What is the Difference Between Direct Sales and Direct Marketing?

Organizations use marketing techniques to reach out to more and more people. Every bank and financial institution wants to build its personal brand and focus on selling its product. What sets every company apart is the different ways they market their products. In this article, we will discuss the meaning of direct selling and direct marketing, when companies apply these techniques, the differences in their meaning, and whether they have any similarities between them. 

What are direct marketing and direct selling?

Organizations can directly reach out to their target audience through calls, emails, texts, print ads, mail, and so on. Direct marketing enables companies to niche down and identify a particular demographic of people, who they want to appeal to i.e. their target audience. Lenders can easily reach out to people on a global scale. Direct marketing is especially useful when testing new markets, or during product launches. However, if messages are not crafted with proper intent, or without the target audience in mind, they won’t yield any results. 

Direct selling is the process of individuals or parties selling products directly to consumers without involving any intermediaries like a regional distributor or wholesale seller in between. It is different from traditional retail sellers in the sense that DSA agents typically meet prospects online, or in non-work environments. Since DSA channel partners secure products directly from the manufacturers, they manage to sell them at a much lower price. 

Difference between direct sales and direct marketing

While their end goal may be the same, there are quite a few differences between direct sales and direct marketing. 

Direct marketing is a promotional tool, while direct selling relies on individual efforts

The biggest difference between direct sales and direct marketing is that individual salespersons directly sell products to customers, but in direct marketing companies directly reach out to interested prospects. Direct selling agents may also be associated with a company, but they reach out to prospects and make sales pitches themselves. Direct marketing reaches a larger number of people, however, direct selling agents are likely to make higher conversions because of their personalized approach. 

Direct selling uses salespersons, and direct marketing uses multiple channels

Direct marketing uses several channels, both online and offline, like print ads, emails, letters, texts, and calls to inform prospects of their upcoming launches and existing products. In direct selling, salespersons reach out to prospects like fresh graduates and new parents, who may be interested in trying their products. In other words, direct selling is more engaging and personalized than sending mass messages. Although banks and NBFCs insert a prospect’s name and location, the message is crafted keeping the general audience in mind. 

Direct selling is slightly costlier than direct marketing

Organizations need to identify their ideal customer segments and craft a promotional message only once. Sending emails, texting, or calling prospects is quite inexpensive when compared to recruiting direct selling agents. Although sales pitches also require revisions from time to time, it is not nearly as expensive as paying DSA agents a cut from the total amount a company earns from selling their products.

Direct marketing may annoy prospects, if not done correctly

Lenders must monitor customer click rates and drop-offs to understand if their promotional messages are yielding any results. While there are analytical tools in place to help companies understand such details, it is quite easy to annoy a large demographic with a simple grammatical error. If companies do not offer valuable tips or use clickbait titles that have no relation to their product, prospects might flag their message or email as spam, and consciously avoid opening their messages in the future. 

Direct marketing is more impersonal in nature than direct sales

Direct marketing involves sending promotional messages and product information to a group of targeted individuals, who may be genuinely interested in buying a company’s products. Messages are personalized with the recipient’s name and location, however, the contents of the text are largely impersonal. 

DSA agents have one-on-one interactions with prospects, where a much more personal connection is established. Since DSA agents are the first point of contact between customers and the company, they are also responsible for resolving each and every one of their queries. Direct selling agents not only promote their company’s products but also help their clients find the best product suited to their needs. 

Direct marketing has a global reach, while direct selling has limited coverage

Direct selling has limited scope as compared to direct marketing techniques that can transfer messages across the globe with a single click. In direct selling, agents conduct virtual or in-person, one-on-one meetings with prospects. Hence, they can only work with a limited number of clients. 

Convenience is at the forefront of direct selling, while communication is key in direct marketing

While direct selling ensures that prospects do not have to deal with the hassles of in-person retail shopping like standing at a counter, or dealing with rude salespersons, direct marketing is aimed at delivering information directly to a prospect’s inbox. The best way a company can combine these approaches is to send valuable tips and information consistently to a person’s inbox, and gain their trust so that they will be compelled to reach out to the company if they require their services. Then, the company can connect their DSA agents with the prospects, who can take it forward. 

Direct marketing continues to interact with consumers post-sales, while direct selling is done only until the product is sold 

DSA agents resolve customer queries and recommend the best products to them, however, their personal interaction continues only until the product is sold. Prospects may contact them if they run into any problems, however, largely their contact diminishes after the sale. Companies continue to email, call, or text their existing clients long after making a sale to establish a long-standing relationship with them. It is to ensure that in the future if they once again need anything, they may contact the company that once serviced them. 

Can companies do both?

The biggest similarity between direct selling and direct marketing is that their end goal is the same. Both approaches are aimed at reaching the most number of people, who would be genuinely interested in buying a company’s products. Most banks and NBFCs, who want to expand their reach, can apply a combination of both direct sales and direct marketing techniques. Financial organizations may send their product recommendations and sales pitches over calls, emails, and texts, as well as recruit DSA agents for maximum reach. Direct selling agents will represent the company and earn a commission from their efforts, or in some cases, they may earn directly from making sales. 

Lending firms like Andromeda Loans recruit DSA loan agents to sell financial products. Their agents earn a percentage of the total loan amount they sell. Such DSA channel partners also take on added responsibilities like resolving customer queries, giving financial advice, and maintaining records. 

Is direct selling a pyramid scheme?

While direct selling on a large scale may seem like a multi-marketing pyramid scheme, it is completely different. Direct selling agents focus on using innovative marketing strategies to sell products to consumers. They earn a commission fee for every product they sell. There is no emphasis on recruiting other agents and receiving a commission from including more people in the trade. 

Does direct marketing use social media?

While traditional direct marketing was focused solely on calling, texting, or emailing prospects to promote products, in today’s digital age having an online presence is a must. Nowadays, almost every individual checks out a company’s posts on social media platforms before buying from them. Blogging or posting on social media enables a company to establish itself as a thought leader in their niche. Social media is also an excellent way for companies to interact with prospects and gauge how many of them are genuinely interested in buying from them. Customers can deliver feedback easily and companies can implement it to improve their products to cater to their needs. 

To conclude 

Direct selling focuses on delivering quality products and ensuring a hassle-free experience for customers without any middlemen interference. On the other hand, direct marketing is a promotional and multichannel tool used to reach out to people.  It could be said that direct selling and direct marketing go hand in hand as the end goal is the same i.e expand reach and boost sales.