Do You Want Money or Love? Direct Response vs. Brand Marketing (Part 1)

Dick Talens
15 Mar
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Anyone will tell you the importance of building a strong brand; the same goes for importance of increasing revenue.

But what if you had to pick between the two?

Whether you know it or not, you do.

There’s a tradeoff between love (brand) and money (direct response)

This isn’t to say that you can’t have both in the long run. Fame and fortune are two sides of the same coin.

But at the marginal level–individual ads, campaigns, landing pages, etc–a necessary trade off happens because of the tension between two types of marketing: brand and direct response.

Here, you’ll learn:

  • The difference between brand and direct response marketing
  • Their pros and cons, as well as how to pick between the two

But first, we’re going to introduce a real-life example that we’ll refer to throughout this post.

Ironically has nothing to do with digital marketing. Or so it would seem (cue foreshadowing music).

Few people have less brand equity than this guy.

If you’ve ever been to New York City, you’ll recognize this image. Feel free to skip the explanation of who this person is.

This is one of dozens of ticket sellers at Times Square at all times of day who will approach you to buy tickets to a comedy show.

They’re aggressive in their pitch; they’re not afraid to get in your face with pressure tactics. If someone doesn’t like them, they just move on to the next person.

In all fairness, they’re just doing their job. But it would probably be a fair statement to say they’re highly disliked by anyone who recognizes their occupation.

At this point, you might be wondering how this relates to digital marketing.

It’s because long before the Internet, this person was the original popup ad.

Brand vs. Direct Response

Pretend you’re the general manager of a comedy show in Times Square, where hundreds of thousands of tourists walk by daily.

Your job is to grow your show’s business using your ten real-life sales minions.

You can pick between one of the following tactics for them to follow:

  • “Go up to people who look like they’re not in a hurry. Ask for permission to tell them a joke. Tell it, then walk away in hopes that they’ll remember our show and eventually buy tickets.
  • “Approach as many people as possible. Move on if they’re not interested. Aggressively get them to buy tickets ASAP if they are.

The first tactic represents pure brand marketing whereas the second represents pure direct response Marketing.

Brand Marketing focuses on building a long-term relationship with potential customers by increasing awareness, loyalty, and trust–even if that means spending time and money now without seeing anything in return.

Direct Response Marketing focuses on encouraging potential customers to take some action now in order to maximize your objective, such as increase sales.

They’re two opposite things. Why?

You can’t get someone to take action now without being at least a little bit pushy, which will take away from some level of trust. Similarly, if you truly only care about a relationship with a customer over the long term, you can’t ask them for anything now.

That is to say, you can maximize love (i.e. brand) or maximize money (i.e. conversions), but you can’t maximize both.

The maximum level of effectiveness in each category is constrained to the green line.

Fortunately, you can get some levels of each and meet somewhere in the middle.

Using our ongoing example, perhaps you can instruct your team to engage with someone, tell them a joke, then gently mention where to buy tickets to a comedy show.

Because of this, brand and direct response marketing live on a spectrum where you’ll likely pick somewhere in between both extremes.

The optimal level of “aggressiveness” depends on factors such as your product, target audience, etc.

In our example, pure Direct Response makes the most sense for our objectives; there are a lot of people in Times Square, most of whom won’t be around in a few days, so you have to get as many as possible to act now.

Where Should You Be on the Direct Response vs. Brand Spectrum?

First off, unless you’re Coca Cola, Red Bull, or a company with mass distribution and sitting on a mountain of cash, you should never be here.

The problem with brand marketing is that if you’re not asking your audience to take a certain action, it will take a lot of impressions (i.e. money) before you see a return on your marketing.

Most people will want to avoid the extreme left end of the spectrum

Focusing too much on brand is the biggest mistake that new companies make. In fact, you can greatly reduce (and sometimes eliminate) the downsides of Direct Response with technology (our next article focuses more on this)

The optimal spot on the spectrum boils down to the tradeoff between extracting now vs. later. It’s different for every company, but here are a few important factors to start thinking about:

  • Price: Higher priced items take more trust and interactions to get a user to purchase.
  • First Purchase as a % of Lifetime Value: Is the customer’s first purchase relatively small compared to how much you expect from them in the future (subscription products) or are they making a large purchase and you don’t expect to see them again (used cars)?
  • Industry: Industries have different norms. Gyms, for example, are expected to be aggressive when it comes to selling pursuing customers.
  • Product: Is there a risk in using your product, in which case it requires more trust (e.g. baby cradles) or will people purchase it spontaneously just to try it (energy drinks)?
  • Target Audience: Some audiences are more susceptible to sales tactics. For example, click through rates typically positively correlate with less education or older audiences.
Direct ResponseBrand
Low price / Low considerationHigh price / High consideration
Customers might only purchase from you onceCustomers may purchase many times throughout their life
People are used to many companies in your industry pushing them aggressively and/or competing on pricePeople aren’t used to your industry selling aggressively OR all of your competitors do this and there is an opportunity to go against the grain
People purchase your product to solve a specific pain pointPeople purchase your product as an expression
Customers face major consequences if your product failsCustomers don’t face any consequences if your product fails
Older audienceYounger audience
Less tech savvyTech early adopters

Your location on the brand vs. direct response spectrum will likely be somewhere here:

You’ll probably notice that the ideal area skews towards direct response on the right side.

But what about the people we’ll lose by selling too aggressively?

In Part 2, you’ll see how technology can be applied to allow us to get both money and love.

Dick Talens
Co-founder & Head Lecturer
Mint Academy