News
Data? B-to-B
Mailers Have It
---By Ruth P. Stevens and Bernice
Grossman
When it comes to database use, you might think
business-to-business marketers trail their consumer
counterparts. Well, think again.
The range of database applications in B-to-B is as
broad and creative as B-to-B marketing itself.
To find out more, we recently conducted a survey of
business marketers to see how they employ their
databases.
The No. 1 database marketing application reported by
our sample was prospecting, which we define as
pre-sale cultivation of potential customers and
inquirers. With long sales cycles and complex buying
processes, its fitting marketers would use their
databases to build pre-sales relationships.
Of course, consumer marketers don’t do prospecting
from their house files. In consumer, there’s little
sense in importing rental names when it’s much
easier to mail the name once and import the customer
response.
But the definition of prospecting in B-to-B is
somewhat different. Here it means nurturing an
inquirer until that account converts. This is a
process that can take time—and many touches. And
it’s really worth doing from a marketing database.
However, database marketing can be more challenging
in B-to-B:
• B-to-B files often are small, which can limit
opportunities to do split testing and data modeling.
• B-to-B data degrades more quickly than consumer,
causing greater uncertainly in analytical
operations.
• Business data is complex and harder to work with.
• B-to-B files frequently contain incomplete
records. For example, a billing address might be
shown as “See Judy in Accounting.” A modeling
challenge, to be sure.
KEY FINDINGS
• Where are databases managed? Only 6% of
respondents said they didn’t have a database. Of
those with a database, the vast majority (86%)
maintain it in house, and 14% outsource its
management. This was to be expected since business
marketers are intent on creating and nurturing a
sales pipeline.
Large companies (those with 1,000-9,999 employees)
were somewhat more likely (91%) to maintain their
databases in house. But the biggest firms (with
10,000 or more workers) reported the same level of
in-house management as the average. So we can’t say
for sure that a company’s size is a factor in the
matter of outsourcing a database.
• Legacy systems vs. modern databases. Of those that
manage databases in house, 41% use legacy systems
and 59% claim to have a flexible database designed
for querying and campaign selection.
Here size plays a part: Large companies as defined
above use legacy systems at a significantly higher
rate (57%) than average. On the other hand, just 25%
of the biggest organizations have legacy systems.
It appears, then, that smaller companies have newer
tools. Everyone needs robust systems for campaign
management and closed-loop results reporting. Large
firms are building such systems in house or seeking
outside solutions.
• Database use. Prospecting was the leading
application noted by business marketers, a finding
that no doubt surprises those on the consumer side
that rarely find it profitable to bring prospects
into their databases. This is because
prospect lists
typically are rented one time only, and are easy to
rent as needed for acquisition campaigns. In B-to-B
a prospect name takes much longer to convert to a
sale, and that customer’s value frequently is much
higher. Therefore, business marketers find it
effective to move prospects along the sales cycle
using database-driven communications.
It’s no surprise that nearly half (45%) of
respondents said they use their databases for
campaign response tracking and analysis. Most B-to-B
campaign responses come in without key codes, so
matching back data is an important activity here.
Some 61% of respondents said they use databases for
inquiry management, reflecting the criticality of
pipeline management in B-to-B.
We are concerned that only 31% of B-to-B marketers
seem to be focused on
data hygiene. The volatility
of business data and the potential for lost
conversions caused by missing or incorrect contact
information requires constant vigilance and
aggressive maintenance.
But we’re gratified that so many modeling and
analytical techniques are being used by B-to-B
marketers. At the same time, the rather low rate of
model use points up the difficulty of campaign
replication in most business marketing situations.
Since campaign conditions change so rapidly,
modeling is used less to predict campaign results
and more to understand the nature of a customer
file.
APPLICATIONS
Prospecting, profiling, querying and campaign
selection were reported across companies of all
sizes. Large organizations tend to place a higher
value on data hygiene and are more likely to do
segmentation.
While all industries named prospecting an important
area for database marketing, technology firms
reported an unusually strong interest. Manufacturers
placed the highest value on inquiry management;
perhaps the industry’s maturity means each lead
needs to be treated with special care.
---Source:
Reprinted from Direct Magazine Dec. 10, 2007 (www.directmag.com).
Ruth P. Stevens is the author of “The DMA Lead
Generation Handbook” and “Trade Show and Event
Marketing.” Bernice Grossman is president of DMRS
Group Inc.
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