Using questionnaires and phone calls to weed out weak prospects
With a postage increase expected in 2001 and future paper prices in doubt, prospecting is likely to become more expensive. Then, too, as John Halpin, senior vice president of direct marketing for motivational products marketer Successories, puts it, the response from cold prospecting “is going to hit a wall at some point.” With this in mind, a number of business-to-business catalogers are turning to lead qualification programs.
Since abandoning an ineffective card deck lead generation and qualification effort two years ago, $27 million Successories has relied on traditional catalog prospecting: mailing a 40-page prospecting book. But early next year, the Aurora, IL-based marketer plans to include on its Website a questionnaire that asks, among other things, about inquirers’ merchandise needs. From this data, Successories can then determine how and whether to contact the online requesters.
“Seventy-five percent of the people who have placed orders on our Website have been new to our database,” Halpin says. “Rather than chase down Web prospects with catalogs or phone calls, we can qualify them this way.”
Using a three-part process
Educational Products, a cataloger of school supplies that targets schools and parent-teacher associations, is looking to combine lead generation with lead qualification. The Monterey, CA-based company has been mailing prospects its 80-page catalog, which is printed on costly 80-lb. stock. But its $70 million parent firm, Earlychildhood.com, which acquired Educational Products in May, plans to launch a three-step generation/qualification/conversion program in 2000 to coincide with the start of the education buying season in January and February.
Kathy Hecht, vice president of sales and marketing for Earlychildhood.com, says that Educational Products will mail postcards offering a flier describing the cataloger’s product line to rented prospects. Interested prospects wi ll mail back the card to request a flier; then, after viewing the flier, they can request the company’s full catalog. Field salespeople or telesales reps will also contact prospects from larger schools and organizations.
“We’re still nailing down the new process,” Hecht says. “Mailing the catalog was cost-prohibitive, so we’re trying to use less expensive mail pieces at the beginning of the lead generation process.” But while Hecht notes that the new effort should reduce Educational Products’ prospecting costs, by trying to personally contact more profitable leads, “we’re really looking for top-line gains, not bottom-line savings.”
Making the call first
Direct-to-retail greeting card mailer Colorado Card & Curiosity uses a straightforward lead qualification program for half of the prospect names it rents: It has its outbound telemarketers call them first to see if they’re interested in receiving catalogs. Those who say yes are mailed a catalog and an introductory letter, says Neil Sexton, president of the Trinidad, CO-based catalog. The other half of the prospects receive catalogs with no prior contact.
“We used to call 90% of our prospect names,” Sexton says, “but we have gotten more aggressive with our mailings because they have been effective on their own.”
Nonetheless, like Successories, $500,000 Colorado Card hopes to capture more prequalification data on its prospects by developing a Website catalog request form within the next year that will include questions about the requesters’ business size and specific product needs.
Some b-to-b catalogers qualify the names they rent by running them through prospect models. Tim Swigor, vice president of Burlington, MA-based database marketing consulting firm Epsilon, says that although it can cost more than $20,000 to build a prospecting model, “when you look at it over a 12-month period, the payback comes in a short period of time.”
With prospect modeling, “you can overlay information you get from prospects or rented names with business information, such as the number of employees at their companies, the number of years they’ve been in business, and other details, and then model it against your best customers to identify your best prospects,” Swigor says.
With a model in hand, instead of renting a large quantity of names, “you can negotiate with the list owner on a net-name arrangement, but you might identify only one-third of the pool of names that you find most likely to respond to your catalog,” Swigor adds.
One business-to-business cataloger Swigor worked with recently would have spent $9.5 million to mail to all the names it had rented, which were primarily from PC magazine subscriber files. But by spending $200,000 up front to run a prospect model, Swigor claims the company achieved a 150% return on investment and cut its catalog mailing costs because it mailed to significantly fewer people.