In today’s economy, companies need to drive sales from increasingly tighter markets. Yet they most often face this task with constrained resources. Hiring freezes, attrition, larger sales territories and reduced travel budgets force sales professionals and their management to do much more with less.
Sales professionals find their dwindling accounts under attack from equally hungry competitors, so more of their time is required to maintain existing accounts, leaving less time to develop new ones. Delivering a pile of unqualified sales leads from unqualified sources to an already overworked sales force only exacerbates the problem.
The main task of marketing communications professionals and their agencies under these trying conditions is to produce high-value leads from high-value segments that have the greatest potential for positive results.
At specialty materials companies such as National Starch and Chemical, a common definition of high-value segments is: Markets that are an inch wide and a mile deep. These markets have significant available sales from a limited number of targeted companies. With mergers, acquisitions and increasing consolidation in much of U.S. industry, many large markets belong to a few companies.
In several markets in which National Starch and Chemical participates, available sales dollars of $50 million to $100 million can come from as few as five to eight companies and their subsidiaries. Despite the small number of companies, the number of specifiers and buyers can be in the hundreds, many of whom are invisible to a sales representative.
Also, as familiar markets become played out, we have to look to new ones to maintain growth. Then the task grows more daunting because we’re on foreign turf and may not know the key players.
So how do we find these potential buyers in high-value markets and deliver qualified leads to the sales force? It ain’t easy! But by combining detective skills, good lists and data management we can unearth prospects.
When it comes to new markets or unfamiliar extensions of existing markets, we start with detective skills. By using a database, such as D&B Marketplace, we can begin to zero in on the key players. The first step is to locate in the database the few companies we already know. Then we see which 4-digit, 6-digit and 8-digit NAICS (SIC) codes they have in common. The 8-digit code is key in that it provides a very tight scope with manageable list sizes.
At this point, we have identified a universe of companies that share many of the characteristics of a known customer or qualified prospect. Using the same database software, we can filter for the size company or locale in which we want to play.
A list of companies is good; a list with functional titles, names and phone numbers is even better. To get that information, we typically go to trade magazines and rent a list with the qualifying criteria we’ve developed – SIC code, titles, company size and location. We like trade magazines’ lists because they have job titles and functions, are current and by subscribing, the contact has expressed interest in the industry. By merging the rented list with the D&B Marketplace list, we can produce a universe rich with data and contact information.
Now we have identified high-value markets and compiled a relevant list. How do we produce the high-value lead? We use two types of tools that either provide complex details about the prospect or generate an appointment for a sales presentation, depending on budget and sales objectives.
We’ve found that a survey with an incentive offer is the best approach when looking to generate large amounts of potential customer data, including a prospect’s process information, current and future needs, consumption of the product in question and competitive information.
Moreover, the method in which we structure the questions about a product in use teaches the survey respondents about the benefits of our products.
We have successfully used this technique with a control package that includes a #10 outbound envelope, personalized survey form, cover letter, incentive offer and #9 return envelope. From the three dozen or more packages we’ve sent in the past seven years, we’ve compiled these findings:
· Response rates of 8 percent to 36 percent.
· Re-mailing to nonrespondents lifts response rates 30 percent to 50 percent.
· Testing and changing incentives lift response 60 percent.
· A qualified lead cost of $10 to $30.
Recent data from one survey show $210,000 in new sales potential from a $9,000 direct marketing investment.
When immediate sales appointments are the goal of a high-value lead program, we rely on more costly three-dimensional packages for the following reasons:
· They get past the gatekeeper.
· They promote interactivity with the prospect.
· They include a physical manifestation of your selling concept.
· And who doesn’t like to get a package?
A typical package includes exterior graphics or shipping label with campaign theme, a brochure with offer and response mechanism and a $1-$4 premium, all in a corrugated container. The premium is chosen to represent one of the product benefits, such as a stopwatch for a product that can result in higher processing speeds. We expect the prospect to handle or play with the enclosed premium while reading the brochure. When this happens, we stand a greater chance to embed our sales message in the recipient’s brain.
The offer in the package is for a much-higher-priced premium in the same vein as the premium in the package: for example, a branded wristwatch as the follow-up for the $3.50 stopwatch. But the wristwatch is delivered in person in exchange for the prospect sitting through a sales presentation. This way, we can count on 30 minutes of a prospect’s time in exchange for the $40 we’ve spent on the direct mail package and gift.
Does a $40 package yield dividends? You bet. In cases where the marketing manager provides constant feedback to the marketing communications team, the results can be amazing. One such case history in the electronics industry produced this from a three-part campaign mailed to 170 targeted people:
· A 34 percent response rate.
· 28 sample requests.
· Development work with nine companies.
· First-year sales of $200,000.
· Second-year business grows to $500,000.
· Third-year sales of $1 million.
Good results from a $10,000 investment.
Generating high-value leads from high-value segments takes hard work – from market investigation to list development to creative packages, plus measurements and analysis. But this technique can produce tangible results with amazing ROI numbers.
