Finding the Institutional Market

According to Sweet Springs, MO-based list compiler MCH, the business-to-institution (b-to-i) market makes up 23% of the U.S. economy.

And schools, religious institutions, healthcare facilities, and other institutions buy a diverse range of products. Churches and other places of worship, for instance, need office products, computer software, furniture, first-aid supplies, maintenance products, restroom supplies, kitchenware, and even toys and craft supplies, among other items. So mailing to the buyers that make up the institutional market would seem to be a sure way to increase revenue.

But locating likely prospects can be a challenge. For starters, there’s job turnover to consider, says Steven Klindworth, owner of Liberty Hill, TX-based Supercircuits, a cataloger of video and recording equipment: “The turnover is so frequent you may not know if your catalogs are getting into the right hands.”

Of course, turnover is a problem for most business catalogers in search of prospects. But making matters worse, according to Klindworth, is the length of time it generally takes institutional buyers, who are often even more budget-conscious than corporate buyers, to complete a purchase.

“It was a matter of finding the right people with the right budget,” says Warren Sukernek, the former president of Newton, MA-based furniture cataloger Oriac Design. “It’s question of doing all the hunting and gathering of names to make the market work.”

But for all the challenges, numerous catalogers find marketing to institutions lucrative enough to compensate for the effort. If you’re considering giving it a go, here are some tips for locating prospects:

Tip #1: Don’t rely on traditional SIC codes

Because the Standard Industrial Classification (SIC) codes were established in the 1930s, it is difficult if not impossible to identify many of today’s b-to-i markets via SIC code. For instance, there is no SIC code for assisted-living complexes for seniors. Fortunately, assisted-living centers are identifiable using the North American Industry Classification System, or NAICS (6233 is the NAICS code for “community care facilities for the elderly). The U.S., Canadian, and Mexican governments jointly introduced NAICS in 1997 “to address the criticism of the SIC, specifically the emergence and growth of the service sector,” says John Hood, president of MCH.

Tip #2: Mail to multiple names per institution

If you sell big-ticket products, don’t automatically choose the one-name-per-business/institution select. At many institutions, the decision to invest in major equipment is made by a committee rather than one person. So if you’re selling, say, radiology equipment to healthcare clinics, you may want to send your offer to purchasing managers, directors of radiology, and business or office managers — provided that you have their names, not just their titles. Which brings us to…

Tip #3: Don’t mail to a generic title

If your catalog isn’t addressed to a name, chances are good that it won’t make it out of the mailroom. This is especially true when prospecting among large institutions. Hospitals, for instance, can have more than 200 departments, says Susan McNamara, vice president for Irvine, CA-based list compiler SK&A, and “each has a certain structure that comprises its own market.”

Tip #4: Beware of home addresses

Keep in mind 30%-40% of the names on association lists may be attached to home rather than business addresses, says Chris Lundgren, executive vice president of sales and marketing for SK&A. Mailing business offers to home addresses will likely curtail response.

To get around this, Phoenix-based religious-products marketer Autom, which mails the Autom Catholic, Autom Christian, Autom Trade, Autom Church Supplies, and Autom Consumer catalogs, makes sure it has a functional title for each prospect name it mails. The company merge/purges names from the Official Catholic Directory or American Church List with those from a subscriber list, such as that of Catholic magazine.

Choosing the title select also helps Autom prevent overmailing to a particular church or organization. According to Bethany Beach, DE-based catalog consultant Steve Lett, Autom creates a report that tells it how many catalogs are mailing into each institution. “That way, we can regulate how many copies we’re mailing and decrease the amount of catalogs when we see it’s appropriate,” Lett explains.

Tip #5: Make sure the list was updated recently

Remember what we said about frequent turnover? For that reason, be sure the lists you rent have been updated within the past quarter, says SK&A’s McNamara.

As with any other list, you should also find out how the names were gathered. Was the list compiled from public records and then corroborated/ updated by phone? Or was it simply culled from a directory? If it’s the latter, you’re probably not working from the most current information.

Tip #6: Think outside the box

This ties into the fact that institutions, like the government and corporations, buy products other than those strictly related to the services they provide. After all, synogogues, homeless shelters, and senior centers alike need soap, security systems, and shelving.

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