Direct marketing is often referred to as ‘one-to-one marketing.’ But when it comes to using direct to sell to big business, I prefer ‘one-to-many marketing.’ There are many more people involved in the selling process – big business is characterized by more complex, multi-step engagements with long sales cycles and, in the majority of cases, a sales force.

While the basic principles of direct marketing remain the same – getting the right message to right person(s) at the right time – the right approach and the steps required can be a challenge. You absolutely need to understand:

* How big businesses make decisions

* The role of the sales force

* The metrics behind lead conversion

* How to break through the big-business clutter

* The customer sales cycle

Your target is bigger than you think (and you have to hit all of it)

The first step is to know your audience – and I mean really know your audience. A big-business audience is obviously quite different than a small-business or consumer audience.

Much more than the special incentive and even more than the design and messaging of the package, the most important factor leading to the success of any campaign is targeting, with 60% of the success of any campaign relying on the list.

With big business, a more complex buying proposition requires a more complex, time-consuming planning process. If you want to sell your product, you must know who will buy it. Is it the CIO? The manager of operations? Or maybe it’s the VP of procurement? Odds are that it’s not just one of them, it’s all of them.

Target the decision-making unit

In enterprises, a committee or a ‘group’ of people usually need to give a collective nod of approval before anything can be purchased. Understanding the make up of this Decision Making Unit, or DMU is absolutely vital to the success of your direct marketing efforts. The various roles include three basic categories:

Influencers – often Line of Business (LOB) executives who have a particular business unit problem they need solved. For example, increasing the share of wallet among existing customers.
Recommenders – commonly operations people who will recommend a solution to solve the LOB’s problem. They’re more focussed on internal issues such as implementation and logistics.
Approvers – CFOs or CEOs concerned with how the investment will impact the bottom line and potentially, shareholder value.

Each role brings different points of view to table and may require a different understanding of your offering.

Recognizing the DMU exists in theory is the crucial first step. Putting this theory into practice – i.e. identifying the specific DMU in your targeted companies – is the obvious next step.

Who’s really on your list?

Surveys show that it’s not uncommon for 40% of titles to turn over in a year, making it very dangerous to rely on rented or internal lists alone. So whether you purchase names from an outside vendor or collect them through internal resources such as a sales force contact list, it is absolutely vital to qualify those names in advance of rolling out a campaign. Rented names are often only updated once or twice per year. And it’s unlikely that sales reps will maintain completely updated lists since many ‘leads’ do not pan out and therefore, are not maintained.

Using outbound telemarketing to pre-qualify the list dramatically increases your chances for success. In fact, I’d even go so far as to say that you should not plan a campaign without it. Yes, there is the incremental cost in time and money to do this, but consider the value of the people you’re trying to reach. And the relatively small number of big businesses in Canada makes pre-qualification quite manageable.

Get the message right

Once you’ve specifically identified the names and titles of those you want to contact, you must determine the appropriate messaging strategy. The CEO likely cares more about bottom line and shareholder impact. The LOB manager has a vested interest in the effect of the product or service on the company’s customers and customer service. The operations guy wants to know which solution can most effectively be integrated with existing systems and still fulfill the line of business requirements.

This doesn’t mean you must develop completely unique communications for each target. Simple variable elements and copy, however, will make a big difference in improving the level of consideration your offering will get.

Why engaging the front lines is crucial

While it’s obviously the task of the marketing department to identify opportunities and develop programs to promote the company’s products, this cannot be done in isolation. In most cases, sales force or customer service reps will be the ones actually talking directly to customers and facing customer issues.

At the same time, it’s not uncommon for an adversarial relationship to exist between sales and marketing. The sales reps know the market and their customers and will be reluctant to embrace marketing efforts that bypass sales and talk directly to their customers.

Marketing must get sales rep buy-in. Get them involved early in the planning process to instill a sense of ownership.

Link direct marketing to sales

Direct marketing can be incredibly effective at turning suspects into prospects and warming up prospects for direct sales involvement. This allows the expertise of the sales reps to focus on turning warm leads into sales and building relationships with current customers.

It’s also valuable to tap into the first-hand knowledge of the sales force. It can provide valuable insights that can lead to brilliant creative hooks. Often, marketing managers will develop programs and offers based on well- thought-out strategies, a thorough understanding of the market, and undeniably good intentions. But all too often, they see the implementation and fulfillment of the program collapse due to unaddressed issues that could have been foreseen by sales.

A final point to consider when engaging the frontlines, is to have them vet the mailing lists to purge out current leads. It can undermine the efforts of a sales reps if a customer receives a solicitation that doesn’t mesh with the relationship already established with a sales rep. Build time into your campaign schedule to allow individual sales reps to review the names and modify the list as necessary.

Invest to win – establishing metrics for success

As with any campaign, there must be a business case developed to identify the ROI that will be achieved. In consumer or small business markets, campaign response, conversion and cost-per-sale are often the primary drivers of determining the sales dollars that will be achieved.

With big business, however, most marketing efforts will not result in a direct sale, but rather, will simply generate leads that should then be qualified and passed onto the sales force. In cases like this, response rate alone is not an appropriate measurement.

Ideally, the success of campaigns should be measured on a pre-determined ‘allowable marketing cost per order.’ This is a specific dollar amount that, if achieved, will provide the necessary return on the initial investment given the potential value of a new customer. While this sounds like common sense, a recent global study by Ogilvy revealed only 15% of companies have a targeted acquisition cost (CMAT Study 2002) !

For example, if your company sells typical office products and the average customer is worth is $1,000, it might be viable for marketing expenditures to acquire a new customer be in the range of $100 to $150 per lead. Alternatively, if your company sells higher ticket items and the average customer is worth $3 million, then it can pay out if $5,000 to $10,000 is spent per qualified lead. Obviously, understanding what your allowable cost per lead is will have a dramatic impact on your marketing plans. This can mean the difference between sending out a standard direct mail letter and a multi-wave, high-impact, multi-channel campaign.

Once an allowable cost-per-order is established, you can work backwards, taking into account conversion rates for qualified leads, percentage of gross leads that are qualified, and ultimately, the required up-front gross response rate. (See inset for sample calculations.)

Establishing an allowable cost per lead isn’t necessarily an easy task. There are many variables that come into play that can swing the outcome in different directions. However, knowing this information can have such positive effects on establishing appropriate budgets and developing campaign elements that truly drive the ROI.

An accurate ‘allowable’ must also consider if it’s more relevant to evaluate this based on the number of individuals contacted or the number of companies contacted. Often, you’ll want to communicate to multiple people within the decision-making unit. Realistically, however, you’re only going to make one sale to that company.

Where did all the leads go?

The final key area for planning a direct marketing campaign to big businesses is to ensure all efforts can be measured and tracked from contact through to a sale. This is another occasion where marketing must collaborate with the sales team to address two main issues: sales force follow-up of leads and tracking individual prospect names through the sales cycle.

The ‘black hole’ syndrome – when prospects respond to your communication but are not followed-up on – occurs at an alarming rate. A new study from Minneapolis-based Performark, Inc. found that 60% of B2B firms did not respond to inquiries within 60 days (The Impact of the Internet on Response Management, Performark, Inc., 2001).

This can occur for a variety of reasons but most likely each relates to a lack of defined processes. You need a process for forwarding leads to the appropriate sales team, a process for timely follow-up by the sales reps and a process for recording the results of the follow-up.

A key element here is the quality of the lead. Feed great leads to sales and you can expect diligent follow-up. Feed garbage and the sales force will disengage quickly. A potential solution to address this issue is to ‘pre-qualify’ the gross leads before they are passed on to sales to ensure the responder is legitimate. When appropriate, you should employ a pre-qualification process using outbound telemarketing. This identifies the business potential and warms the prospect to contact with a sales representative.

Another issue lies in how the follow-up activity is then recorded and fed back to marketing so that a campaign ROI can be established. Most sales reps despise bureaucracy and ‘paper work for head office’ and can be fairly possessive about their own leads and customers. They need to feel ownership. They need to be reassured that marketing is not out to steal the spotlight but rather is continually monitoring the success of their efforts to improve for the future.

When it comes time to establishing your key measurements of success, it goes without saying (but I’ll say it anyway): you must understand what the realistic output is and what is really trackable. For example, if you can’t confidently track a sale back to a specific name, you can’t judge the success of a direct mail campaign based on sales revenue. You’d only be setting yourself up for failure. This is an all-too-common phenomenon in direct marketing to big businesses. With a multi-step, complex and long selling process, it’s often extremely difficult to track a lead all the way along the sales cycle.

Marketers need to recognize the gaps and use this knowledge to develop realistic measurements of success. Perhaps it’s simply to get on the short list of potential vendors or generate a pool of leads to be further qualified and passed onto sales. Regardless of the goal, it needs to be clear, precise and measurable.

Know where you are in the sales cycle

It’s important to recognize what stage of the sales cycle your target audience is currently in. Are they simply gathering information? Or are they identifying a short list of highly qualified potential partners? In most cases, the goal of the actual package is not to garner an immediate sale but rather to start to build a relationship and lay the groundwork for a business partnership and to move the prospect further down the sales cycle.

Think of an actual face-to-face sales meeting. A good sales person wouldn’t meet a new prospect and ask for a sale in the first 30 seconds. They would demonstrate credibility through knowledge and understanding of the prospect’s business issues or competition or opportunities in the marketplace.

With proper planning and knowledge of your sales cycle you can be sure to time the execution of your communications to maximize your return and avoid missing the window of opportunity. For example, Pitney Bowes used to approach their customers for lease renewal three months prior to the equipment lease expiring. The reality was the large customers began to renew their contracts 12 month prior to expiration. By the time Pitney Bowes contacted their customers, many had already engaged with the competition. This further supports the research conducted by the London, U.K.-based Henley Centre, which identifies the number-one reason (67%) large business-to-business clients leave you is indifference or no contact.

I’ll say it again: it’s a multi-step, complex and long sales cycle. If you fail to recognize where your marketing efforts are in the process, or if you try to cut corners, you’re setting yourself up for disappointing results. Talking to your customers in the right way, at the right time, is absolutely crucial.

Making creative sell

Like many of the other items already discussed, the creative approach to big business is also unique. Businesses today are looking for smart companies to partner with whose offering will enhance and complement their competency. They’re not just looking for a new supplier of widgets. So the creative should say, ‘My company is a worthy partner for your company and can provide a solution to your needs.’

The creative needs to address the hot buttons of the audience at that stage in the cycle. What’s the customer insight that will capture their attention on a rationale and emotional level? You don’t need to tell your whole story in one shot. Ask yourself what factors will give your company a higher level of consideration for taking the relationship to the next step. What specific customer ‘pain points’ do your product or services solve? Perhaps you need to show your product specifications match their needs. Maybe it’s your superior and proven commitment to after-sales service. Or it might be your price guarantee.

The hot button will vary by audience. But if it’s addressed at the right time, it can lead to a very powerful creative nugget that really connects with your audience. You want to tell enough for them to conclude you are worthy of further consideration and make it easy for them to take the next step.

Designing creative to sell

For big business, the design of direct mail creative will play a big role in ensuring the piece actually reaches the intended decision- maker. The average business person receives more than 30 pieces of mail each week. So your piece has to stand out. Given their corporate status, many decision-makers will have assistants who act as gatekeepers by filtering out undesirable mail before it reaches the intended target.

So how do you overcome these obstacles?

A three-dimensional package has been proven to be extremely successful at ensuring the target actually receives and opens the communication. It’s a simple fact – people like receiving bulky packages. It’s fun. It’s intriguing. Nobody throws away a box before seeing what’s inside. It’s human nature.

While a dimensional package will aid in getting your message noticed and opened, for true success you must ensure your surprise and delight doesn’t turn into a surprise and disappoint. Creative packaging that builds intrigue must be immediately followed by a pay-off that demonstrates business value. You must respect a prospect’s time. Once you have their attention, you should quickly get to the point. After you’ve done this, they’ll want to spend time with you and discover what benefits you can provide.

One brand, one voice

Of course, all creative should always be true to the brand and speak in one brand voice. Customers do not identify with marketing ‘channels.’ Customers do not differentiate a brand by the medium used. Every customer touchpoint is an opportunity to reinforce the brand values, regardless of the channel. Direct mail creative must connect with advertising and other marketing vehicles to continue to strengthen the brand message and present a consistent personality to your audience. It’s not always easy to execute given some corporate structures and politics but is an undeniably powerful and efficient way to build a strong brand.

Getting the response you want

Assuming the target is interested in taking the next step, you must make it easy for them to respond. The response devices in the package – phone, fax, e-mail, Web, mail – should be easy to understand and complete.

You should always give the customer a choice of how they can reply. Don’t assume that customers will be okay with one method of responding. Say 5% of people who are interested in responding procrastinate because they’re forced to respond via the Web but don’t have easy access to it. Inertia sets in and they never reply. That 5% could mean 100 leads that could mean multiple sales and lots of revenue. Somewhat surprisingly, in this wired world we still see the majority of responses coming in by the tried-and-true business reply card or envelope.

A reply device should also be used as a vehicle to collect additional information. Ask for enough relevant details that are not too confidential, and that can be used to further segment and qualify the lead.

This is another opportunity to defer to your call centre staff or sales force. What are the first things the call centre needs to know about a prospect? It could be their title (which indicates their decision-making authority), the timeframe to buy, or a specific product category of interest. By having the right questions on the reply device, you can streamline the qualification process and speed the service for the customer.

The offer

As any direct marketer will tell you, an offer – an added incentive to respond now – will motivate more people to take action. More specifically, in a business-to-business environment, you want to encourage the decision-maker to take the next step and move them further down the sales cycle.

If the customer or prospect is still in the information gathering stage, that next step could be a request for more detailed brochures and documents; attending a seminar or Webcast; or signing up for your e-mail newsletter. If they need more specific or customized information, the target might need a personal visit or consultation.

Regardless of your particular sales cycle, the offer must always be strategically relevant. Information-based offers consistently perform very well. Exclusive white papers, books, events will educate the prospect and assist in the evaluation of potential business partners.

For best results, the offer should be highly prominent in the communication whether that’s in the headline, highlighted with bold text in the letter or repeated throughout the package on each component. Don’t assume the audience will discover it – make it so obvious that they can’t miss it.

Offers are another area where marketers can gain valuable insights from front-line sales staff. Those with direct customer contact will know what makes customers tick and what can help in generating interest in your offering.

A common offer used across all categories is the ol’ trinkets ‘n’ trash, the tschokes, the freebie giveaways. There’s no doubt these drive responses – we all love free stuff!

In the business-to-business arena, however, these should be used with much caution. They definitely will encourage people to respond but will drive less qualified responses: those who just want the T-shirt and have no interest in doing business with you. While the response rate looks good, it can be a very costly proposition and can be very de-motivating for the sales reps who will spend much time trying to contact these dead-end, so-called ‘leads.’

The more time your sales force wastes on unqualified leads, the less likely they will support future marketing programs. If you’re just looking for volume of names to fill a database, trinkets can help, but if you need to fill the opportunity pipeline with real business leads, stick to strategically relevant, business-related offers.

Follow-up

One final step of your direct mail effort is follow-up telemarketing. Time and time again, a phone call to follow up on a previously mailed communication dramatically boosts response – as much as 400% to 500%.

Your enterprise target is an incredibly time-poor person who may be extremely interested in your solution but can’t find the time to act on that interest. We’ve experienced campaigns where more than 90% of the leads are captured through outbound telemarketing and only 10% through the customer proactively responding. You say you can’t afford the incremental cost of telemarketing services? Given the boost in leads generated, you can’t afford not to include this remarkably effective channel.

It’s a different rulebook

The most critical thing to remember in marketing to big business? Patience. It’s a process that involves detailed planning, longer sales cycles, multi-prospect targeting, and co-ordination between your sales and marketing people. No doubt, direct marketing to big business requires significant effort. But it can work, and in our experience, it does work. To be successful, you just need to follow a different rulebook.

Chris Janzen is management supervisor, account service at OgilvyOne worldwide. He can be reached at chris.janzen@ogilvy.com.