Three Ways to Ensure That You’re Looking at the Right Contact

In business-to-business marketing your models can be misleading because one large company can have many contacts interacting with you in different ways. If you run your model at the contact level you might overstate or understate the value of any one contact and miss the overall value of the company or mail the wrong people.

A consumer household typically has one contact that buys the product, pays for the product, and receives the shipment of the product. If you run your recency, frequency, and monetary (RFM) model on that household you will not go wrong by mailing to the ship-to address rather than the sold-to address.

A business customer, however, can have different people interacting with you in each part of stage of the purchase, payment, and receiving process. You can understate the value of the customer if you run your RFM on the contact level and pull in the ship-to instead of the sold-to records. Similarly, you will waste a lot of catalogs if you mail to the ship-to and not the sold-to record.

What can you do to look at the right contact? There are three steps you can take:

  1. Understand your customer management system. Catalog customer management systems designed for consumer or small-business marketing have only one set of contact information field for each account. They were developed on the assumption that the sold-to person is the ship-to person is the bill-to person. If your business has grown to include larger companies you can usually modify user-definable fields in the customer record of these systems to serve as a meta-account number and contact number. You can link multiple contacts within an account in this way and have a numbering scheme that distinguishes the types of contacts within a business.
  2. Keep your system as it is and link the contacts in the merge/purge process. Overlaying your customer file with business hierarchy information will let you link different addresses belonging to the same institution. Databases with information such as Dun & Bradstreet’s DUNS numbers and the Quality Education Data (QED), MCH, and MDR numbering systems for educational and religious institutions can give you the means to combine sold-to, ship-to, and bill-to records into a complete picture of the institutions. You can then run your model at the institutional level to get a correct value for each account. Transaction and shipping dates tied to each contact can help you select which one to mail by picking the earliest record.
  3. Capture the information correctly to begin with. A customer management system that has a flexible record structure to assign an account number and support multiple contacts will give your staff the means to flag the sold-to, ship-to, and bill-to records as the information is keyed in. You can direct your modeling to use the right type of contact so that you can assign a full and accurate value to each customer. The sold-to records can be sent through merge/purge. Your mailings will then have a higher likelihood of reaching the decision maker and resulting in sales.

Bill Singleton, president of Algonquin, IL-based consultancy Singleton Marketing.

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