Double the treasure

Consumer catalogers may think that expanding into business-to-business sales is akin to coming upon hidden treasure. After all, they already have the infrastructure in place, and they have creative, printing, mailing, and fulfillment strategies under their belts. What could be easier than applying their cataloging expertise to another market?

But consumer catalogers with the best intentions and experience may still hit a few roadblocks when expanding into b-to-b. While customer relationship management (CRM) has become a buzzword, if not a standard, on the consumer side, the emphasis on relationship building often gets lost when consumer catalogers begin marketing to businesses. This is ironic, considering that each b-to-b customer is generally worth significantly more money than a typical b-to-c customer — up to 100 times more, depending on the market. Since long-term commitment from this lucrative audience is particularly important, catalogers need to realize that they can afford to invest much more per customer on the b-to-b side.

But where should you put that investment? Since success in the b-to-b market depends on addressing the special needs of business customers, that’s what you should focus on. Below, some key strategies:

  1. Offer superior services.

    Service offerings are significantly more important to a b-to-b customer than to a b-to-c customer. The target business audience is likely someone in a purchasing department who needs quick, efficient service that will successfully deliver the products to the end user within his company. Indeed, since a b-to-b customer’s ability to make wise and efficient purchases is evaluated as part of his job performance, he has more at stake with each purchase than does a consumer. A consumer, by contrast, tends to place a higher premium on value, even at the expense of service.

    So in addition to offering standard b-to-b catalog practices, such as incorporating a purchase order payment method into the payment system or software, consider the following:

    • Providing a dedicated 800-number. You should offer separate lines for b-to-b and b-to-c customers. The business customer is far less likely to be patient if calls are queued up — after all, he’s most likely placing a high-volume order. What’s more, when he does reach a representative, he expects the rep to have a sophisticated knowledge of your products and to provide a high level of service. Often a consumer cataloger entering the b-to-b market will simply use the same call center services and infrastructure without calculating the value of expanding its services. For instance, if on the consumer side a company loses eight calls to abandonment by putting consumers on hold, the cost is relatively minor. But on the b-to-b side, just one of these customers could have been worth $500,000, depending on the market. With a dedicated line you can ensure that the b-to-b phones are staffed to avoid queues (typically with a higher ratio of reps to customers than in your consumer division), and that the representatives handling business calls are highly trained. Be sure that the callers are greeted properly as business customers; you can add credibility simply by adding the phrase “business division” after your company name when your reps answer the phone.

    • Assigning customer service representatives to key clients. You may even want to go as far as assigning a specific representative to each business customer, or at least to each key client, so that he knows the needs and history of the company in detail. This makes the customer feel valued and establishes a personal connection that fosters loyalty.

    • Offering free product trials. If you deal in relatively inexpensive items, let established customers try a product for free. Or if a customer hesitates about ordering a large quantity of a particular item because he is unsure of the product, offer to send him a sample. For example, if you sell business gifts and a customer is considering ordering clocks as gifts for his employees, you can send a sample clock. This type of extra service and convenience gives you a leg up on the competition.

    • Providing one-on-one consulting. Even if you can’t offer a dedicated representative for each business client, you can offer phone consultations based on specialties or disciplines. For example, train one representative in each of the key industries that use your products. Then when a customer in that industry needs extra attention or has a concern, a specialized rep can share his knowledge of how similar customers have dealt with the same situation. Another approach is to offer one-on-one scheduled consultations at your store location (if you have retail outlets) or at the customer’s location (if economically justified). These reps-cum-consultants can inspire customer confidence in your product, sending the message that you know your business — and the customer’s.

  2. Use supplemental sales tactics.

    The high value of sales generated by your business segment allows you to be far more aggressive in your sales approach — and to allocate a higher percentage of your budget to sales efforts. Consider outbound follow-up service calls, after an order is shipped to ensure that the products arrived on time and intact. You could also have phone reps follow up with customers who have requested catalogs to see if they have any questions and to remind the customers of upcoming sales or special offers that might expire. To provide continuity, make sure that the same representative handles all the calls to a specific company. Not only do these calls enhance the service and help develop a personal relationship, but often they will result in add-on sales.

  3. Expand your catalog’s shelf life.

    It would be impossible to perfectly target a catalog to the purchase cycle of each company — though you should be using your customer data to get as close as possible. So you want customers to view your catalogs as valuable reference tools that are likely to be saved. This means you should not place too great a focus on specific holidays, be too specific with dates that may quickly become outdated, or include offers/sales with a short-term expiration date. Instead, label catalogs more broadly, using “Spring/Summer 2001” rather than “April 2001.”

    Including such information as planning calendars, creative ideas tied to your product usage, and product rating sections in your catalog also helps increase shelf life. For example, if you are marketing cell phones to sales managers, you could offer cost-savings tips for arming the sales force with cell phones.

  4. Offer a separate b-to-b Website.

    It’s not enough to simply have a general Website for both consumer and business customers. B-to-b customers simply won’t tolerate plowing through consumer offerings in search of the b-to-b product line. Instead, establish credibility with your business audience by offering a microsite — a subsite within your company’s general Website — that is dedicated to the needs and interests of the b-to-b audience. Buyers can access the microsite either directly or via the main site, and it should offer the most efficient online ordering methods available. The site should also include special service features such as live chats, ordering histories, and prompt response to customer inquiries.

  5. Give your best customers preferential treatment.

    Surely you know the “10% rule”: 10% of your customers represent 90% of your profit. Considering this, you may want to implement a “top tier” customer program. After segmenting your customers by value, offer the top customers extra services and discounts that you can’t afford to offer to all of your customers. You will thereby secure the loyalty of these best customers, not only by meeting their needs for these extra services and benefits but also by fostering a sense of exclusivity.

  6. Cultivate a company history.

    Regardless of who within a client company is doing the ordering, you want to be perceived as the vendor of record for that company. And since turnover is a big issue in many companies, you should create a relationship or history not only with a specific purchasing agent but also with the company in general.

    One way is to provide customers with their company purchase histories both online and offline. For example, offline you can fax purchase histories upon request or, better yet, include a summary directly on a wrapper of a catalog:

    Client company: XYZ Corp.
    Date of first purchase: October 1993
    Date of last purchase: January 2001
    Discount: 20%
    Categories purchased: Software, office supplies,
    office furniture
    Other: Member of XYZ Gold Program
  7. Establish your brand.

    Branding may be even more important when targeting businesses than when marketing to consumers. The purchase agent typically fears buying from untried and unknown companies — after all, if he ends up with shoddy service or merchandise, it could hurt his performance review. So if he can trust in the quality of your company and your brands, his job is a lot easier.

    If you don’t have an established brand such as Lands’ End, you must dedicate time and resources to establish a sub-branding for the business audience. And even with a strong consumer brand, you still must differentiate the b-to-b brand, particularly if the consumer brand is not appropriate (for instance, it’s too whimsical) for your business audience. Doing so signals that you understand how the needs of businesses differ from those of consumers and that you are dedicated to meeting those b-to-b needs.

    In terms of your product line, if you represent name brands in addition to proprietary product, consider really playing up the name brands — especially in the early years of breaking into the b-to-b market. By establishing an overall impression of quality, your proprietary brands will ultimately sell better, because the customer will be familiar with your company name and more confident making any type of purchase.

    Also, don’t stint on the quality of your catalog’s paper and photography — you have to invest to establish credibility with consumers. And again, because the average b-to-b customer is worth more than the average b-to-c customer, you can typically afford to spend dramatically more on catalog creative in the b-to-b market.

  8. Promote your brand in every venue.

    Don’t stop with a catalog. Use postcards and outbound e-mail to announce short-term sales, deliver targeted promotions, and remind customers of a new merchandise line. Always include a phone number and the Website address through which customers can order additional catalogs.

    We’ve mentioned this several times already, but it bears repeating: A single b-to-b customer can be worth thousands of dollars — and thousands of dollars more than a consumer customer. Consequently, you should spend more on testing, data collection, data cleaning, and 100% guaranteed mail drops (which ensure that every name on a list is mailed) than you would for a consumer audience.

    Since b-to-b clients are high-value, potentially long-term customers, don’t market to them in a short-term promotional manner. Use your consumer catalog knowledge to close the relationship gap with b-to-b customers, and you too can double your treasure.

Deirdre Girard is a principal/cofounder of PreVision Marketing, a Lincoln, MA-based provider of CRM marketing, Internet, and technology services.

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