Government Decisions Puts Spotlight On Business-To-Institution Market
"A large number of marketers are getting sales out of this market, but they don't really understand how it's different from what they're doing in other BTB-type marketing," said Kirk Chritton, director of marketing and product development at MCH, Sweet Springs, MO.
The BTI market, of which business-to-government institution segments are a subset, also includes educational institutions such as public schools; religious institutions such as churches and temples; and healthcare institutions, such as hospitals, nursing homes and clinics. K-12 education, religious expenditures and health care alone account for $1.5 trillion a year in spending, Chritton said, citing industry figures.
MCH, formerly known as Mailings Clearing House and Healthcare Data Services, claims to have coined the term business-to-institution marketing and provides these types of names from its BTI database of more than 4.9 million decision makers at more than 1.3 million educational, healthcare, religious and government institutions.
Though other list providers have similar data in vertical markets, they don't have all the in-depth segments under one umbrella, according to Chritton. He said MCH's main competitors include Market Data Retrieval in the education market and SK&A in the healthcare market.
The BTI market is attractive right now for several reasons, Chritton said. In education, the Bush administration's No Child Left Behind Act is important as thousands of schools designated as failing are to receive large amounts of new local, state and federal funding. Each failing school is required to make significant changes to its instructional programs for the 2002-03 school year and spend above-average amounts on education-related materials. MCH has flagged 6,300 schools in its database that fall into the failing category under the act.
A specialist in the educational BTI market agreed that the act would be a boon for the segment.
"It is already becoming important to our customers," said Michael Subrizi, director of marketing at Market Data Retrieval, Shelton, CT, a D&B company. "We give a seminar series each year that talks about the landscape and the trends in the marketplace, and No Child Left Behind had a whole two-hour session dedicated to it this year."
Just as broadband providers benefited from the demand in the educational market a few years ago, Subrizi predicted that educational marketers focused on reading skills will grow as a result. The act not only provides money to failing schools, he added, but increases the overall education budget in general.
Also, the U.S. Supreme Court's recent decision on school vouchers for religious schools may cause dramatic changes in purchasing behavior of parochial schools and their affiliated churches, Chritton said. If more parents begin using such vouchers to send their children to parochial schools, these institutions will have more money to spend on educational materials and other necessary supplies.
Other segments of the BTI market being watched are health care and government, especially because of the increase in awareness of public health and safety since Sept. 11.
Many BTB marketers already are getting some BTI sales but may not be targeting it as effectively as they could, Chritton said. For instance, marketers that select standard industry classifications, or SIC codes, by sales volume miss out on many nonprofit service-based institutions because they don't have sales per se. And, since sales volume is a typical BTB select, institutions often get passed over.
Chritton recommended marketing to institutions differently than other types of businesses. His tips included considering timing issues for these market segments. Seasonal buying peaks are driven by school years, corporate calendars and religious holidays, among other things.
Also, he said to consider creating mail pieces targeted to specific large institutional segments. For example, put a school-related cover on catalogs sent to educational institutions.
"BTB marketers may be surprised at how much of their sales can come out of this segment," Chritton said.