Major Channels for Direct Marketing 321
ping lists. Streamline also keeps a database on what customers buy and when. Based
on each customer’s past behavior, the firm’s software creates a profile and automati-
cally sends e-mail reorder reminders when a customer is probably low on certain
items. The result: Streamline’s customers, who spend an average $6,000 a year, come
back for more 90 percent of the time.^6Public and Ethical Issues in Direct Marketing
Although direct marketers and their customers usually enjoy mutually rewarding rela-
tionships, a darker side occasionally emerges. Key public and ethical issues include:
➤ Irritation:Many people find the increasing number of hard-sell, direct-marketing
solicitations by phone, television, and e-mail to be a nuisance.
➤ Unfairness:Some direct marketers take advantage of impulsive or less sophisticated
buyers. Television shopping channels and infomercials—extended-length, direct-
response commercials that appear to be television shows demonstrating or
discussing a product—may be the worst culprits. They feature smooth-talking hosts,
elaborate demonstrations, claims of drastic or short-time price reductions, and easy
purchasing to capture buyers who have low sales resistance.
➤ Deception and fraud:The Federal Trade Commission receives thousands of
complaints annually about scams and frauds. Some direct marketers exaggerate
claims about products and performance, some political fundraisers use
questionable gimmicks such as envelopes that resemble official documents, and
some nonprofit organizations pretend to conduct surveys when they are actually
trying to identify donors.
➤ Invasion of privacy:Critics worry that marketers may know too much about their
customers’ lives, and that they may use this knowledge to take unfair advantage.
American Express, long regarded as a leader on privacy issues, does not sell
information on specific customer transactions. However, Amex found itself the
target of consumer outrage when it announced a deal to make data on 175 million
Americans available to any merchant who accepts AmEx cards. The uproar
prompted Amex to kill the plan. America Online, also targeted by privacy advocates,
wound up junking a plan to sell subscribers’ telephone numbers.^7
People in the direct-marketing industry are working on addressing these issues.
They know that, left untended, such problems will lead to increasingly negative con-
sumer attitudes, lower response rates, and calls for stricter government regulation. In
the final analysis, most direct marketers want the same thing that consumers want:
honest and well-designed marketing offers targeted only to those consumers who
appreciate hearing about the offer.
MAJOR CHANNELS FOR DIRECT MARKETING
Direct marketers can use a number of channels for reaching prospects and customers.
These include face-to-face selling, direct mail, catalog marketing, telemarketing, tele-
vision and other direct-response media, kiosk marketing, and on-line channels.
Face-to-Face Selling
The original and oldest form of direct marketing is the field sales call. Today, most
industrial companies rely heavily on a professional sales force to locate prospects,
develop them into customers, and grow the business. Or they hire manufacturers’ rep-