Straight Talk: B-to-B: Mailing Smarter
A recent study by PointClear, a business process outsourcing agency based in Norcross, Ga., revealed that despite growth in the e-mail and Internet marketing industries during the last few years, B-to-B marketers are remaining true to direct mail; the majority of respondents continue to use the medium, and more than half reported they would increase that use in the coming year. However, from dealing with smaller prospect universes to overcoming an aversion to lists, B-to-B mailers have faced a number of direct mail challenges, says Dan McDade, CEO and president of PointClear.
McDade and I recently spoke about some of these challenges and the importance of testing more, branding less, analyzing better and mailing smarter.
TG: What role do you see direct mail playing in the technology and B-to-B space in the coming year?
DM: Our clients sent out less direct mail last year and the reasons included comments such as, "We've sent out tons of envelope and postcard mailers and have not gotten the results necessary to justify the expense." An adjustment at the end of the first quarter last year resulted in many marketing budgets [being] cut for the balance of 2004 based on early indications of a weak recovery.
Now most companies appear to be loosening the pocket book. And a trend that I see is smarter use of direct mail. You'll see [B-to-B] companies using direct mail less for brand and image build and more for increment marketinghow to get the prospect to take one more step, such as visiting a Web site splash page, attending a webinar or requesting a white paper. You will also see more format testing; the more sophisticated marketers are learning how to woo prospects by avoiding feature-oriented language, such as "look at us, we're great."
TG: How can B-to-B marketers better deal with their smaller prospect universes?
DM: In order to make sure that the results they get back are statistically significant or at least directional, [B-to-B] mailers often can't test too many variables. In B-to-B, frequently a statistically significant sample is the whole universe. So, sometimes you have to split that universe into tests that will give you a directional result, even though it's not a statistically significant one. Where I see folks missing the boat is by not pretesting the message ... it's relatively inexpensive to send out a mailing or even some faxes to get feedback from your prospect base. It's a step that seems complicated, but it is a lot less expensive than rolling out a direct mail campaign and finding that you missed the target and that your messaging wasn't quite right. There is always an opportunity to test; you can do an HTML e-mail ... or even text e-mail if you are trying to test the concept of a message or an offer. You will be able to tell within the first couple days of a program whether the message is resonating. ... Just make sure that in advance of sending something out you have done some testing to see if the message seems to resonate with your target.
TG: Where do you see opportunities for improvement for B-to-B mailers?
DM: For some reason, B-to-B mailers do not place much importance on lists. I've seen people spend $50 on a dimensional mail piece and then not want to spend $1 per name for a good list. There's a hierarchy of lists: targeted compilation, tightly controlled circulation, paid circulation, financially-oriented (firmographics) compilation ... and the one rule is that there is no such thing as a good list. Multiple list acquisition and manipulation is critical. Sophisticated marketers are doing multivariable regression analysis and other forms of analysis to score files, but larger universes are required to make this both economical and feasible. Relatively simple "birds of a feather" analyses ("I know what my buyers look like, how many other companies look just like my model customers?") are inexpensive and can be very powerful. However, many marketers have no idea how to do it. The old rule in B-to-C was that lists were 60 percent of the value of a campaign, with the offer being 20 percent and creative 20 percent. I don't think that is too far off when it comes to B-to-B. One B-to-B advantage is that it costs significantly less to build a prospect database as compared to B-to-C, and I definitely recommend building a database as a first step for all B-to-B marketers.
TG: What advice do you have for the coming year?
DM: Build a very tightly defined prospect universe from multiple list sources and track everything you do against it; make sure your offer is benefit-oriented and understood by your target market; and use a mix of media (including varied mail formats) to cost-effectively deliver multiple, clear impressions to your best targets.