B-to-B Cataloging: Boost Response With Nontraditional List Selects

In business-to-business (B-to-B), several key factors aside from traditional recency, frequency and monetary (RFM) values could play a significant role in the list selection process for both your prospect files and housefile. Taking the time to identify these factors can pay huge dividends in your response rates.

RFM should continue to play the paramount role in your list selections, but consider these additional house and prospecting list strategies that will help you in your marketing efforts.

Heed the X-factor

An X-factor is any variable that identifies a file segment not defined by RFM value criteria. X-factors don’t replace RFM; they supplement it.

Significant portions of many B-to-B catalogers’ housefiles actually are consumer. These catalogers commonly are referred to as hybrid mailers. If you’re a hybrid mailer, you first should consider selecting by customer type — business or consumer. If your database doesn’t have customer type as a selectable field, I highly recommend adding and clarifying this select.

The same RFM segments that are preselected by B-to-B vs. consumer customers respond quite differently from each other. Typically, the average order value for the B-to-B customer will be larger. This factor alone often allows for mailing deeper into the RFM selects for the B-to-B file.

Your B-to-B selects could provide an acceptable ROI into the fourth year of recency. But your consumer selects may be mailable for only half of that file depth.

Once you verify the mailable depth of your consumer file, cut back on mailing the consumer segments that aren’t delivering an acceptable ROI. Your lower mail quantity saves you money with minimal effect on your top line. You may, however, redirect your circulation from the weak performing consumer segments to a re-mail of your best performing B-to-B segments.

By Business Type

Regardless of whether you use traditional SIC/NAICS codes or have developed a unique system that further defines your customer base, selecting by business type can significantly improve results. If you sell medical supplies, for example, knowing whether a customer is buying for a hospital as opposed to a private doctor’s office could have significant impact on cover versioning and offers, which, in turn, could significantly improve response.

The companies that succeed with this type of preselection criteria tend to keep it simple, broadly defining categories and not getting too granular in their divisions.

When considering business type as a select on your housefile, however, keep in mind that these selects tend to work best for cover versioning and offers. They may not be predictive of response rates, though they can be predictive of average order values.

Other X-factors for your housefile could include product categories purchased and contacts’ job titles. Regardless of what X-factors you decide to use, here are some general principles to consider:

• Choose X-factors that are predictive of response.
• Select X-factors that are descriptive of your housefile to allow for effective cover versioning.
• Use your X-factors as an adjunct to RFM selections, not as a replacement for them. Keep it simple.

Prospecting

B-to-B catalog prospecting often requires a variety of strategies for list selection. Here are some nontraditional prospecting techniques you may not have tried recently but are worth revisiting:

• Co-op databases.
B-to-B co-ops don’t have the best reputation. But they’re now delivering some of the most consistent, solid response rates.

Response from B-to-B co-ops may not be giving the highest response rates — such as consumer catalogers can boast — but the response often offers significant roll-out potential of thosands of names. If you haven’t tried a B-to-B co-op lately, it’s time to reconsider.

If you feel that you’ll be bamboozled into giving up your unique housefile buyers, explain your concerns to your sales representative from the co-op. In the past few years, some of the B-to-B co-ops have made significant strides toward positively addressing the legitimate concerns of B-to-B list owners.

• Yellow Page listings.
Some mailers don’t realize that they rent names from the Yellow Pages. Sounds too simple, but it’s true. Rent by heading categories, which is the way you look up businesses in your local phone directory.

You can target by cities or regions and rent the businesses’ phone numbers for a coordinated outbound sales effort to coincide with catalog mailings. (When renting phone numbers, speak with your list broker to understand the parameters of their use.)

• SIC/NAICS codes.
Renting by SIC/NAICS codes is hardly new, but there’s a new twist to the process. You now can have your housefile analyzed for these business codes and receive information regarding the number of employees, estimated sales and other “firmographic” data for your housefile.

With this additional information, you now can rent prospective names that are more like your customer base. This is a significant improvement over simply mailing by SIC codes. A number of vendors, including Donnelley Marketing, offer services such as this.

• Vendor-supplied lists.
Your product vendors may be a rich source of free lists. Often prospective customers will contact manufacturers directly regarding their products. These manufacturers send product information to the prospects, but since they don’t sell directly to end users, the marketing communication stops. These names can yield potential customers, but they vary in quality.

• Create your own.
More catalogers are resorting to a labor-intensive, albeit effective, prospecting technique. They create their own prospect lists by searching the Internet for potential customers. If you sell specialty automotive parts supplies to muscle car shops, for example, you would search on keywords to locate individual muscle car shops throughout the county.

This technique only works for niche B-to-B marketers, since very specific types of businesses require their products. For many mailers, this technique should be a last resort. But for smaller catalogers on a budget, it can yield good results.

u Talk to your broker. Working with a list broker remains one of the best ways to find new prospective lists. An open discussion with the broker, combined with the willingness to test some of its ideas, will go a long way to opening up new possibilities for your business.

George Hague is senior marketing strategist at J. Schmid & Associates Inc., a full-service catalog marketing firm in Mission, Kan. Contact: (913) 236-8988 or georgeh@jschmid.com.