Eye on B-to-B: Lack of Co-operation

While consumer catalogers have long accepted cooperative databases, many of their business-to-business brethren have stayed on the sidelines. Some are skeptical about the effectiveness of the co-ops as a source of highly targeted prospects, while others fear that by joining, their competitors could gain insight into their operations, or even steal away customers.

“It does seem that b-to-b trails the consumer side. B-to-b is just catching up,” notes Bob Savile, director of direct marketing at Hello Direct, a San Jose, CA-based cataloger of telephony products. “We’re just putting a toe into the water.” Earlier this year, Hello Direct joined MeritBase, a b-to-b co-op from Stamford, CT, list firm MeritDirect.

It’s a small world after all

One possible reason for the lag: the narrow target audience of most business marketers. A consumer women’s apparel cataloger, for instance, can cast a wide net looking for women predisposed to buy clothing through the mail. But a marketer of oscillators has a much narrower universe in which to prospect.

“In a database of 300 companies,” says Jack Schmid, president of Shawnee Mission, KS-based catalog consultancy J. Schmid & Associates, “you may have only 12 companies that are relevant for you.”

Then, too, if you are in a particularly specialized market and have only one or two major competitors, would you even want to share your names with them? And would they want to share their names with you?

Another challenge peculiar to b-to-b mailers and co-ops is the swiftness with which people change jobs and titles. Or as Hello Direct’s Savile says, “Keeping a file accurate would be the biggest challenge. People change companies, titles, and addresses like they change their socks.”

When individuals move, the U.S. Postal Service will forward their mail through its National Change of Address (NCOA) program (so long as the individuals fill out a change-of-address form, of course). The NCOA file enables service bureaus to keep lists relatively updated. For businesses, the USPS does offer the Delivery Sequence File (DSF), which can indicate if an address belongs to a business that has moved or gone bankrupt.

But in the business world, “there’s no coordinated process to keep track of address changes for people who go from one company to another,” says Michael Grant, president of Michael I. Grant & Associates, a marketing and database consultancy based in Scarsdale, NY. For instance, if a key purchaser of office supplies leaves IBM Corp., there’s only a slim chance the mailroom will forward the catalogs to the correct person in a building that could house 3,000 employees.

Nonetheless, the co-ops maintain that the problem of keeping up with business buyers is a manageable one. “We can verify some of the addresses,” says Brian Rainey, president of the Broomfield, CO-based co-op provider Abacus Alliance. Since multiple clients send Abacus the same names at the same addresses, “we can see what type of things they are buying and how active they are.”

Also, the co-op members “have a pretty good handle on company names and addresses, since the information is coming from people who made the actual transaction,” Rainey says.

Along the same lines, Ralph Drybrough, president/CEO of MeritDirect, says that hotline names — those of the most recent buyers — can give mailers ample clues on outdated contacts. “Selecting hotlines ensures a high degree of deliverability.”

Distinguishing the players

Multisourced databases can raise mailers’ confidence levels in the accuracy of the house names and rented names. Or as Bernice Grossman, president of b-to-b consultancy DMRS Group, says, “If you find my name in five different places, the likelihood is I’m not dead.” For some business catalogers — particularly those that target a fairly broad market, such as office supplies marketers and signage suppliers — the benefit of gaining access to accurate names of proven catalog buyers can outweigh a co-op’s drawbacks.

When reviewing co-op databases, business mailers have three major companies to consider: Abacus (a division of DoubleClick), MeritDirect, and Acxiom Corp./Direct Media. Unlike MeritDirect and Acxiom, Abacus terms itself a “transactional database.” In addition to supplying members with names and “firmographic” data (such as business size and number of employees), Abacus provides such information as the specific date that the buyer made a catalog purchase.

But such information is implicit in the nontransactional databases, argues David Henze, business development consultant for Conway, AR-based Acxiom. Catalog buyer files make up most of the 1,300 lists in the Acxiom database, he says, so if a record doesn’t contain the exact date of the transaction, it will indicate in which quarter the transaction occurred.

And, in fact, some b-to-b catalogers balk at offering up specific buyer behavior information to a co-op. “We are reluctant to release transactional data to third-party sources like that,” says Carl Sieg, a circulation and marketing analyst for Madison, WI-based Conney Safety Products, a member of MeritBase.

Participation in Abacus works on a quid pro quo basis: The number of names that a member can mail to depends on the number of names it has offered up into the database. Participants in the MeritBase and Acxiom databases can rent as many names as they like, but they have to pay for them.

Likewise, participants in MeritBase and Acxiom receive rental income on the names used by other members. “They have the algorithms written so that they can fractionalize credit for whoever owns the names,” Sieg says. Mailers divide up rental income so each gets proportionate credit for contributing duplicated names. For example, if three catalog companies own a name, they’ll each get 33% credit for the listing.

Cleaning Up Your List

Maintaining the names of decision-makers at companies is the bane of many a business-to-business mailer. According to John Coe, president/founder of Database Marketing Associates, a Scottsdale, AZ-based strategy and execution firm for b-to-b companies, 62% of key decision-makers change at least one attribute of their jobs each year.

So what’s a cataloger to do? Plenty, Coe says:

  • If your file has 45 contacts at Widgets International at the same address, print out the list, put it in a package of brownies, and send it to the mailroom supervisor. “Say, ‘Help and have a brownie on us,’” Coe says. “Who sends the mailroom supervisor anything?”

  • If you believe you have permission to do so, use the Internet to send the addressees your records and ask if they are still correct.

  • Use any opportunity for interaction as a chance to update the lists. Coe recommends the “Columbo” method when customer service reps are on the line with clients. “At the end of a customer service delivery, you can say, ‘Can I ask you just one more question?’ Who in the world will say no?”

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