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Let’s say you identify a new market, one that you think is going to be very receptive to your product. The cost of advertising to this market may be prohibitive: The best publications are frightfully expensive, and your ads couldn’t appear for six months, anyway. Direct marketing provides you with a way to conduct a test of this market relatively quickly, at a reasonable cost, and with convincing certitude.
You’ll know whether this is indeed the gold mine you hope it is. Perhaps the most common use of a marketing database is to generate a target list for a direct-mail campaign. Of course, direct mail also works with purchased lists.
Direct mail provides giant companies with the ability to target defined markets with specialized offers. You can target recipients very precisely. You can protect against overwhelming response. If you run an advertisement, you can’t know whether you’re going to get 10 responses or 10,000. For a small company, a powerful response to an ad can be even more disastrous than no response at all, since a poor reaction to a prospect’s response will likely damage your relationship even before it’s begun.