Multichannel Prospecting for B-to-B

For a large business-to-business cataloger — say $500 million in sales — a field sales visit costs about five times more than a telemarketing call and 100 times more than a direct mail piece.

That means if every field sales rep visit costs New England Business Service (NEBS) about $100, says Bob Saarimaki, group director for marketing services for the Groton, MA-based business forms mailer, each outbound telemarketing call would cost $20. And every direct mail effort, he says, would cost NEBS about $1.

“Direct marketing is the single best way to get people on a cost basis,” says Paulette Schlotman, senior vice president of White Plains, NY-based list firm MeritDirect. But while catalogs, e-mail, and telemarketing are cheaper ways of gaining sales, they’re not always as effective as sales reps. Salespeople can build relationships with prospects and customers who wouldn’t respond to less-personal communications. For b-to-b marketers such as NEBS, then, the challenge is determining when the expense of sales calls is warranted.

For most marketers, the potential value of a customer determines how they’ll be contacted. “The companies spending the greatest amount of money represent the greatest opportunity,” says Stevan Roberts, president/CEO of Pearl River, NY-based list firm Edith Roman Associates. But size shouldn’t be the only determining factor. Says Roberts, “You don’t want to have your field salespeople tied up making calls to companies that may or may not pan out.”

Model prospects

To assess which prospects should receive a catalog rather than a visit from a sales rep, many mailers model prospect names against their best customers. NEBS, for instance, maintains an inhouse prospecting database using information from Dun & Bradstreet, InfoUSA, and other compilers. NEBS puts the prospects through a predictive model, which “tells us these X amount of names fit our profile and who is most likely to buy checks from us,” Saarimaki says. The company also puts prospects through another database, which predicts lifetime value based on variables such as the sales and rate of growth.

The values assigned to the prospects by the models determine how NEBS will contact each name. Say NEBS wants to promote its checks catalog to 100,000 prospects. Those deemed “A” prospects will first receive a 16- or 32- page prospecting catalog. After five to eight weeks, a telemarketing rep will call them. Assuming the prospect has expressed some interest, a field sales rep will then visit the prospect. On the other hand, a “B” prospect — one with a lower projected lifetime value, for instance — will first receive a postcard driving him to the NEBS Website.

If you don’t have a proprietary database — and most catalogers smaller than the $547.9 million NEBS fall into this group — a b-to-b cooperative database can help you create models so that you can determine which prospects look most like various segments of your house file. Databases such as MeritBase from White Plains, NY-based MeritDirect, Datawarehouse from Greenwich, CT-based Direct Media, and the Abacus B2B Alliance examine data elements such as standard industrial classification (SIC), titles, or company size. More important, Schlotman says, they can indicate whether prospects have purchased from catalogs and, if so, how recently.

Compiled data from outside list owners can also provide you with basic information about prospect companies, Roberts says. Overlaying an InfoUSA or Dun & Bradstreet file on your prospecting list, for example, will give you data about company size — and as Roberts says, “The size of the opportunity is directly tied to the size of the company.”

Interline Brands, whose targets include maintenance workers at apartment buildings, segments its house file by spending thresholds, or what the multititle mailer calls “average spend.”

“Apartment buildings are very easily measured,” says Pam Maxwell, vice president of marketing for the Jacksonville, FL-based cataloger of maintenance, repair, and operations (MRO) supplies. “The more units in the building, the more money that is typically spent.” To determine the average spend of prospects, Interline gathers information from industry associations and property management companies, among other sources.

Interline includes Wilmar, which has a field sales force, and Maintenance USA, which markets through catalogs and telesales. Interline sends prospects with a lower average spend a 24- to 36-page Maintenance USA catalog, rather than its 1,000-page Wilmar master catalog. Once a buyer’s spending reaches a certain threshold, Interline sends a sales rep to work with the company.

Not that sales reps can or should completely replace catalog mailings. Sending both catalogs and salespeople can gain a company “mind share,” Roberts says: “Sometimes you’ve got to try that much harder to break through.”

John Borta, vice president of marketing operations for Chicago-based Newark InOne, agrees. The electronic components marketer uses both a catalog and field sales reps to reach larger prospects. “A field sales rep might host an on-site visit to a large facility to hand out catalogs, collect new contact names, and create awareness among a broader base of contacts,” Borta says.

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