List Ideas of Merit: Big Opportunities with “Small Markets”

D&B, InfoUSA, and NBD (Experian) – the Big Three providers of compiled files– offer significant reach into the commercial business world. They all provide extensive coverage and selections to help business-to-business marketers target and reach U.S. businesses. But what about the more specialized markets – schools and colleges, hospitals, churches, and municipal and federal governments?

The b-to-i (business-to-institution) and b-to-g (business-to-government) markets consistently show steady growth in expenditures that outpaces inflation, a strong propensity to reorder in significant volume, and a stability greater than commercial businesses. While the major compilers can certainly help you hit these markets with a broad coverage approach, specialized compilers may be able to mine hidden gold.

Specialty compilers in these markets include Onvia (local, state, and federal governments), Amtower & Co. (federal government), MCH (municipal governments, schools, hospitals, and religious organizations), MKTG Services (schools and colleges), Market Data Retrieval (MDR, a division of Dun & Bradstreet; schools and colleges), and SK&A Information Services (hospitals).

On a market-by-market basis, discretionary federal spending grew 12.5% for the fiscal year ended Sept. 30. According to Mark Amtower, president of Amtower & Co., government small-purchase credit-card spending (expenditures of less than $2,500, which do not require a contract) was $17.2 billion last year and may reach $18 billion this year. This is a lucrative market for marketers but a transitory one – Amtower reports a 15% annual migration rate at the federal level. Unfortunately, the most readily available compilation sources (government directories) also tend to contain the oldest data. Amtower uses considerably fresher data sources to keep up with this fast-moving market. Additionally, very tight deliverability requirements (building codes, mail stops) at federal facilities require careful construction of addresses in order to get past the mailroom; Amtower’s lists conform to the deliverability standards.

Like Amtower & Co., Onvia’s business is in connecting suppliers with government buyers. Onvia recently placed its state, local, and federal government lists on the market through MeritDirect. The company, which has a proprietary compilation methodology, is unique in that it is the only comprehensive state and local government list source that targets by fiscal year on the state and local level.

John Hood, president of MCH, reports that healthcare expenditure in the 1950s was 5% of gross domestic product (GDP), or $500 billion a year. Today it is 15% of GDP, or $1.5 trillion. According to Susan McNamara, vice president at SK&A, the explosive growth of nursing homes and assisted-living facilities has increased the field of targets for front- and back-office products and services beyond hospitals and doctors’ offices.

Though most compiled medical files do not list the business office manager by name, McNamara suggests that this individual is a critical gatekeeper, purchase influencer, and buyer. The consolidation of medical group practices has resulted in larger practices with multiple offices, similar to a corporate headquarters with satellite offices. SK&A’s Linkage Data ties together group practices with multiple offices and can target key decision-makers for the entire practice. This linkage is a powerful tool for recognizing the true purchasing potential of a practice and targeting it appropriately.

School and college compilers CMG Direct (now part of MKTG Services) and MDR have been compiling lists for more than 20 years. They have become experts at accurately identifying contacts (teachers vs. administrators) by name and by function, meeting specialized deliverability requirements, and creating specialized targeting tools based on sources of funding and their ability to be spent on discretionary vs. federally mandated purchases.

Timing is critical in marketing to educational institutions and religious institutions. According to Mary English, director of strategic alliances at MCH, late September and early October are good times to mail; this is when many federal funds are released to schools. January to early May also remains a good time to mail to schools as they deplete current-year funds and plan for next year’s purchases. The end of July through the end of August is a good time to target individual teachers for smaller-ticket items that they can buy with classroom discretionary funds.

Religious organizations have been an increasingly productive market for many mailers. English says that January, after Christmas donations, and early spring, after the Easter holiday, are particularly good times to mail to most religious organizations.

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