Using marketing to talk direct with potential customers can reap measurable rewards for brands. And for business-to-business (B2B) marketers, it can mean huge returns on the initial investment. Service provider Cisco, for example, says it aims to get back 20 times the amount it spends on direct campaigns.
Yet a shocking 43% of business marketers do not measure the return on the outlay put into their marketing campaigns, according to the Institute of Direct Marketing’s latest B2B barometer. This is unacceptable, according to Debbie Williams, head of global demand generation at Vodafone Global Enterprise.
She says: “With any element of marketing, irrespective of whether you are responsible for lead generation – and therefore have a transparent link to a revenue number – we as B2B marketers should always be looking for the relevant and appropriate metric.”
But Williams, who also chairs the IDM’s B2B Council, says the good news is that business-to-business marketers can measure DM campaign results relatively simply.
She advises: “If you are running an integrated campaign, you can look at channels individually. So for an email campaign to a customer you can measure click-through rates. You can also measure the average deal value, sales cycle time and can start benchmarking yourself. Then you can see how many people are really interested, based on your experience, and work on metrics that talk about conversion.”
We know who the people we’re talking to are. We won’t send generic messages
Catherine Jacklin, FT
But she adds that it can be tricky to set a minimum target as Cisco does, because the amount spent per customer can vary, as can the results. “Particularly with B2B, the size of the purchase can vary so significantly. So, in the part of Vodafone where I work, the average deal is millions of pounds because we are dealing with global contracts.
“The 1:20 ballpark is something I have worked with [prior to joining Vodafone] and you tend to see it in the IT or technology industries. What is extremely important is that marketers embrace a culture and have individual responsibility to be metrics-focused.”
For Carol Wright, marketing services manager at Pitney Bowes, who is also on the IDM Council, each campaign she runs has its own targets, agreed by raising a business case for the activity in advance.
“The right message with the right offer at the right time to the right person is what marketers should be doing,” she states. For this to happen, brands need to segment their audience carefully. “We analyse our existing customer base and look hard at segmentation. We have also identified a group of companies that we would like to see as customers, and we concentrate on those for marketing,” Wright adds.
Pitney Bowes looks at how current customers behave and applies it to prospects, which could mean analysing what clients do online and what communication they have previously responded to. For David Chalmers, who looks after Cisco’s UK marketing strategy, the past year has meant more of a focus on modelling customers’ and prospective clients’ behaviour and then targeting them with relevant DM.
“We have a new director of enterprise marketing who takes a very scientific approach and has changed how we identify targets. There is now a very big focus on customer data, and making sure we are getting the right message to the right person,” he says.
Getting accurate information about prospective customers is the focus for Cisco, rather than the marketing execution itself, says Chalmers. It took two months, for example, to gather the right data on prospects for a campaign about to launch that is being aimed at a new market for the company.
The groundwork included buying lists of contacts and then using the sales team to check they were accurate. “We did not want to contact current clients with direct marketing that isn’t relevant,” he says. The 1:20 investment to return ratio is something that Chalmers says the business has struggled with in the past, but is getting closer to as a result of focusing on identifying accurate targets through data.
“The other big thing for us, in terms of direct marketing and marketing in general, is that it is becoming much more personalised. It won’t be just a bland, anonymous message from Cisco, it will be from an individual.” People receiving a direct message from Cisco will find that it is much more personal to them, he claims.
Developments in personalisation could include having experts running social media sites about their particular sector, and invitations sent to people on their mobiles to interact direct with call centre staff using mobile video conferencing, says Chalmers.
Making sure that people who are already clients are not sent marketing materials for other campaigns can be difficult to get right. For Vodafone’s Williams, monitoring contact with customers is crucial.
“It is an ongoing journey because data is a live asset. It is really important to look at how many times we have communicated with individuals and when they have responded, so we don’t bombard them,” she says.
In B2B direct marketing, the length of time between the first contact with a prospect and a sale can be considerable. “Through the intelligence we gather over time we are getting a much better picture of what people are interested in. It is about very careful integration, because you communicate with people over an extended period, which could be three to 18 months,” explains Williams.
And remember that direct communications can be through many different media, she adds. For example, DM is at risk of being filtered out by ’gatekeepers’ such as PAs and prevented from reaching their intended recipient. However, a survey by Forbes, The Rise of the Digital C-suite, shows that board members tend to have search engines as their homepage and are seeking out information about companies themselves through the web. “They access search and video directly themselves, they are not delegating,” she explains. Targeting this audience, therefore, could be most successful through digital channels, such as a search marketing campaign.
However, there is still a role for printed mail when trying to reach board-level prospects, Williams believes. “Targeted printed direct mail can work extremely well. These pieces can be quite expensive but they do actually cut through to the decision-maker. This technique can be used more broadly, for example when you are using eye-catching personalised pieces to attract people to an event,” she says.
The Financial Times used direct mail to target 1,500 media buyers at agencies and brands, sending them a business card holder engraved with their initials. The card inside then had a personal web address where online content was tailored to them, providing data about their market, case studies and recommending a buying strategy.
FT head of B2B marketing for EMEA Catherine Jacklin claims the campaign had a response rate of 45%. She says: “This is typical of how we approach B2B marketing: we stick closely to the people we are supposed to be talking to. We know who they are, we know where they work and the accounts they work on. We won’t send generic messages.”
Jacklin uses a CRM system to monitor marketing and contact with clients and what they respond to. It gives the sales team a single view of customers.
This single customer view can also help marketers decide which businesses they are going to make money from, according to consultant Professor Bryan Foss. “Marketers need to separate those organisations that are cash cows today from those that will be long-term profit drivers. You may even find that your board has not thought about its customers in that way. If you start to segment your clients properly then you will get more back for that same level of investment,” he says.
With budgets tightening up, surely it is crucial that marketers know who their potential customers are and what their return on investment is. And with the right intelligence, direct marketing can reap the rewards for business.
What is direct marketing?
Sometimes called direct response, this is a type of marketing that aims to get people to reply to communication from a brand. It could take the form of emails sent out to prospective customers, TV advertising with a strong call to action, or mail sent to people inviting them to an event, for example.
How is B2B directing marketing different from B2C?
The principles are the same: a brand wants to get a customer or prospect to respond to communication and eventually spend money with it. But B2B DM tends to be more targeted and takes longer to reap rewards. The client spend a marketer gets back is likely to be much higher than in B2C marketing and the relationship created by this type of communication may then be managed by account managers.
brand in the spotlight
Marketing Week (MW)/ How do you use direct communication to get new business?
Richard Robinson (RR): Critical to targeting messages to potential new customers is understanding where they are in the buying cycle and when they are actively looking for information.
MW: How do you use search marketing?
RR: We use search marketing very heavily in our acquisition strategy and we try to acquire a lot of small and medium-sized businesses to advertise with Google. We use a direct marketing approach – so when someone is looking for something, we target them with a very strong message through AdWords.
MW: What about other types of DM activity?
RR: Whatever you do needs to be integrated into the whole strategy, including customer retention, cross-selling and up-selling. Simply looking at it from a direct marketing approach is almost creating silos in marketing, which you absolutely should not do.
Another thing we do from a direct marketing perspective is target [people] with direct mail or leaflets in particular. So we have money-off vouchers for AdWords to try to capture those people who haven’t used the product. We also did a mailout around promoted videos on YouTube.
MW: How do you make sure direct messages are consistent?
RR: We have multiple methods of doing that. In our high touch [high value] sales team, where there is a relatively small number of accounts, including SMEs, it is very much driven by face-to-face and telephone. We segment our clients by revenue and growth opportunity. There is a huge number of smaller companies, so we would use email marketing to them, letting them know about new products and services. We do quite a lot of webinars to keep people informed of new products and solutions that are coming out as well.
MW: What trends do you see happening?
RR: Mobile is here, finally. The penetration rates of smart phones among business decision-makers is very high and it is becoming the de-facto business tool. Targeting people through those devices is a critical strategy for a marketer. I’ve seen evidence of Google clients targeting iPad users where for $10-$12 of advertising spend they have seen $12,000 back. Anything we develop has to work on mobile.
Head of global demand generation
Vodafone Global Enterprise
We are going to see continued growth of marketing automation software. They are very powerful systems allowing marketers to track and understand prospects’ behaviour online, how they are responding on your website, what they are downloading and where they are coming from.
It builds up a ’digital body language’. All that insight is critical in terms of refining a marketing plan and strategy.
Some brands aren’t measuring the ROI of digital activity yet. But because marketing is so much more accountable for the money it is spending, there will be a focus on metrics.
Market manager for the UK
Data will continue to be a focus, leading to very personalised marketing and planning based on specific business needs.
Mobile marketing is another big priority for us, because mobility is a core part of the solutions we provide.
We are looking at how we can use [our mobile website] for engagement and interaction, and we will be doing much more from a direct marketing perspective.
For example, we will bring people to the mobile site and provide interactive tools such as online conferencing.
Marketing services manager
Direct marketing is now about being personal and professionally presented.
We have a marketing database that handles all our transactions, electronic or paper-based, so we can see when we have emailed or mailed people. We can manage all our communication
centrally and have good ideas of who responds to what.
It’s important to be able to measure responses accurately, wherever they are coming from. We know when we talk to a customer and we know when they respond but it might not be instant.
top tips you need to know
- Segment the market/ Understand who your customers and potential customers are and what services would make their lives easier.
- Measure: Know how much is being spent on each piece of communication. Keep track of the responses and monitor how much return there is
- Set targets: Work out what return you want to get, based on past performance.
- Integrate: Make sure direct marketing is part of broader activity. The combined force of multiple media means better returns.
- Be patient: Sales cycles in B2B can be years, so marketing to this community requires you to talk to people at the right time and then wait until they are ready to spend.