Maximizing the ROI of Your Direct Marketing Dollars

1
Maximizing the ROI of Your Direct Marketing
Dollars
Prepared By Small Business Research Center
2
We all know not all prospects are of equal value.
We also know all customers are important, but
some are potentially more important than others.
Up until now we havent been able to effectively
size the market or logically pinpoint and
identify the prospects that represent the highest
revenue potential for our specific products and
services.
SBRC has developed a proven methodology to give
us this information.
3
What do we do?

• SBRC has amassed the most comprehensive database
  in the US on expenditures in the Small Medium
  Business (SMB) market
• This database includes
• Expenditures on products and services in more
  than 65 categories of spending
• Products and services like employee health
  insurance, bank fees, office equipment, PC
  computers and web site development
• Information on product and service usage, for
  approximately 100 categories of products and
  services
• Products and services like long distance
  telephone service, network storage devices,
  accounting software, legal fees, taxes and
  office supplies

4
Why we did it

• The B2B marketplace is focusing on the needs of
  small medium sized businesses.
• This market now represents more than 3.7
  trillion of purchasing power, exclusive of
  employee compensation.
• Marketers need a better way to gauge the size and
  potential of this market.
• They also need to understand the prospects with
  the highest potential to purchase their products.

5

• SBRC is now able to provide the sophisticated
  tools to achieve a better return on each dollar
  spent to acquire business.
• You will now be able to
• Better identify individual high value prospects
• Better identify additional revenue potential
  within your customer base
• Surpass the results of traditional market
  segmentation and other market analysis tools

6
How do we do it?
The SBRC methodology combines both survey and
macro economic data to provide reliable estimates
of market size and market composition. This
information also makes it possible to score
businesses by expenditures and likely
product/service usage.
7
THE METHODOLOGYCreation of The Database

• SBRC Conducts Detailed Surveys of Companies in
  the SMB Market.
• 2700 Initial Interviews
• Detailed, Expenditures (538) - Usage Purchase
  Decisions (388)
• Information Incorporated into SBRC Database
• 2. The Use of Large Scale National Benchmarking
  Surveys Significantly Expand the Predictive Power
  of Our Detailed Expenditure Surveys.
• Dept. Commerce, Labor, Federal Reserve
• Other Private Surveys, Global Insight
  
• 3. Updating Quarterly
• A. Tracks Changes
  Updates Info on Expenditures Usage
• B. Composition of SMB Market Firms
• C. Facilitates the Projection of Market
  Changes

8
THE METHODOLOGYCreation of The Database
(continued)

• Normalization
• A. Projecting from macro economic data,
  government data, industry and
  independent economic forecasting.
• B. SBRC establishes independent macro
  estimates of expenditures and usage.
• C. Survey information is
  normalized to insure that macro
  projections are accurate and that market segment
  numbers provide true estimates of market
  size.
• 5. The comprehensive models, using both
  macro-economic and survey data make it possible
  to normalize and model the purchasingbehavior of
  the SMB market by
• A. firm size
• B. NAICS/SIC
• C. census block group level

9
How can SBRC help you achieve your marketing
goals?

• LIST SCORING
• Find the best SMB prospects for marketing your
  products and services
• List Scoring (DB, IUSA, internal company list)
  to help you identify your best prospects,
  delivered ready to use
• Customized list Scoring, we can score only
  businesses that you want to target
• By geography (by state, by metropolitan area, by
  county, by zip code, by census block group, etc.)
• By company size (number of employees, sales
  revenue)
• By industry (NAICS/SIC)

10
How can SBRC help you achieve your marketing
goals?

• LIST SCORING
• Case Study 1 A provider of supplementary
  employee paid health care insurance wanted to
  identify the most likely prospects among
  companies in a specified geography. SBRC
  provided a DB list of companies in the targeted
  geography, in the targeted SICs and in the
  desired company size categories. This list was
  scored reflecting likelihood of providing these
  supplementary insurances to their employees. The
  top scoring companies (top 25) were targeted for
  direct marketing efforts, including direct mail
  and telemarketing.
• The results look very promising VP and
  Regional Manager

11
How can SBRC help you achieve your marketing
goals?

• LIST SCORING
• Case Study 2 An IT equipment VAR wanted to
  identify its most likely prospects in the SMB
  market in a new metropolitan market. SBRC scored
  an client-provided database so that the firm
  could focus its marketing resources on its most
  likely prospects. The program was a resounding
  success, yielding hit rates 3 times those of
  their typical marketing programs.
• This is a definite improvement over our
  traditional models for targeting prospects
  Marketing Manager

12
How can SBRC help you achieve your marketing
goals?

• B. CUSTOMER SCORING
• We can provide scores on you existing customers
  which will enable you to understand the
  characteristics of your best customers.
• The result of this scoring will help identify the
  industries, size, geography of your customer
  base.
• The result is a better method for targeting
  potential prospects that look like your best
  customers
• If you are using a customer acquisition scoring
  model this will add another predictive variable
  to your model.

13
How can SBRC help you achieve your marketing
goals?

• C. MARKET SIZING
• SBRC helps you define your market potential and
  tells you where to focus your marketing efforts.
• MARKET SHARE
• How big is your market vs. that of your
  competitors?
• How much have you gained on your competitors?
• LOCATION (by state, by metropolitan area, by
  county, by zip code, by census block group, etc.)
• What are the best geographic markets for your
  products and services?
• BUSINESS SIZE CLASS (number of employees, sales
  revenue)
• How large are your best sales prospects?
• Where is your product niche?
• INDUSTRY (NAICS/SIC)
• Which industries should be the focus of your
  marketing efforts?
• FORECAST GROWTH
• How rapidly is your target market segment
  expected to grow?

14
SBRC can determine your potential market by

• Geography
• NAICS/SIC
• Company size

15

• MARKET SIZING EXAMPLE 1Total Expenditures
  Milwaukee MarketSpending on Banking Services -
  Small Business (Fewer than 20 Employees) -

Bottom 15 Industries
Top 15 Industries
16

• SBRC can also tell you the tell you how much
  firms spend compared with the average firm
  expenditure for your product or service.
• We can provide these average expenditures by
• Geography
• NAICS/SIC
• Company size

17
MARKET SIZING EXAMPLE 2Average Expenditures
Milwaukee MarketSpending on Banking Services-
Small Business (Fewer than 20 Employees) -
Bottom 15 Industries
Top 15 Industries
Average Spending on Banking Services 963
18
SBRC provides market sizing and scoring for more
than 65 detailed categories of SMB expenditures
19
Detailed Listing of Expense Categories
20
Industries we serve and typical assignments

• Telecom
• Forecasting total market product demand by
  industry sector
• Projecting business demand for broadband and
  high-speed services
• Financial services
• Determining market potential for branch
  location
• Targeting prospects for new banking services
• Identifying leasing prospects
• Identifying prospects for supplemental health
  insurance
• IT Equipment
• Targeting potential users of routers
• Forecasting demand for computer hardware and
  equipment by metropolitan market
• Likelihood of usage of network storage
  (penetration rates) by firm size

21
Industries we serve and typical
assignments(continued)

• Energy/utilities
• Tracking energy expenditures by NAICS
• Growth rates by firm size and industry
• Office Equipment
• Targeting potential users of office equipment and
• supplies, e.g., stationary, office furniture,
  computers, etc
• Sizing the total market for these products
• Forecasting the demand for office equipment

22
So to review the SBRC offering
Dimensions Applications
23
And for maximizing the ROI of your direct
marketing dollars, SBRC ensures
Greater list productivity
Greater profits
More satisfied customers
24
SBRC Principals

• SBRC is a Collaboration Among
• Paul Rappoport, an economist who was used to
  evaluating macro SMB data and general
  information on spending, and using sophisticated
  techniques for modeling demand. Macro economic
  data provides the breadth and comprehensiveness
  necessary to understand expenditures by either
  the market as a whole or across a variety of
  market segments.
• Ted Reed, a survey researcher, has conducted
  hundreds of marketing research project for
  companies interested in selling their products
  and services in the B2B market. Individual
  studies focus on the market for particular
  products and services, often in a tightly defined
  market segment. Surveys provide the detailed
  information on expenditures necessary for
  segmenting the market and understanding market
  trends.
• Art Menko, as president of BPI has provided
  consulting and database services over the past
  25 years in market planning, regulatory,
  benchmarking and performance metrics areas for
  the communications industry. BPI manages the
  Telcodata and CALMS group of subscription
  reports and custom databases and provides SBRC
  with its sophisticated database management
  resources.
• SBRC provides the specificity possible from
  surveys and the overall market information
  possible from macro economic statistics in a
  comprehensive database.

25
For More Information Contact

• Small Business Research Center, LLC
• 2 Penn Center, Suite 711
• 1500 John F. Kennedy Boulevard
• Philadelphia, PA 19102

• Joe Plotnick
• jplotnick_at_sbrcinfo.com
• 215-564-2836 x25
• Nick Mancini
• nmancini_at_sbrcinfo.com
• 215-564-2836 x24
• Art Menko
• amenko_at_sbrc.com
• 215-564-2836 x23
• Paul Rappoport
• prappoport_at_sbrcinfo.com
• 215-564-2836 x22
• Ted Reed
• treed_at_sbrcinfo.com
• 215-564-2836 x121