketing budgets on ineffective channels and strategies1. The average marketing budget for small businesses is around 10% of annual revenue2. This is a significant amount of money for most businesses, some of which far exceed the average amount! Most often, business owners do not adequately prepare for their company’s marketing needs.<
Most small businesses spend a tremendous amount of time and budget on long-term branding. Long-term branding is required for direct response marketing to work, but it needs to be combined with short-term revenue-generating activities. A balanced marketing mix is critical to maintaining a viable business model for both the short and long term. Companies with less than 50 employees have a 3-person marketing team on average, whereas a company with 5,000+ employees may have upwards of 45 marketing employees3. Marketing teams usually direct 20 hours a week of their time toward brand-building activities4. A tremendous amount of money and resources are spent on marketing efforts!
What is Direct Response Marketing?
Direct response marketing is designed to quickly generate leads by encouraging people to take a specific action. In regard to digital advertising, this practice includes search advertising, conversation ads, lead generation ads, and click funnels. Traditional marketing aims to raise brand awareness, which is a slower process promoting long-term brand image. With long-term advertising, it may take time to see even the smallest results. Unlike traditional marketing, it’s much easier to track ROI and build relationships with customers using direct-response marketing. Accessing campaign performance at the moment of launch is easy!
Each campaign should have a specific goal. All direct-response marketing campaigns need to include the following:
Customer Centricity: In order to receive a response, campaigns must be customer-centric, or directly related to the value your business can provide. Customers will not take action if they can’t immediately tell why your campaign matters to them.
Clear CTA: Create a call to action that focuses on one specific outcome, such as:
- Follow the link below
- Subscribe to our newsletter
- Share this post on social media
- Buy now and receive a discount
- Refer your friends and receive a discount
Targeting and Personalization: Successful direct-response marketing campaigns are hyper-targeted to specific audiences and contain personalized messages. These messages speak to potential customers’ pain points, causing them to become interested immediately.
Urgency: Urgency is essential in order to entice a customer into instant action. Utilizing language that inspires a sense of urgency makes the customer feel like they’re missing out on something important. Some examples of urgent messages include:
- Limited-time offer
- Hurry! Only one left
- This is your last chance
- Don’t miss out
Alignment of sales and marketing
To create company-wide synergy and efficiency, sales and marketing teams need to row in the same direction. Sales and marketing have been a divided effort for decades. This separation causes severe misalignment in company goals and strategies. Sales teams are almost always in alignment with company goals, whereas marketing departments focus on “getting their name out there.” (Josh Mangum, CEO.) Marketers tend to focus on long-term branding assets, such as logos, mission statements, and social media.
Sales teams have a much easier time staying in line with company objectives. Marketing teams, however, frequently deviate from this alignment because most company objectives for small and mid-sized businesses (SMB) are short-term. SMBs do not usually think 3-5 years ahead. In fact, they are lucky if they’re looking 3-5 months ahead. Most of their objectives are centered around growth, new business acquisition, and revenue. In fact, the majority of SMBs in the US spend an average of $10-15k/yr on marketing and plan to spend even more in 20232.
Marketing teams tend to believe that the salesforce is too focused on the individual customer experience and are unaware of the larger market and future goals. In contrast, sales departments tend to believe that marketers are out of touch with what’s really happening with the customers “in the real world.” If sales and marketing teams coexist, they can work together to create value for the company and customers while growing sales and building market share.
Why is Direct Response Marketing a trend in 2023?
Direct Response Marketing is a trend in 2023 because it WORKS. There is a myriad of benefits associated with direct-response marketing including:
- Segmentation opportunities
- Measurable results
- Campaigns educate instead of sell
- Easier to focus on warm leads
- Stronger relationships with prospects
- Easier to personalize
- Higher response rates
Successful campaign examples:
- A newsletter with subscribe CTAs
- A survey
- A referral program
- Short form videos
- Social media ads
- Cornerstone content downloads
- Benes, R. (2018, March 23). Marketers waste about one-fourth of their budgets. Insider Intelligence. Retrieved December 20, 2022, from https://www.insiderintelligence.com/content/marketers-waste-about-one-fourth-of-their-budgets
- How much do small businesses spend on advertising? ppc. (n.d.). Retrieved December 20, 2022, from https://ppcexpo.com/blog/how-much-do-small-businesses-spend-on-advertising#:~:text=The%20US%20Small%20Business%20Administration,factors%20can%20alter%20this%20percentage.
- Kevinkevinkevinkevin, F. T. (2020, November 19). What is the average size of a marketing team. issuu. Retrieved December 20, 2022, from https://issuu.com/kevinkevinkevinkevin/docs/marketing_team_structures_report_2017/s/11347142
- Published: May 20, 2014L. U. N. 17. (2020, November 17). Small businesses spend 20 hours per week on marketing. Small Business Trends. Retrieved December 20, 2022, from https://smallbiztrends.com/2014/05/small-businesses-spend-20-hours-per-week-on-marketing.html
- Evolution, M. (n.d.). What is direct response marketing and advertising?: Marketing evolution. What is Direct Response Marketing and Advertising? | Marketing Evolution. Retrieved December 20, 2022, from https://www.marketingevolution.com/marketing-essentials/direct-response#:~:text=Direct%20response%20is%20a%20type,is%20to%20generate%20leads%20quickly.
- Dib, A. (2022, July 1). What is direct response marketing & why it works? Successwise. Retrieved December 20, 2022, from https://successwise.com/what-is-direct-response-marketing/#Marketing_Your_Small_Business_-_Why_Use_Direct_Response
- Ending the war between sales and marketing. Harvard Business Review. (2017, July 20). Retrieved December 20, 2022, from https://hbr.org/2006/07/ending-the-war-between-sales-and-marketing