Title: DM DAY 2001 Fundamentals of Direct Marketing to Business or B2B
1DM DAY 2001Fundamentals of Direct Marketing to
Business or B2B
- John M. Coe
- President
- Database Marketing Associates
- Scottsdale, AZ
- 480-778-9900
2My Objectives Today
- Present the fundamentals B2B direct and
database marketing we are going well beyond
just the fundamentals. - Provide you with insights into the major change
that is occurring today in B2B as we are in the
mist of a true revolution in how B2B companies
are using direct marketing. -
3Agenda Approach
- Trends in B2B
- Segmentation the head of it all
- Targeting the right people
- The four leverages to success
- Offer strategies
- Creative
- Integration with sales distributors
- Testing and measurement
- Talk very fast hand outs will help
4Your Two Jobs Today
- Sell More
- Spend Less
- Both
5(No Transcript)
6B2B Trends
- Since the late 1940s until the early 1990s the
go to market sales model has been the same. - Starting in the mid-1990s dramatic changes
started to occur and have given rise to new B2B
strategies. - There are several strong trends driving these
changes -- the most important of these are
71. Clutter Sensory Overload
- Communication clutter is increasing dramatically
and is getting worse - 1999 Intertec study revealed that
- A six fold increase during the last 20 years in
messages we see or hear in our daily lives has
jumped to 3,000/day. - Advertising Age reported last year that its now
5,000 /day.
8Message Clutter in the OfficeWSJ 189 per day
- 52 phone calls
- 36 emails
- 23 voice mails
- 18 postal mails
- 14 faxes
- 18 interoffice
- 13 post-it notes
- 8 pages
- 4 cell phone
- 3 express mails
9More Clutter2000 Pitney Bowes Study
- 204 messages/day for US office workers.
- UK is 191 -- up from 138 in 1999
- Germany is 178 -- up from 154 in 1999
- France is 165 -- up from 124 in 1999
10Result
- Increasing clutter and the sensory overload has
caused a breakdown of the awareness behavior
model. - Direct marketers desire a behavior.
- We need to break through the clutter and thats a
very hard job today!
112. The Slow Death of the Sales Call
- Cost
- average cost per call is 350-400
- several companies report 1,000
- yesterday visited a firm -- cost 2000
- Efficiency
- calls to close a complex sale is up from 5 in
1990 to 8 -- 10 today - calls per day have declined from 4 to 3
- Desirability
- Customers dont want to see salespeople
12Result
- The selling model is busted as costs are up and
efficiencies are down. - Business buyers and influencers dont want to see
sales people today. - A new method to cost-effectively contact
potential and current customers must be found.
133. More Complex Buying Process
- Number of people involved has increased
- Types of functions have expanded
- Multiple locations of people
- More complex competitive matrix
14It Gets Worse for Database Marketers
- Think back to last May
- What has changed on your card?
- Name
- Title and/or function
- Company name
- Address
- Phone number
- email address
15Some scary results
- In 1992 change rate was 62
- 31 changed companies
- 31 changed within the company
- Results to date in 2001 show a 72 change rate
a 10 increase.
16B2B Companies are now --
- Working to bring together their internal data on
customers, prospects and market segments. - Rethinking how they market and sell.
- go to market strategy
- Searching for outside assistance to help as few
internal experts exist.
17The New Sales Coverage Model
- The evolution is taking place today.
- Revolves around direct marketing being integrated
with sales. - Requires a database not a list.
- Called many things -- Relationship Marketing,
CRM, 1to1, etc.
18The Three Processes All B2B Marketers Must
Perform to Arrive at List Selection
- Profiling -- Where are you today?
- Targeting -- Where do you want to go?
- Segmentation Whos going to take you there?
19 ProfilingWhere are you now?
- Analysis of current customers and prospects
- looking for insights
- dependent on quantity of firms and quality of the
data - your decision on quantity - be careful
- use SIC/NAICS and company size to start
20PROFILING
- Customer profiling-internal comparative analysis
- Common tabs
- Value -- Profitability, Servicing
- Industry SIC now soon NAICS
- Size Number of employees vs.
- Geography SCF, area code, zip code
- Major purpose of customer profiling is to
establish best segments and then market to
mirror image suspects.
21 Next Step In Profiling
- Penetration analysis of market
- calculates the percentage penetration
-
- need to be careful on statistics--cell size
-
- provides a more objective view of opportunity to
sell new customers
22PENETRATION ANALYSIS MATRIX (an example)
23TARGETING WHERE SHOULD YOU GO?
- Four sources of the targets
- 1. Results of profiling
- . New/emerging market opportunities
- . New product/service introductions
- . Competitive opportunities
24TARGETING -- TIPS
- Recent inquiries/leads may provide a more
current reflection of market interest. - Be sure that data definition of the target
markets can be linked to outside data. - Not all targets are created equal an economic
valuation of the targets helps set marketing
priorities and resource allocation
25 SEGMENTATION WHOS GOING TO GET YOU THERE?
- Macro segmentation -- how your company or group
is organized to go to market - Micro segmentation -- clusters for direct
marketing campaigns - One-to-one segmentation -- field or telesales
targets (is also advanced database marketing on
the Internet)
26SEGMENTATION WHY DO IT?
- Leads to relevancy of communication and offer.
- Tighter targeting -- save money.
- Establishes the most important data elements for
the database. - Creates more customer focused communications vs.
product proud - Can be used to pre-qualify leads
27SEGMENTATION DANGERS
- Too many segments -- too many projects or too
little time - Wrong criteria chosen for segmentation
- Inability to obtain and/or update the data
28MICRO SEGMENTATION DEFINITION
- Micro segmentation is a process of grouping
together individuals and/or companies who share
common characteristics into clusters that are
relevant to your product/service, selling process
or company.
29 DEMOGRAPHIC SEGMENTATION
- Geographic
- SIC/NAICS
- Employee size or revenue
- Location type -- headquarters, plant
- Year founded
- Fiscal year
30RELATIONAL DEMOGRAPHIC SEGMENTATION
- Factual information/data that is linked to the
selling opportunity - E.G. Equipment in use
- Sales input can be helpful in identifying the key
relational data element(s) - Untapped opportunity for most
- Increase in relevancy
- Leads to stealth marketing
31SALES CYCLE SEGMENTAION
- Suspect
- Inquiry
- Qualified lead
- Proposal/quote
- First purchase
- Repeat purchaser
- Long term or high value customer
- Past customer
32COMPETITIVE SEGMENTATION
- Direct competition--usually the name of
competitor - Indirect or alternate solutionoffset solution as
competitive definition - Why change or status quo attitude
- Budget prioritization or restriction
33BEHAVIORAL SEGMENTATION
- General inquiries
- Response to specific offers
- Trade show or seminar attendance
- Multiple inquiries -- company or individual
- Purchase
- Calls to customer service
- Others
34CUSTOMER SEGMENTATION
- Product/service standard analysis of
transactions - Geographic clusters
- RFM (recency, frequency monetary)
- Influence of prior effort by sales people and/or
business partners
35Who to target?
- Outline the buying process for each major
segment. - Determine the individual, by job function, that
is involved at each stage of the buying process. - Attempt to then list the job titles for each
function and they then become your selects for
the list order.
36Types of B2B Lists
- Compiled
- Response
- Co-op
- Pooled leads
- Developed
- Customer
- SRDS
37Four campaign elements that leverage DM results
- List 50 -- 75
- Offer 20 -- 30
- Sequence Frequency 20 -- 30
- Creative media 10 -- 20
38How should we deploy the 4 contact media in a
sequence and frequency pattern?
- Email
- Snail mail
- Telephone
- Face-to-face
39Primary Contact Media
- Integration of the 4 targetable media.
- Media of contact Cost per contact
- email 0.05 -- 0.50
- snail mail 0.75 -- 1.50
- telephone 10 -- 25
- sales call 250
40What offers would advance the buying process?
- Suspect to inquiry
- Inquiry to prospect
- Prospect to qualified lead
- What is a qualified lead?
- Qualified lead to customer
41Offer Types
- Soft offers - inquiry generation
- Information of value offers - lead development
- Hard offers - closing or hand off to sales
- Multiple offers - self qualification
42Creative - how to have more fun!
- B2B can be more creative than consumer as pay-off
is much higher than consumer. - Why is business communication frequently so
bloody boring? - Business people are human too!
43The Creative Triangle
- The creative process is copy led
- Art or graphics follows the copy
- It is important but just does not start the
process - Production should be involved in the creative
process
44The Integration of Sales and Business Partners
- The new sales coverage model is an integrated
model. - Integration with sales involves
- lead hand-off and feedback
- data input on contacts
-
- Obtaining cooperation from business partners may
be the hardest job!
45A Word About Testing in B2B
- Almost never done! Why?
- What to test
- list
- offer
- sequence and frequency
- Testing methods
- A/B split test is most common
- Small sample then roll out
46How should we measure results?
- Response rate
- Cost per inquiry
- Cost per lead
- Cost per sale
- Value per lead - transition point
- Break even
- E/R
- ROI
- LTV
47Measurement Issues
- Whats the average length of the sales cycle?
- We want to measure too quickly
- If you dont measure youre not a direct
marketer! - Try to move from activity to result measures if
you want to prove that direct marketing works in
B2B
48To Sum Up
- B2B Direct Marketing Sales are forecast to be
792.8 billion in 2000 -- an increase of 10.6. - This is double the growth of all B2B sales --
penetration is being made! - Direct and database marketing is playing a much
more significant role in the overall marketing
and sales model.
49Thanks for Attending
- Questions -- call us at 480-778-9900
- White papers -- give me your card to be on our
list. - By By