Most large companies have processes and tools to evaluate and measure what marketing works and what does not. The insights such tools give, enable companies to develop a deeper, more nuanced understanding of their customer base, which in turn allows for better targeted marketing material, which ultimately results in more efficient (both in terms of time and money) marketing campaigns and a greater ‘customer intimacy’. Many small businesses are still overlooking this element of marketing resulting in the wasted investment of human and financial resources.
UK businesses spend an average of £28,187 each per year on their business-to-business sales and marketing. With nearly a quarter (23%) of companies in the UK expecting new business-to-business customer acquisitions to account for at least half of their annual turnover over the next 12 months, it’s hardly surprising businesses are prepared to devote so much money to this activity. However, many businesses are failing to target their marketing spend effectively by investing resources in researching their target audience and prospective contacts.
Marketsafe employed a leading market research agency to conduct a comprehensive study of sales and marketing practices in the United Kingdom. The survey identified a worrying ‘customer intimacy’ gap where firms waste their sales and marketing spend by failing to adequately investigate and qualify potential new business opportunities. ‘Qualify, qualify, qualify’ is an old mantra in the sales industry, yet a staggering number of business are not abiding by this simple rule.
Despite the pressures on their time and money, many companies still do not do their homework before approaching a new business target. Less than half (43%) go to the customer’s web site before contacting them and a similar proportion don’t check who is the most appropriate person to approach. Shockingly, 16 per cent of businesses conduct no research whatsoever into a prospective business customer before contacting them.
Qualifying potential contacts is vital, ensuring the personal information is accurate, establishing their role in the decision making process for the purchase of a new product or service. For example, investment in a direct mail campaign is wasted if the mail out is not going to arrive with a relevant decision maker. Additionally, a mailer with a name or title spent incorrectly may make the recipient antagonistic towards the sender. While the administrative organisation of a sales or marketing campaign is not always the most glamorous activity it is a vital to ensuring success.
A common error is the marketing field is failing to implement metrics to measure the effectiveness of a campaign before it commences, or failing to measure the outcome at all. Too often firms seek to retro fit an evaluation criteria once a campaign has been completed. This strategy provides sales and marketing professionals with the flexibility to alter the criteria for success of a campaign. However, it also allows individuals to distort the results, which may mean a campaign has not actually met the original objectives. Imposing metrics, such as establishing a dedicated phone line at a call centre with a specific number that is used in advertising material enables a firm to measure the impact of that particular marketing activity.
Always test first
Adopting a test and learn approach to marketing can be particularly effective for smaller enterprises. A firm can test a particular marketing tool or creative design in a restricted geography or pool of contacts. For example, firms may test two different creatives for a direct mail shot in two distinct geographic regions. Recording the response rate from the two mail outs can help a firm establish which would be more effective to role out on a larger scale. While there is often a pressure to be seen to roll out a marketing campaign as quickly as possible, taking the time to test its effectiveness can save significant resources in the long-term.
Sales and marketing professionals can also limit wasted investment by assessing the credit worthiness of potential new business targets. While few payments can ever be completely guaranteed, credit referencing services arm sales and marketing professionals with knowledge about a company’s history, solvency of trading partners and directors’ payment records. This enables them to make informed decisions as to whether to target an organisation.
While some commentators would argue responsibility lies with the accounts department of a business to check the creditworthiness of a customer or supplier, this is an antiquated perspective. Sales and marketing teams can waste employee hours on calls and meetings, or spend significant sums supplying a company that poses an unacceptable risk as a trading partner with marketing collateral. If it transpires that a customer is a significant credit risk, with CCJs and a history of bankruptcies it is unlikely any firm would want to offer them a significant line of credit.
To solve this problem, sales and marketing professionals should qualify the credit history of potential targets and analyse their risk profile. Credit referencing services provide information on the creditworthiness of companies and the likelihood of them meeting their obligations to pay monies owed. Avoiding targeting high credit risk customers can help companies reduce wasted expenditure, freeing up additional funds to target businesses that are unlikely to default on payments.
Companies can look to close the ‘customer intimacy gap,’ by utilising the services of business information experts that provide qualified and relevant data. Using a reputable provider of qualified data can save a marketing or sales department significant time and money, ensuring they have the correct contact and personal data for targeting purposes. These resources can be particularly valuable for SMEs that do not have excess manpower to complete extensive in-house research, either on the appropriate sales & marketing contacts or credit ratings information.