B-to-B: On the Right Track
Ideas for capturing more response sources on B-to-B campaigns
June 2007 By Mary Ann Kleinfelter
|
The most basic form of response tracking requires direct marketers to determine which promotions generate the most sales, orders or inquiries for lead generation. Tracking activity to the promotion that generated it has always been a challenge, especially for B-to-B marketers. The number and complexity of those challenges keeps increasing, but the payback is becoming even more attractive as the latest postage increase makes B-to-B print materials more costly. Fortunately, there are many options B-to-B marketers can use to gain insight into how different promotions perform.
A Complex Process
Business buyers range from purchasing agents at extremely large technical companies who place orders every day on behalf of engineers and scientists, to moms who order stationery and forms for their small, home-based businesses. What’s more, we also employ an impressive array of channels to reach prospects and customers, including direct mail, catalogs, e-mail, the Web, in-person sales calls, stores and kiosks, trade shows, and advertisements in technical journals. With the extensive use of the Web and e-mail, response tracking has become even more difficult. If a customer visits your Web site, but orders from your catalog, to what medium should you credit the order?
Unlike consumer product purchases, business product purchases often are a group-buying decision, especially for high-priced or technical products. People from different departments and levels often need to approve of the buying decision, so the person placing an order may not be the same person you initally contacted. Some businesses may even reorder from internal inventory or a SKU number printed on a product in the warehouse. They may not have a catalog or e-mail in hand.
These are some of the complications of one-step sales. However, many business products require a two- or three-step sale. In a multi-step sale, a prospective buyer is obtained through lead generation; if he or she qualifies as a potential lead, then a promotion is sent out to the individual based on that classification. In this case, the B-to-B direct marketer needs to track the response of inquiries as well as orders, and the conversion of these inquiries (or leads) into buyers.
To make this situation even more interesting, turnover at U.S. companies has never been higher.
Simple Tracking Solutions
The most common and, perhaps, simplest method of tracking response is to use a special key code and ask buyers or inquirers for the code when they call. Often, an incentive is given to encourage the reporting of the code. Wily buyers and sales people soon learn that these special codes result in rewards, so order tracking can become skewed.
You also can give your products slightly different item numbers to track an order back to a specific promotion. For example, a widget may be item #ABC123 in a supplement catalog, but item #ABD133 in the master catalog.
A similar technique uses toll-free telephone numbers to track orders. In this scenario, you advertise one number in the catalog and a different number on the Web. While it’s still possible to see an item in a catalog, look it up on the Web site and then order using the telephone number on the Web site, toll-free numbers still have some value, as they point toward the promotion used for the order.
Recently, many B-to-B direct marketers have developed numerous, complicated e-commerce promotions, and it’s becoming even more difficult to distinguish which promotion is most effective. Al Contarino, president of Web consulting firm The Click Pro’s, explains that a common method for tracking e-response is to create a specific landing page for each promotion. “Make it available for a set period of time. Advertise this landing page in each promotion and correlate the resulting business from the specific landing page,” he advises.
Matchbacks and Allocations
One of the most popular and effective ways to track orders back to the promotions that generated them is the use of matchbacks. Matchbacks can be as simple as matching the buyers’ names back to the names of the people mailed. This process originally was developed to help direct marketers determine which lists performed best.
These simple matchbacks required only that a direct marketer supply the person doing the matchback with the names and transactions of those purchasing in a specific period of time, as well as the names and addresses mailed and the circulation plan. Even today, direct marketers who mail infrequently and in small quantities can use this simple matchback process.
Early matchbacks attempted to match the purchaser’s name with the occurrence of the name appearing most recently on a promotion. Today, that process has been broadened to include fractional allocation. So, if you’ve sent four promotions to an individual and you get an order for $400, you can tell the person doing the matchback how much of the $400 to allocate to each of the four promotions. You might choose to do this based on the percentage the channel plays in your company’s overall sales and order curve.
Look at your history and see how many sales each channel contributes to your overall revenue. You can use this percentage to weigh the importance of that channel when deciding how to credit an order. Also, you can look at how many orders and sales you typically get week by week following a promotion.
That weekly activity, usually in the shape of a bell curve, is your order curve for that promotion. Different promotions behave differently and create different order curves. For example, you may need up to six months to get the expected response to a printed mail piece, but you only may need a few weeks to get the expected response from an e-mail.
Laura Wojtalik, director of product management at Abacus, a cooperative database and data services provider that helps B-to-B direct marketers use matchbacks to assess multichannel performance, gives an example of how fractional allocation works, using a weighted, rules-based process to match each transaction to one or more open campaigns across channels:
“Suppose that company XYZ sent two catalogs to a customer, both with open order curves, and also sent an e-mail offering a discount on a certain product. Additionally, that e-mail was sent more recently and its order curve is still open,” Wojtalik explains. “If a customer clicks on the e-mail and purchases the specific product advertised, the e-mail may possibly receive 65 percent out of 100 percent [credit for] the order, with the most recent catalog receiving 30 percent and the older catalog receiving 5 percent. But if that same customer came in through branded search and purchased a product from the last catalog, the weights may be shifted around entirely,” she says.
Tracking Behavior
Sometimes B-to-B marketers choose not to focus on tracking how a promotion performs, but instead choose to focus on how customers who have been contacted through a special strategy behave. One of the most common tools to measure the incremental value of a promotion is to create a “hold out” group that doesn’t get the promotion and compare its purchasing behavior with that of a group that received the promotion.
Direct marketing consultant George Woodward describes how he used this method to obtain important information about his master catalog: “We were trying to get our hands around the effect of a big Buyer’s Guide to mid-level customers, knowing that the source code on the orders were not completely indicative of the source of the order and hence the success of that book,” he explains. “So, over a six-month period, we gave one group of customers six books, including a Buyer’s Guide, and another group six books, with the Buyer’s Guide being replaced by a much smaller book.
“As it turned out, giving these mid-level customers the much more expensive Buyer’s Guide was not giving us an increase in orders, tracked at the customer level, sufficient to justify the increase in marketing spending.” This same technique also can be applied to determine the value of different promotions or even the frequency of promotional contact.
In short, no matter what option you choose, there never has been a more compelling time to test these methods to more accurately track B-to-B response.
Mary Ann Kleinfelter is the director of marketing at L-com, a distributor of connectivity products based in North Andover, Mass. She can be reached by e-mail at mkleinfelter@L-com.com.
A Complex Process
Business buyers range from purchasing agents at extremely large technical companies who place orders every day on behalf of engineers and scientists, to moms who order stationery and forms for their small, home-based businesses. What’s more, we also employ an impressive array of channels to reach prospects and customers, including direct mail, catalogs, e-mail, the Web, in-person sales calls, stores and kiosks, trade shows, and advertisements in technical journals. With the extensive use of the Web and e-mail, response tracking has become even more difficult. If a customer visits your Web site, but orders from your catalog, to what medium should you credit the order?
Unlike consumer product purchases, business product purchases often are a group-buying decision, especially for high-priced or technical products. People from different departments and levels often need to approve of the buying decision, so the person placing an order may not be the same person you initally contacted. Some businesses may even reorder from internal inventory or a SKU number printed on a product in the warehouse. They may not have a catalog or e-mail in hand.
These are some of the complications of one-step sales. However, many business products require a two- or three-step sale. In a multi-step sale, a prospective buyer is obtained through lead generation; if he or she qualifies as a potential lead, then a promotion is sent out to the individual based on that classification. In this case, the B-to-B direct marketer needs to track the response of inquiries as well as orders, and the conversion of these inquiries (or leads) into buyers.
To make this situation even more interesting, turnover at U.S. companies has never been higher.
Simple Tracking Solutions
The most common and, perhaps, simplest method of tracking response is to use a special key code and ask buyers or inquirers for the code when they call. Often, an incentive is given to encourage the reporting of the code. Wily buyers and sales people soon learn that these special codes result in rewards, so order tracking can become skewed.
You also can give your products slightly different item numbers to track an order back to a specific promotion. For example, a widget may be item #ABC123 in a supplement catalog, but item #ABD133 in the master catalog.
A similar technique uses toll-free telephone numbers to track orders. In this scenario, you advertise one number in the catalog and a different number on the Web. While it’s still possible to see an item in a catalog, look it up on the Web site and then order using the telephone number on the Web site, toll-free numbers still have some value, as they point toward the promotion used for the order.
Recently, many B-to-B direct marketers have developed numerous, complicated e-commerce promotions, and it’s becoming even more difficult to distinguish which promotion is most effective. Al Contarino, president of Web consulting firm The Click Pro’s, explains that a common method for tracking e-response is to create a specific landing page for each promotion. “Make it available for a set period of time. Advertise this landing page in each promotion and correlate the resulting business from the specific landing page,” he advises.
Matchbacks and Allocations
One of the most popular and effective ways to track orders back to the promotions that generated them is the use of matchbacks. Matchbacks can be as simple as matching the buyers’ names back to the names of the people mailed. This process originally was developed to help direct marketers determine which lists performed best.
These simple matchbacks required only that a direct marketer supply the person doing the matchback with the names and transactions of those purchasing in a specific period of time, as well as the names and addresses mailed and the circulation plan. Even today, direct marketers who mail infrequently and in small quantities can use this simple matchback process.
Early matchbacks attempted to match the purchaser’s name with the occurrence of the name appearing most recently on a promotion. Today, that process has been broadened to include fractional allocation. So, if you’ve sent four promotions to an individual and you get an order for $400, you can tell the person doing the matchback how much of the $400 to allocate to each of the four promotions. You might choose to do this based on the percentage the channel plays in your company’s overall sales and order curve.
Look at your history and see how many sales each channel contributes to your overall revenue. You can use this percentage to weigh the importance of that channel when deciding how to credit an order. Also, you can look at how many orders and sales you typically get week by week following a promotion.
That weekly activity, usually in the shape of a bell curve, is your order curve for that promotion. Different promotions behave differently and create different order curves. For example, you may need up to six months to get the expected response to a printed mail piece, but you only may need a few weeks to get the expected response from an e-mail.
Laura Wojtalik, director of product management at Abacus, a cooperative database and data services provider that helps B-to-B direct marketers use matchbacks to assess multichannel performance, gives an example of how fractional allocation works, using a weighted, rules-based process to match each transaction to one or more open campaigns across channels:
“Suppose that company XYZ sent two catalogs to a customer, both with open order curves, and also sent an e-mail offering a discount on a certain product. Additionally, that e-mail was sent more recently and its order curve is still open,” Wojtalik explains. “If a customer clicks on the e-mail and purchases the specific product advertised, the e-mail may possibly receive 65 percent out of 100 percent [credit for] the order, with the most recent catalog receiving 30 percent and the older catalog receiving 5 percent. But if that same customer came in through branded search and purchased a product from the last catalog, the weights may be shifted around entirely,” she says.
Tracking Behavior
Sometimes B-to-B marketers choose not to focus on tracking how a promotion performs, but instead choose to focus on how customers who have been contacted through a special strategy behave. One of the most common tools to measure the incremental value of a promotion is to create a “hold out” group that doesn’t get the promotion and compare its purchasing behavior with that of a group that received the promotion.
Direct marketing consultant George Woodward describes how he used this method to obtain important information about his master catalog: “We were trying to get our hands around the effect of a big Buyer’s Guide to mid-level customers, knowing that the source code on the orders were not completely indicative of the source of the order and hence the success of that book,” he explains. “So, over a six-month period, we gave one group of customers six books, including a Buyer’s Guide, and another group six books, with the Buyer’s Guide being replaced by a much smaller book.
“As it turned out, giving these mid-level customers the much more expensive Buyer’s Guide was not giving us an increase in orders, tracked at the customer level, sufficient to justify the increase in marketing spending.” This same technique also can be applied to determine the value of different promotions or even the frequency of promotional contact.
In short, no matter what option you choose, there never has been a more compelling time to test these methods to more accurately track B-to-B response.
Mary Ann Kleinfelter is the director of marketing at L-com, a distributor of connectivity products based in North Andover, Mass. She can be reached by e-mail at mkleinfelter@L-com.com.
Companies Mentioned:
 |
|
|
|
Social Media ROI
Email Marketing that Works (2nd Edition)