Analyze Decision Process to Boost Results
* A list of CIO, MIS, DP or other such title selects is rented, and one mailing piece is sent to all of them.
* An ad is placed in a suitable trade magazine, and much attention is focused on the individual who responds.
* An effort to up-sell or cross-sell current customers is initiated, and a product-focused mailing is sent to the entire list of names on the customer file.
* A trade show is held, and the list of the people who stopped by the booth is used for a follow-up mailing or telemarketing effort.
From one viewpoint, these efforts are an improvement over the days of sending everything to the sales or business partner network and trusting them to pursue the sale. On the other hand, they aren't as effective as they could be. With a little analysis of the decision process, a dramatic improvement in results can be achieved.
User-based hi-tech decision process. In the old days of the "big iron," or mainframe computing, all the decisions were made within the computer department. In fact, companies like IBM even took up permanent residences in the computer departments of large customers. Subsequent hardware or software applications were "sent down" to other departments when the MIS group thought it was appropriate. Today, the user groups are making many of these same decisions and the MIS department may be involved as an adviser. As an example, sales force automation software selection and the laptop decision is almost always being made by the sales department. Sometimes, the MIS group doesn't even know what is being bought until there is a problem and it's brought in to help.
Of course, this change in "decision center" has been enabled by the growth of the PC and related software coupled with the delays we all have experienced in waiting for the MIS group to respond to requests. This change to how hi-tech decisions are made is widely known, yet direct marketers frequently ignore this new decision process and bang away solely at the MIS group with mailings and telephone calls.
Company size and the decision process. Another obvious example of how a decision process varies is to view it from the perspective of the size of the company you are attempting to sell. As an example, let's divide up the universe into large, medium and small companies. Using employee size as the criteria, think of the decision process that occurs in companies of more than 250, 50 to 250 and less than 50 employees.
Now pretend you're a sales person. For each of these companies, who would you call upon to sell a hi-tech product? Since I was in sales for 15 years, I'll give you my quick analysis of the key persons. For large companies, depending on the application, there would be at least four people. First, the head of the group that would be using the application, let's say the vice president of sales for SFA and the sales support or sales operation manager. Next would be the assigned person in the purchasing department and, finally, the MIS individual in charge of serving the marketing and sales group.
For medium-sized companies, my target might be three people. Again the sales vice president, the MIS department head and the senior vice president of sales and marketing or even the president. Finally, for the small organization, only one person would be my target, and that would be the president.
You may disagree with my choices or most likely have a different hi-tech product or service to sell and, therefore, a different set of people to target. That's fine, as the point of this exercise is to force your direct marketing thinking to focus on the decision process of the company. Once this "decision tree" is identified, then the tough job is to obtain a list that matches this targeting process. That's another issue, but it's only after you have thought out the decision process that list selection becomes the job, not vice versa.
Company type and the decision process. A similar thought process should be applied to the various types of companies that are being targeted and how the nature of the company (SIC code) will affect who the campaign should include. One of the biggest macro differences is between manufacturing and service firms. Let's take a middle-sized chemical manufacturer and a community bank as two good segments and let's stay with the SFA application. For the chemical company, the decision tree for middle-sized companies, as outlined above, should be satisfactory, but not for the bank. For the bank, the group interested in SFA is the commercial loan officers. The key person might, therefore, be the senior vice president of commercial banking and/or the director of marketing. There is no sales manager in banks, and the marketing department is most likely in charge of the customer list.
Your market segments, when viewed in this light, should uncover significant differences as to the decision process and thus your individuals for targeting. Other segments that have vastly different decision processes are companies that have adopted technology vs. those that have not, companies with many locations vs. one central location and organizations with centralized purchasing vs. decentralized or autonomous groups. Again, my point is to catalyze your thinking to be more specific to who will be making and influencing the decision on your product or service. This new approach will then not rely on a mass mailing to drive inquires or leads. While this shotgun approach will produce some results, it will underperform what might have been achieved with a decision tree targeting process.
The role of relevancy. The preceding thought process applied to the identification of the decision tree has another benefit that will produce even greater results. Simply, the relevancy of the message and offer can be tightly constructed to appeal to the various people in the decision tree based on their roles. When this is done, a significant increase in response rates is seen. Sending these different messages to all the people in the same company at the same time can even further boost results. This blitz approach to one company has proved time and again to be effective. This is particularly true when that value and complexity of the sale is high.
Pre-qualification of leads. Finally, when armed with this decision tree for your market segments, there is another process that can add to the cost effectiveness of direct marketing. Simply, when a response is received from an ad, a trade show or other form of marketing communication program, you have an opportunity to match it against the decision tree to determine how valuable the inquiry or response might be. Armed with this information, an evaluation can be made on how much resource or follow-up effort should be allocated to this lead. We all are faced with a limited resource and budget, and this will maximize those resources and apply them to the best opportunities.
John M. Coe is president of Database Marketing Associates Inc., Scottsdale, AZ, a business-to-business consulting, education and training firm. He can be reached at 888/714-5544.