Speaker: Institutions Have Vast Buying Power, Complex Structures

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NEW YORK -- Direct marketers who target institutions face multi-tiered structures with buying power, specific purchase timelines and restrictions as well as the benefit of tapping a growing market that holds a little more than half of the U.S. gross domestic product.

This is as per Mary English, director of strategic alliances at Mailings Clearing House, a Sweet Springs, MO, list services provider in institutional marketing. Ms. English presented at DM Days New York's "B2i: What It Is and Why It Matters to Business" session June 21.

"Ninety-five percent of the $470 billion K-12 market is being spent in public school," Ms. English said. "That's where the dollars are."

Healthcare providers are another top spender in the institutional space, while colleges and universities spend $270 billion annually. Annual institutional expenditure is estimated at $1.9 trillion.

Reaching this market requires a multichannel approach, or targeting people on various levels within the structure of the organization. Many institutions have buying rules that require approvals and purchase orders to be completed by people who don't actually initiate the order.

"A department head is going to be the person that first raises the flag for an item," Ms. English said. "They will probably be the one filling out, if not signing, the purchase order."

Mailings Clearing House recently surveyed local government offices to learn about their purchasing preferences. It found that though many governments have a bidding process for expenses, there are varying spend thresholds for year-round purchases.

"Any midsize city government will be spending more than the average business and have various department heads in charge of discretionary budgets," Ms. English said.

Overall, understanding the environment of the institution and targeting everyone who would be part of the purchase decisions were key to sales, she said.

"If you don't have a name at these larger institutions, [your mailer] is going into the trash," Ms. English said.

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