Omaha Steaks cooks up corporate sales

Oct 01, 1998 9:30 PM  By

In the two years since Omaha Steaks began building up its corporate sales unit, the $200 million-plus food cataloger’s business-to-business sales have grown 50%. Still, says senior vice president/co-owner Todd Simon, the b-to-b unit isn’t very high on the company’s priority list.

The corporate gift market certainly has sales potential: Average orders for food gifts from business customers range from $150 to $500, says Lois Boyle, senior vice president for Shawnee Mission, KS-based catalog agency J. Schmid & Associates. In comparison, the average consumer food catalog order is $75-$125. Still, many food mailers whose core sales come from consumers are intimidated by the unique dynamics of b-to-b marketing.

“The food catalog clients we have are all heavily confined to consumer marketing,” Boyle says. “We try to convince them they need to go after b-to-b, but it’s a tough market to crack because most corporate food gift buyers are very loyal. Furthermore, you usually have to work with compiled lists, not direct marketing lists,” because you’re seeking companies rather than individual buyers.

Targeting corporate gift buyers often means changing not just how you find prospects but also how you reach them. Simon explains that unlike the company’s strategy for reaching consumer customers, “our corporate marketing isn’t based around catalog marketing. We have a corporate catalog, but it’s more for people who have initiated a relationship with us, rather than to initiate relationships.”

The Omaha, NE-based cataloger contacts business prospects via independent sales reps. “The reps, who don’t work directly for us, already have relationships with large corporate accounts and represent our product line along with other lines,” says Simon, who won’t specify how large the cataloger’s corporate unit is, noting only that b-to-b sales represent “a relatively small portion” of total sales.

Once corporate prospects have become customers, Omaha Steaks sends them reminder notices that include lists of past gift purchases. Such reminders are key to maintaining the corporate gift business, Boyle says. “Virtually all food gift mailers that target businesses send out personalized gift lists at the beginning of the gift-giving season. It’s complicated to execute and expensive, but it pays for itself. Getting these notices out in late August, early September, or October is all part of being the first one on business customers’ minds and making it easy for them to order.”

But while such efforts build corporate customer loyalty for Omaha Steaks, the Figi’s food catalog was disappointed in the results of its b-to-b strategy. Figi’s, a division of general merchandise cataloger Fingerhut, in 1992 initiated a “significant effort” in corporate marketing, “but that didn’t pan out,” says vice president of marketing Mike Lindquist. He can’t say why the effort failed, but he notes that b-to-b sales now make up less than 10% of overall revenue.