Make the Most of BTB's Unique DM QualitiesConventional wisdom holds that business-to-business and business-to-consumer direct marketing are very different, with most people thinking that BTB offers the greater challenge. Years working in both arenas convince me that BTB marketers need to overcome special barriers, but that these are more a matter of degree than substance. Direct marketing to businesses even offers some advantages.
Here are some common problems for BTB marketers and how to minimize them:
Size. The greatest handicap most BTB marketers face is their relatively small size. A typical focus on narrow target markets means much smaller customer and prospect universes. This often results in BTB firms getting less respect and attention from vendors and fewer economies of scale. Many print, brokerage, list service, creative and other DM support service organizations won't fight for this business, and sometimes even turn it down. Seeing a smaller potential, they don't adapt their services to BTB needs or provide the level of support larger consumer mailers often obtain.
The best way to overcome this is to work with service vendors who've built their fortunes around BTB. Though few in number, they've adapted to business marketing needs and accept that individual accounts will be smaller.
Another downside tougher to overcome is that low volume limits the ability to test creative, offer and other alternatives. BTB marketers more often must rely on experience or instinct to pick winners, reserving tests only for factors crucial to success.
List hygiene. Keeping business buyer files clean also can be a problem. NCOA doesn't work at all at the individual name level and is less likely to pick up business than home address changes. Myriad complex address formats and job titles pose challenges to data entry and list unduplication.
This requires stricter standards and controls on data entry, routinely asking customers to verify name/address detail including the names of other buyers at a site, and creative use of specialists in business name/address dupe identification.
BTB specialists offer greater match rule flexibility. They let the marketer define the meaning of a unique name, such as one name per company, names only, names or titles. To improve the odds of finding proper matches, their programs contain logic to identify and better parse personal names, titles, company names and complex addresses, and to compare unequal amounts of name/address detail.
Response tracking. Getting customers to provide source and/or customer number codes is difficult for many BTB marketers. In some firms it can be months between promotion and final sale. In more cases a buyer name and address will not be the same as the prospect contacted. This is particularly true where large companies, government or educational institutions are targets.
Overcoming this challenge to accurate analysis requires stricter adherence to measures also applicable in consumer markets. Place promotion codes in easy-to-find places and tell customers they'll be asked to provide them. Train and supervise customer service reps on the best ways to obtain codes. If giving a code allows CSRs quicker access to a customer or prospect record, tell prospects they'll get faster service if they have the number handy.
Make source code use on the phone or Web mandatory for customers who want to take advantage of special discounts. Matching uncoded orders back to prospect names mailed typically identifies half of them. Taking these steps normally results in a high enough level of coded orders to permit reliable analysis, though capture rates will still be 5 to 10 points below consumer averages.
Media options. The greatest misconception about BTB is that a lack of response lists limits prospecting. Most BTB firms can prospect successfully to subscriber, attendee, compiled and other non-response lists, many of which offer more and better targeting than do their consumer counterparts.
These lists not only provide lots of names, but allow for creative application of name and title selects, title slugging and rules to control the number of pieces sent to each prospect worksite based on its potential. Well-selected non-response lists often out-pull typically less-focused response options.
While the above issues are legitimate challenges to BTB marketers, the following represent significant opportunities.
· Easy, inexpensive access to accurate demographics. "Firmographics" like SIC, employee size or industry-specific values like number of beds or students are much more likely to separate good from poor prospects than are comparable values like age or income in consumer markets. Continued availability of this information is also less threatened by growing restrictions from privacy legislation.
· Average order sizes are typically larger and lifetime value of a customer higher. This lets marketers set higher acquisition cost limits. It also lets them fashion offers tied to a wider range of purchase potential.
· Smaller customer bases make it easier to personalize communication and customize cross- and upsell.
· International start-up is easier because business lists and outbound telemarketing don't suffer from restrictions on consumer list and phone use. Compiled business and subscriber lists are cheaper and more readily available overseas than are response lists.
Though running a BTB direct marketing business is not easy, it shouldn't be seen as more challenging than managing a consumer business. The two are more alike than not with the largest differences owing to scale, special addressing and tracking needs. Each can benefit from lessons learned or managers trained in the other.