B-to-B Insights: Unorthodox But Effective

Sometimes an odd suggestion can really turn a company around. Here are three nontraditional recommendations that have significantly improved sales for B-to-B direct marketers:

1. Act like it's a B-to-C company. Successful salespeople know that treating customers like friends is a key to developing accounts. You may laugh when your paper salesman acts like you're his best buddy, but the reason he does is because it works. Help your customers feel better about themselves, and they'll feel better about you.

B-to-B catalogers don't seem to get this. They treat their customers as if they're businesses. You can't take your zero to 12-month buyer file out to lunch, but you can treat the names on it like they're people. Here are a few ways how:

• Gifts: Offering a premium that your customers can use is a great way to make them feel smart. Whether you're offering a tote bag or car trunk caddy, everybody loves a free gift.
• Discounts: Most B-to-B companies offer discounts based on volume. I'm surprised how few of these same companies remind their customers about the deals they're getting. The attitude is that you've already told customers about their discounts, why tell them again? Instead you should be reminding your customers every chance you get.
• Consult, don't just sell: Even if you like gelatin, you definitely don't want to be around when it's being made. Factories that produce gelatin are very hard to keep clean, especially their conveyer belts. A direct marketer of industrial cleaning equipment was brought into a gelatin plant to sell cleaning equipment for the conveyor belt problem. It turned out that the retailer's solution for the problem didn't include the equipment it sold. However, it solved the factory's gelatin problem and got more business from the company anyway. The B-to-B company acted as consultants rather than just salesmen and ended up with a more loyal customer in the process.

2. Improve your site penetration. Site penetration refers to the number of catalogs that you mail into a single location of a company. Improve your site penetration and you'll improve sales.
 Here's why: Your company is already in this customer's business operations system. If your client has a vetting process that includes multiple bids, you've already cleared that hurdle. Second, if the company is buying from you, it means that you're already set up within its purchasing/accounting system. You're now a hassle-free vendor to work with for other buyers within that company.

To improve your mailings for site penetration, there are a few steps to follow. First, ask your current customers if anyone else in their department or company needs a catalog. The benefits of this approach are that these names are free and you own them, enabling you to remail them without any rental fees. Another good way to find qualified names is through database co-ops that specialize in B-to-B. The benefit of this approach is that you'll find customers with known purchasing behavior for your type of products. Either way works; use both for maximum impact.

One point to remember: Be careful not to mail too many catalogs into one company at a single time. Any good list processor can give you a site penetration report for your merge/purge. As a rule of thumb, keep your mailing to three catalogs or fewer per site for your prospect lists. Save the leftover names. You can mail them as a separate flight a couple weeks later or use them for your next mailing.

3. Figure out what's in your database ... and how to get it out. Many direct marketing companies have little to no clue what information is housed in their databases. Even once they learn what data is there, they often can't get it out, meaning that they can't run reports for actionable intelligence.

You probably have a treasure trove of customer information at your disposal — e.g., lifetime value, order velocity, likelihood of second order, etc. However, you first have to figure out what's in your file. Here's a list of questions to get you started:

• How far back does your data go?
• What fields are found in all of the tables of your database?
• Do you have a list of database field definitions?
• Do you have a list of past and present SKUs with product category and product name identified?

Once this information is in hand, you can then determine what additional calculated information you need. For example, many direct marketers are frustrated that they can't get a lifetime value calculation for their customers. However, if you have all orders for all customers going back 10 years or so, you can create some fairly detailed lifetime value profiles for the various segments of your customer file.

You may need to export the data and run the calculations offline in a database program such as Microsoft Access, but the process is fairly simple. If you don't have someone on staff to run the calculations, freelance the work to a consultant or hire a recent college graduate with a degree in statistics.

When you're planning this type of business intelligence project, determine your objectives in terms of need-to-know and nice-to-know data. Need-to-know information will provide you actionable intelligence. For example, lifetime value by customer segment, defined by both RFM and NAICS/SIC codes, is a need-to-know piece of data. Once you have lifetime value reports, you can then determine your most productive prospect lists.

Nice-to-know information tends to be descriptive rather than predictive. If you can't determine a specific potential action that you'll take based on that knowledge, give that request a lower priority in your project. Note that I'm not saying don't follow up on nice-to-know information; you just have to prioritize.

George Hague is the principal of HAGUEdirect, a direct marketing agency. George can be reached at georgeh@haguedirect.com.