B2B DirectMarketing Guide

The Direct Marketing Association DMA House70 Margaret StreetLondon W1W 8SS

E: [email protected]: www.dma.org.ukTel: 020 7291 3300Fax: 020 7323 4165

Designed by Da Vinci

Successful Business to Business Direct Marketing

. . . an essential guide for small and medium organisations

Fit for the Futurebusiness learning from business

It has not been written for major companies theyalready invest time, effort and marketing spend in thesame arena, often through direct marketing agencies.Rather, it has been developed to help small businesses,which do not normally use agencies or consultants. Forsuch companies, where senior staff typically wear manyhats, from management to finance, marketing to sales,marketing plans are often difficult to produce and reviewobjectively. This booklet offers a structure to overcomethe problem.

While the following 26 pages do not provide sufficientroom to cover every aspect in depth, they do introduceall the areas you will need to be aware of. The definingof marketing objectives, for example, together withbudgets and costings, design and image, and thevarious media available. There are also lots of referencesshowing where to find further information.

If we achieve nothing more than compliance with legalrequirements and best practice for those who use thisbooklet, we will be delighted. Like many areas ofbusiness, direct marketing combines common sense and controls with inspiration to produce the very bestcampaigns. This booklet hopefully pushes readers in the right direction.

If there are some key rules to remember about business-to-business direct marketing, you will find after readingthis booklet that they are:

Everything you do should be measurable.

What you learn from one activity should be used to improve subsequent activity.

Keeping plans and executions simple is much more likely to deliver results.

Plans should be based on real expectations rather than wishful thinking.

Particular thanks for the compilation of this booklet are due to Kevin Allen of Cramm Francis Woolf; Denise HendersonCleland of Snarx; Michael Howe of100 Percent Direct Marketing and Rita Courtney of theDirect Marketing Association.

Fit for the Future, the National Best Practice Campaignled by the CBI and supported by the DTI, has endorsedthis booklet.


Introduction

02 Across the UK, in every sector and to every audience, business-to-business direct marketing generates enquiries, leads anddirect sales, as well as helping companies to establish and maintain their brand presence. This booklet has therefore beenproduced by the Direct Marketing Association to help small to medium sized businesses understand what business-to-business direct marketing encompasses, how to plan and execute effective campaigns and how to do so within a legal andbest practice framework.

Page

Business Objectives 04-05Defining your business and marketing objectives

Budgets & Costings 06-07Establishing marketing and campaign budgets

Design & Image 08Achieving the right image for your company, consistently

Creativity 09The key considerations when developing your creative brief

Media Options 10-17The principles and creative strategies of direct marketing media, covering direct mail, press,inserts, directories, telemarketing, the Internet, e-mail, radio, TV, door-to-door and tradeshows

Databases & Lists 18-21Building a database, including sources of information, and the list market

Testing 22-23Improving and enhancing your marketing through testing

Compliance & Best Practice 24-25The rules and regulations, voluntary codes and best practice

Resources 26Ensuring you have the right resources to control the process

Further Information 27Contacts for in-depth information, including the DMA website, library and resources


Contents

03

Strangely, perhaps, one certainty about business andmarketing planning is that what actually happens willvary from the plan. Having specific objectives and astructured plan, however, will identify what you need todo to get back on track.

Lets say you run a marketing campaign, for example,and estimate 200 new business enquiries will result in100 new clients. While this may be logical, based uponpast experience and achievable, a what if projectionwill guide your future actions, if you do worse or betterthan expected.

If you gain 300 enquiries, do you have the resources andfunding to convert them into profitable business? If, onthe other hand, there are only 100 enquiries, how do you cut costs and adjust to a lower than expectedbusiness level?

This is not crystal ball gazing, just sensible planning thatcan prepare you and your business for everyeventuality. There are many textbooks available thatoutline the various methods of planning your business,but any plan should answer the following questions:

GrowthWhat size would you realistically like your company to be?How quickly can you get there?How much profit could you reasonably make?What rate of growth can you fund?Do you need to change location to achieve this?Do you need more staff?How does your role change?

Competitive AnalysisWhat are your competitors doing locally, regionally, nationally and on the Internet?What are they better at than you?What are your strengths?How can you gain a sustainable competitive advantage?

Market AnalysisWhy do your current customers use you?Why do other customers buy from your competitors?How many similar customers remain in the market?


Business Objectives

04 Whether establishing goals, or deciding how to realise ambitions, all businesses need a plan a roadmap, if you like, to thefuture. An integral part of any such plan, either to achieve growth or at worst stop a decline in business, is the Sales &Marketing strategy. Used wisely, with measurable objectives against which to monitor progress, identify shortfalls andhighlight successes, it can make the difference between winning and losing.


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. . .once you have a plan, you need to constantly monitor, amend

and question it . . .

Customer LoyaltyAre you providing the service your customers really need?How will their needs change in the future and how will you change your business to anticipate them?Are you rewarding regular customers through loyalty schemes?

Developing existing customersDo you have all of the business from your customers?If not, why not?What else could you sell that is complementary to your existing business?

More customersWhere do you find more customers like the ones you have?Can you work further afield or through the Internet?Where can you advertise to gain prospective contacts?

TargetingHave you defined your market by secondary as well as primary targets?Have you considered media options that offer routes to incremental business from your secondary targets?Are there niche markets where you could positionyour business specifically?

ExtensionsWhat can you add to your business that meets another related market need?How can you fill spare capacity?

PartneringIs there a non-competitive business with a similar customer base where you can jointly provide a betterservice to customers?

While this may look like a daunting list of questions, youwill probably have answered many of them already, evenif unknowingly, simply by thinking about the futuredirection of your business.

The most important point to make is that once you havea plan, you need to constantly monitor, amend andquestion it. That way, you can decide how achievableyour plan is, particularly if additional investment isrequired to achieve your objectives.

A good idea is to take a range of views and see whathappens if the theoretical outcome meets your besthopes. As importantly, see what happens if results areless than you hoped for. And, as we said in theintroduction to this section, react very quickly tochanging information.

The DMA library, based within DMA House at MargaretStreet, has many books on business planning, but ifmarketing and particularly direct marketing are areas youthink you know nothing about, remember that we allreceive lots of it. So if you ever thought thats a goodidea, or that was nice of them, or Im going to buythat, think how you could adapt the same ideas for your business.

Remember too that your existing customers are not onlyyour best customers but also the most likely source ofextra business. So even though acquiring newcustomers is crucial to the future, you also need to lookafter your present customers.

Planning your budgetLets say, for example, that you budget to spend 1,000 a month on a particular marketing activity. After 3 months, you could expect to receive half of thatspend back in terms of extra income. After 6 months,the extra income generated could well recover themonthly budget. And after 9 months, this could turn into a profit of 500 a month.

So while you would commit to spending 12,000 a yearon marketing, you would actually recover 9,000 in extraincome. In the following year, you would then start tomake a real return on your investment. Do remember,though, that plans do not always work, and you mightcommit to expenditure without generating the income to go with it.

Planning your spendingYour budget established, you are then faced with how tospend it. The section on media discusses the optionsavailable but many small businesses are typically facedwith a real choice of two or three options for example,direct mail, local press adverts or directories.

Without professional help from a direct marketingagency or consultant, neither of whom would have all of the answers anyway, this becomes a matter ofguesswork. You need to balance the costs againstprojected response, and rates of conversion to newbusiness, plus the profit you expect to make out of new customers.

It is difficult to give specimen costings because thecosts of media like local radio, TV, press, directories varysignificantly. It is, however, relatively simple to find outcosts, coverage and estimated response rates, and mostlocal media will provide a service for creating andproducing everything from radio scripts to press adverts,or refer you to other companies who can help.


Budgets & Costings

06 Budgets are an important question for small businesses because many simply create a mailer or insert, door drop or leafletwithout a clear idea of how it fits into an overall strategy or plan. It is still, however, worth asking some basic questionsbecause it gives a clearer idea of the total marketing budget available to achieve goals that have been established. How muchdo you want to spend, for example? What income and profit return do you need to achieve from that spend? When will theinvestment start to provide returns? Asking questions like this not only adds reason to your planning, it can actually help youin your future plans.

Whatever the budget, good quality marketing isachieved by applying the most important measure of all:common sense. Low cost should not mean low quality.A well-written letter will be more cost effective than abadly produced leaflet. If you cannot afford to dosomething properly, then avoid doing it rather than doing it badly.

The important element is to ensure that what you canafford to buy ends up addressing the audience you wantto talk to. You might decide, for example, that local radiois the right medium for you because it has a highbusiness commuting audience for two hours a day.These time slots, however, are typically the mostexpensive, so you might be tempted or persuaded touse day-time or night-time slots instead. While they will be cheaper, the people you want to reach may notbe listening.

Direct mail is a little easier to cost, because thevariations are more in what you decide to do rather than where you live, the time of day, week or year.Assuming that you rent a list of the people you want toreach, rather than use your own database, which iscovered later, you might be looking at the following kindof costing:

List rental 5,000 @ 130 per thousand 650

Output and delivery of the list 50

5,000 2 colour letterheads, including artwork 175

5,000 DL (single sheet folded in 3), 4 colour 1,000brochures incl. design/artwork, reply device

5,000 window envelopes, overprinted with 220a message and your logo

5,000 reply envelopes 130

Laser printing of 5,000 letters, plus folding, 500enclosing and mailing

Total cost 2,725

Plus postage, assuming 5,000 @ 20p 1,000

Overall total cost 3,725which is equivalent to: 74.5p per pack

Remember this is an outline example only, not adefinitive costing. There are huge variations in designand print costs, and you need to consider in detail howpeople will respond to you. You can, of course, dosmaller quantities, but usually the unit cost will be higher.


07

Whatever the budget, good quality marketing is achieved by applying the mostimportant measure of all:

common sense

Developing and maintaining the right image for yourbusiness does not have to be complicated or expensive.What it does require is thought and honesty. Thoughtthat ensures your image is simple, easy to understandand consistent across everything you do. Honesty torecognise that what you promise is what you canreasonably deliver in the eyes of the customer.

This is what will help you develop a brand for yourcompany. There are many definitions of the keycomponents of a brand, but the following should enableyou to cover all the important areas:

Your vision How do you want your customers to feel about you? As authoritative and established, for example? Or as contemporary and cutting edge? The first would lend itself to a traditional image, while a contemporary image would be more appropriate for the second. It is important to avoid sending out mixed messages.

Your positionHow do you want to be perceived in the marketplace compared to your competitors? This might include price, product performance, innovation, service and support, all of which would position you differently.

Your propositionThis is a combination of your vision and your position that sums up in a simple statement what you offer to your customers, what you will deliver, and how they will benefit.

Having taken the time and effort to work through this todevelop a clear brand identity, you should find it mucheasier to assess the different communications you sendout, and the elements within those communications. Thekey is to look at the words, the images, the headlinesand the tone of voice and ask if they support andreinforce the image that you want to communicate. Ifthey do, you are creating the right image and buildingyour brand. If not, then you now have a clear frameworkto help you improve.


Design & Image

08 However small your business, however niche your marketplace, image really does matter, particularly in direct marketing.When potential customers read your brochure or visit your website, you will not be there to make sure they get the rightmessage. Even if your company image is a direct reflection of your own personality, you need to be sure that your personalitycomes across in every item, at every point of contact.

The key is to look at the words, the images, the headlines and the

tone of voice and ask if they support and reinforce the image that you want

to communicate.

Probably the most important point to make is that youare a buyer as well as a seller, so think about thecommunications you receive and what makes yourespond to some and ignore others.

Does it stand out from the crowd, for example?Magazines contain ads on every other page and youprobably get 40-50 items through the post every week.So what will make someone stop for that extra second and consider what you are saying rather thanyour competitor?

Once you do attract attention, there are only a fewseconds to make your audience want to find out more.So let them see instantly what is in it for them by leadingwith a benefit they can relate to.

Finally, tell your audience what you want them to do and make it as easy as possible for them to respond byproviding a number of options. Whether by phone, bywriting in or by accessing your website, everyone hastheir own preferred route.

The creative briefHowever well you know your product, you may find ituseful to have a structure that focuses on what you want to achieve and what you want to say, especially if you are using an external designer or copywriter. Thefollowing framework is a simple and flexible creative brief:

RequirementWhat are you producing? Mailing, press ad, radio ad etc.

Communication Goals What do you want to achieve? The launch of a new product? Visitor traffic for an exhibition? Direct sales?

Target Audience Existing customers? Prospects? How well do they know you?

Proposition What is the single most important thing you are promising to do for them? This should always be a benefit to the customer, not a feature of the product.

Key Supporting MessagesWhat are the other benefits? These can relate to the product/service, or they could be an offer such as a chance to win something.

Desired Response What do you want them to actually do? How do you want them to do it?

Practical ConsiderationsWhat are the specifications for the size of a print advertisement/the file size of an Internet ad/the dimensions of a mailing pack.

Responding to the briefWhether you create your own ad or mail-piece, or employa designer or copywriter to produce the work for you, theresult should be compared to the creative brief to ensurethat it delivers on every point.

In terms of the actual creative route chosen, business-to-business direct marketing usually assumes that:

Business decisions are wholly rational, so the proposition focuses exclusively on appealing to the head of marketing and/or the accounts department.

Business is serious, so communications must also be serious and conservative.

Whilst both these assumptions are reasonable, you wouldbe wise to treat them with care. Firstly consider this: doyou stop being an individual when you walk into theoffice? Have you ever bought something for your companybased as much on what you like or trust, as on whether itwas the cheapest or most functional? Secondly, if everyonefollows the same rules, then everything will end up lookingsimilar, and nothing will stand out from the crowd.


Creativity

09There are many excellent books written to help you develop copy and design that will both build your brand and achieve abetter response for your marketing efforts. Now, however, is the time to start considering creativity. Particularly when thegolden rule is to put yourself in the position of your potential customers and think about how they will look at your marketing.

. . .what will make someone stop for that extra second and consider

what you are saying rather than your competitor?

Direct MailTraditionally the core medium for business-to-businessdirect marketing, direct mail has a number of keystrengths:

The ability to target key decision makers by name and personalise communications to them.

Creative flexibility, with print and production technologies offering far more possibilities than a simple standard A4 or A5 pack.

High recall for pieces that are well produced, and a tendency to keep items of interest for later consideration.

The room to explain complex propositions, or guide readers through a wide range of available options.

The potential to achieve some of the highest response rates.

There are also, however, a number of key issues to consider:

The quality of data. On average, 20-25% of managers in larger companies leave or change roles every year, so unless you can be confident that your lists are up-to-date, you could be wasting a quarter of your budget.

The decision-making process. If your product or service is of particular value to accounts departments, it does not necessarily mean the financial director will be involved in the purchasing decision. The larger the company, the greater the chance the decision will be made by a middle or even junior manager. So do you know who they are?

Head office personnel. While many business lists focus on head office personnel, the individuals listed will not necessarily be involved in most operational decisions, and the operating companies may be in a completely different location.

PressDepending upon the nature of your product or service,there are three types of press to consider:

Consumer Even for business-to-business audiences, local and regional newspapers may be a more cost-effective route.

BusinessMost areas have local business magazines or newspapers, often produced by local newspapers as a supplement, or created by local business organisations such as Chambers of Commerce or Business Links.

Specialist trade and industry sectorThis is probably the most popular route for business-to-business advertising.


Media Options

10 One of the biggest decisions to make and often one that comes before budgets or design are even considered is themedia you choose to communicate to potential customers. Whether direct mail or the Internet, each medium has strengthsand weaknesses, attractions and pitfalls. Remember, though, that the choice is not either/or. You will often find that acombination of media employed at the same time will produce a better result than using each medium on its own.

The biggest strength of press advertising, particularly inspecialist sectors, is that the leading publications shouldenable you to reach a higher proportion of yourmarketplace than any other medium. There are, however,several questions to consider:

What is the circulation?This is important, particularly for trade and industry publications, and you should also find out whatproportion of your core market it reaches.

What is the quality of the readership?Even though readership may be high, try and establish if you will be talking to the right people:If the publication belongs to a trade or professionalbody, especially one that provides qualifications, ahigh proportion of the readership may be students.What proportion of the readership is paid-for andwhat proportion is free or controlled circulation?Most reputable magazines should also be able togive you a fairly detailed profile of their readership tohelp you make your planning decision.

How much advertising does the publication typically carry?In most markets, there are often one or twopublications that are recognised as must-read, so anyone who wants to reach this audience will choose these. The net result is likely to be so much advertising per issue that it is extremely difficult to stand out from the crowd. This can be a particular problem if you have many competitors offering a similar product or service.

What is the cost?Whilst local press can be good value, leading trade publications can be more expensive in terms of cost per thousand readers. You need to work through the numbers carefully. As a general rule, you can expect a significantly lower response than through direct mail.

Is there room to get your message across?If your message and/or offer is clearly understood, and you want readers to do something very simple such as request a brochure, press can work well. But if you need to try and explain what you do, or are trying to get them to buy something directly, then think carefully before using press. If you still want to try, do a very limited test to keep financial risk to a minimum.

What is the ideal placement?Look closely at several issues of any publication you are considering to get a feel for where you would like your ad to appear. Most divide the available space into display and classified. The latter is cheaper, and can be attractive if this section is well laid out, sensibly divided according to subject and your service fits clearly into one of these subject areas. Display is more expensive, especially if you are looking at the cover or inside cover. A good idea is to talk to the publication and see if they are planning any editorial features that relate to what you do. Placing your ad in or alongside such a feature should not incur a significant premium, and should help improve response.


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InsertsIn theory, inserts represent the best of both worlds, especially for business-to-business marketing. They give you the creative flexibility of direct mail, and enable you to communicate far more information than an advertisement. Plus you gain the high level oftargeting and market penetration that are offered by the leading publications. However, it will probably come as no surprise to hear that achieving success is rarely so simple.

The same issues about understanding publications andthe real quality of their readership apply to insertplanning as they do for press advertising. Other issuesalso arise because the cost of insert advertising issignificantly higher than press advertising.

How many inserts will the publisher take for each issue?If you are one of 3 or 4, then there is a good chance you will get noticed. But if the reader finds 13 or 14,what are the odds of them taking the time to sift through this many?

If a high proportion of readers are unlikely to be core prospects, a high proportion of the money you spend producing the insert will be wasted.

Are there alternatives to the traditional loose insert? It iswell worth talking to the publisher because even smallermagazines are increasingly offering opportunities thatincrease your chance of getting noticed. Simply havingyour insert bound into the publication is an option thatsbeen around for a long time, but other ideas you couldconsider include cover mounting a CD, producing aleaflet that wraps around the magazine, etc.

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TelemarketingIt is likely that you are already using telemarketing, possibly every day, even if you do not think of it in such a formal way. In fact, there are probably very fewbusiness-to-business sales that are made withoutseveral telephone calls to the prospective customer. Inmore structured direct marketing programmes, thetelephone can be employed in a variety of ways.

Database building and lead generationWe have already identified how difficult it can be to getlists that target the right decision-maker. Usingtelemarketing to build your own list may be the only real solution.

Direct mail follow-upResearch consistently shows that business people willkeep a mailing that might be of interest on file, ratherthan respond to it immediately. A telephone follow-upcan build on that initial interest before the brochure getstoo deeply buried in their bottom drawer.

Whether you keep this work in-house or use atelemarketing bureau obviously depends on the level ofresource you have, and the size of your target market.However, as either of the above could involve contactinga few thousand individuals, outsourcing the task willmake a major difference to how quickly and thoroughlyyou can complete the project.

DirectoriesMost industries have one or two directories that are established reference sources and a whos who of thesector. As the cost of basic entries in these is generallyquite low, it is tempting to simply keep renewing an entryyear after year. As with any direct marketing however, werecommend that you track all responses that comethrough your directory entries so that you can measuretheir true cost-effectiveness.

Television and RadioWith the cost of television being prohibitive for mostsmaller companies, broadcast media are not normallyregarded as core media for business-to-business directmarketing. However, depending upon what you do, itmay be worth investigating local radio opportunitiesfurther. The rationale is similar to that for local press, butin the case of radio you may also find there are certainprogrammes that have a strong business audience.

Door-to-door distributionDoor-to-door is well worth considering, if only for its lowcost advantages, but you need to consider if consumer-style leafleting of offices is practical or will generate adecent return for your business. There is also theconsideration of whether such an execution creates anappropriate brand image, but it can work well for verylocalised opportunities. Companies whose servicescross-over between the consumer and businessmarkets, or who are trying to market to employees in thework place, could also find value here.


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The InternetWhile the Internet is obviously the newest mediumavailable for business-to-business direct marketing, it isalready being used to generate considerable revenue.There are three main ways to generate responses:

Creating your own website

Sending e-mails

Using other websites

Creating your own websiteHowever small you are, there are three main reasons tocreate your own website:

Many of your competitors will have their own, so you will be at a disadvantage without one.

Most potential customers now expect to be able to view a website, just as they expect you to be able to send them a brochure.

Used sensibly, the Internet can be an extremely responsive and cost-effective channel.

It offers an easy, fast and cost-effective way for potential customers to respond.

As with every medium, these advantages are balancedby a number of considerations. Particularly since Internetusers are now more experienced and their expectationsof your website will be much higher than even a yearago. So if you are planning a website, or have onealready, ask yourself the following:

Can users immediately see, on every single page, howto contact you?

If they try, how much information are you asking for?

Is it so much that it might put them off responding,especially if they do not know you?

Do different customers have different requirements foryour product or service? If so, how easy is it for eachuser to see that it meets their individual needs?

Can they jump about between different bits ofinformation, or does your site look and act just like your brochure?

The second point is one of the most difficult to address.In reality, you do not need to ask someone for more thantheir e-mail address in order to send them something. Inpractice, the less information you require the higher thelikely number of responses. However, this needs to bebalanced against the quality of those responses.Especially if you are giving visitors the opportunity torequest something physical such as a catalogue, youmay want to deliberately make responding moredemanding to cut down on those who are potentiallywasting both your time and your money.


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Sending e-mailsUsed appropriately, sending e-mails can not onlygenerate extremely high response levels, but do so far more cheaply than any other media. As alwayshowever, there are some key issues and guidelines you should consider:

For personal communications between you and your customers, e-mail can work very well.

As a prospecting tool however, not only do you risk being associated with spam, but under new legislation you may eventually run the risk of breaking the law if you do not have explicit permission from individuals to e-mail them.

Creatively, simple graphical e-mails are likely to give you a better response than text-only ones. If you do not want to set up a system to do these yourself, the DMA website has a list of suppliers who offer e-mail services.

E-mail newsletters (published by other companies but going to your target audience) where you can buy a short ad space to promote yourself, can be cost-effective too.


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Using other websitesIt is not just your own website that can generatebusiness for you from the Internet, but the websites ofother companies too. In this respect, there are threeareas to consider:

Advertising

Affiliate and Affinity Programmes

Search Engines

AdvertisingAs with any direct response channel, the key to Internetadvertising is targeting. If you work in a specialist sector,there are probably key sites that most of your targetmarket visit and use. If your marketplace is muchbroader, Internet directories or buying guides for localbusinesses are worth considering instead.

Once you do find an appropriate site to advertise on,look carefully at the site plan. Are there specific sectionsthat fit more closely with your product or service? Ingeneral, the more relevant your offer is to the content ofthe page where your ad appears, the better yourresponse should be.

If you do decide to test the water, talk to the site ownerabout what types of advertising formats they support.Do not automatically presume this means producing abanner and if you do produce a banner, think of waysto make it more engaging and interactive than simply astatic headline.

How site owners charge for advertising remains acontentious issue. There are some who are prepared tocharge on a cost-per-click basis, so you only pay for theresponses you actually get. However, these are still veryrare and the norm remains cost-per-page impression.This means that if one person sees your ad twenty times whilst browsing a site, you pay for each of thosetwenty views.

This can make Internet advertising potentially expensive,so it is essential to ensure that you can properlymeasure its effectiveness. Firstly, most site ownersshould be able to provide detailed reporting on thenumber of times a visitor has clicked on your ad, as wellas which part of the site they were on at the time.Secondly, think about where on your site the ad takesthem. If it is just your Home Page, you may find itdifficult to track how these respondents behave on yoursite. Consider setting up a unique entry page for them.Maybe offer them a chance to win something in returnfor leaving their e-mail address so that you have theopportunity to follow up at a later date.

Affiliate and Affinity ProgrammesBeyond advertising, affiliate or affinity programmes are aform of networking over the Internet. At their simplest,affinity programmes involve you agreeing to provide alink from your site to other sites, in return for them doingthe same for you. Assuming they are also sites that yourpotential customers might visit, then in theory its a win-win situation.

Affiliate programmes are more formal and involve oneparty paying the other for sales made as a result ofreferrals from their site.

In either case, an indirect benefit of such programmes isthat having lots of links between your site and othersites improves your ranking with many of the key searchengines on the Internet.


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17Search EnginesProbably the most cost-effective way of attractingprospects to your site is to get a good position on aleading search engine such as www.yahoo.co.uk orwww.lycos.com. However, with a typical search queryreturning thousands of sites, and the average persononly prepared to look at the first twenty or thirty listed,this is a big challenge.

Web design companies will tell you that there are manydifferent tactics to improve your success rate, calledSearch Engine Optimisation, but there are two basicthings you can and should do:

Make sure that your Home Page in particular has a good selection of the key words and phrases that someone might use to look for your product or service

Work out a comprehensive list of these, and tell whoever builds your Web pages to put these in the Metadata section (information about the page that users do not see but which search engines will read)

Integrate, integrate, integrateFinally, whilst we have looked at the many differentmedia of business-to-business direct marketing,remember that they should not be considered inisolation. Using two or more together, such as adding atelemarketing follow-up to a direct mail campaign, canincrease your rate of success considerably. This alsoextends to adding a non-direct channel to a directmarketing channel.

Many business-to-business companies, for example, useexhibitions and events as a core part of their marketingstrategy. Direct marketing can play a vital role aroundthese events to ensure you maximise what can be asubstantial investment.

You could communicate with existing prospects andclients in advance of the event to get them to come toyour stand. Having a website can also be a great assetas you can get them to respond via e-mail for advancedetails, register their interest or see a map showingwhere your stand is.

You could also use the event to data capture details onas many visitors as possible. Everyone is familiar withusing prize draws to get visitors to leave their businesscards, but do you immediately input all the cards tocreate a contact database as soon as the event isfinished? And then follow up in a timely fashion? If not,you are losing many opportunities for added business.

These are just examples, but hopefully you get thepicture that business-to-business direct marketinggives you the opportunity to mix and match severalchannels to find the ones that work for your company.

Collecting dataThe simplest way to begin a database project is tocreate a Christmas Card list for existing customers. Thismay seem strange, but it can help to concentrate theminds of everyone, and consolidate the customer datathat already exists in many different files, cupboards and diaries.

Lets say, for example, that you have had a good yearand are prepared to commit a budget for cards andpresents but that not every customer should receivethe same card or present. If everyone in your companycreates a spreadsheet of their contacts and assignseach contact a tag to show how important the contactis, you will have achieved two things immediately:

Everyone will learn about contributing data to the company database.

The list of customers will be comprehensive because it is in the interest of everyone to get it right.

Enhancing dataThe next step is to decide which card and gift eachcontact should receive a decision which can (andperhaps should) be based on the value of the contact toyour company. To ascertain this, you can add accountinformation to each customer record, such as:

The turnover you have with that company.

The margin you make on that companys billing.

Whether they are good payers.

With this information added to the database becauseyou have already created one you have an objectiveassessment of the importance of each customer, uponwhich you can define what card and gift they receive.

Using technologyThe biggest advantage for small businesses of building a database is that off-the-shelf technology exists to help you. Applications like Microsoft Access, forexample, are fairly easy to learn and there are manybooks which give those unfamiliar with the software anexcellent start. The other route is to call in a consultantto help you build your database, but always make surethey tell you what they are doing, and put down onpaper what they have done.

In either case, you should write as detailed a brief aspossible, covering the following:

The data you want to collectThis will typically include name and address details, together with information that is pertinent to your product or service the potential yearly spend in your specialist area, for example. You will also want to include fields to track your direct marketing activity to show when and how each customer has been contacted.


Databases & Lists

18 One of the keys to success in business-to-business direct marketing is building your own database to increase your revenues. Which is easy to say, but where do you start? Provided you know what you are going to do with the databaseonce you build it, it is more straightforward than you might imagine. Especially when you realise that if you update it withresponses to each direct marketing exercise you run, it will become a tool that drives your business forward.

Where the data will come fromStart looking and you might be surprised at the data your company already holds in different places. Everything from accounting information to sales team records, business cards to your Outlook address book, sales leads from exhibitions to prospect lists compiled from directories and telesales activity.

How the database will be updatedEvery time data is keyed into a database presents an opportunity for error, so try to ensure that any data is only ever entered once, but is available to different users.

How data will be manipulatedThere is no point having a database if its data cannot be used and actioned upon. Users should therefore be presented with screens and functions which work intuitively for them. In other words, make sure the developer is aware of what users routinely perform as part of their job so that they do not have to refer to a manual or Help screens.

The data you need immediately and what you are likely to need over a two year period this is important because your database should be working for you, automating as many tasks as possible. While database applications do not have to be developed to do everything you want from day one, they do need to be flexible enough to handle new tasks without having to start again.

The development period, with agreed time objectivesThis is for your own peace of mind as much as anything, so that you know exactly when your database will be up and running and which functions it will be able to perform.

Database Checklist Prioritise your objectives and be open-minded

about changing them.

Find all the data sources in your company and consolidate them.

Dont be too ambitious about getting all the functionality in place on day one. Your staff may well come up with good ideas about improving it.

Make it easy for users to do what they want, rather than what the developer thinks they should want.

Decide early on whether you want to do the job in-house or outsource it. If you outsource it, make sure the developer understands and is properly briefed about all aspects of your business.

Make sure someone senior in your company is responsible for maintaining and adding functionality to the database. The country is littered with databases which do nothing because someone left the company or became too busy to maintain them.

Finally, give a senior person responsibility for ensuring you comply with the Data Protection Act, and that you are properly registered to hold and use the data you have.


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The biggest advantage for small businesses of building a database is that

off-the-shelf technologyexists to help you.

The first thing to work out is how many names you aregoing to need to achieve your objectives. Onlyexperience will tell you what response levels you aregoing to get, but you are likely to need a few thousandnames rather a few hundred to gain the responses tojustify the effort.

You should expect to pay 90+ per thousand for fairlybasic lists and from 200 to 400 per thousand forleased or bought data. If you are offered lists at a lowerprice, it is a case of caveat emptor the data is usuallypoor and may even have been obtained illegally.

To give you some idea of how you would use such lists,the following are five scenarios that are typical ofbusiness-to-business direct marketing:

Buying data to match your existing client base for long-term prospecting by mail or phoneHere, you will need to profile your existing customer base so that you can match your data with the selection criteria available from the lists you are looking at.

Such lists should allow you to target very accurately, perhaps by company size and location, industry type, purchasing decision-maker and by other special criteria (eg, computer operating system if you are

selling specialised software), and will usually come from compiled business databases, magazine circulations and exhibition organisers.

Rented lists for a new product launch, or selling direct by mailIn this scenario, you should be looking for lists with a high proportion of mail order buyers. You may not be able to get quite such an accurate match with your own target market, but usually the propensity of these targets to buy via the mail will outweigh the wastage.

Renting prospect lists to drive people to yourexhibition standFor exhibition and seminar promotions, it is perhaps no surprise that you should seek lists of people who have a track record of going to other exhibitions and seminars. Remember, though, that if you do have a stand at an exhibition, there will be a list available of pre-registered attendees. You may get a good rate for the file and you should consider a two-time rental so that you can reach them before and after the show.

Supporting a telesales drive to get appointments for sales peopleAccuracy and recency in the quality of the data is

key here. Even if you are handling the telesales in-house, failed phone calls because the number is wrong or the contact no longer exists will not help your costs.

The best lists for this purpose are recently telephone-compiled files or publishers lists where the subscriber has to fill in a detailed form in order to get the publication. Try to negotiate a one-time call deal if you can, so that as soon as a contact agrees to an appointment or wants some literature, the data for this prospect becomes yours.

Driving traffic to your website via e-mailWith the Internet now coming of age, this kind of activity is becoming more popular. The market for these lists is still fairly immature, however, and it is unlikely that the list owner will let you handle the mailing yourself. The files are also expensive 300+ per thousand is not uncommon, although this should improve over time.

For this kind of spend, try to get the owner to guarantee personal e-mail addresses (i.e. not sales@) and look for lists which are based on newsletter subscriptions and online registration for trade shows.


Renting and Leasing Lists

20 While your database will allow you to track your current customers and prospects, you will also want to contact otherpotential customers. Not just to replace the 20% or so of your prospect database who will move on, change jobs or retireeach year, but also to grow your business. For this, you will need to rent or lease a list of individuals with a similar profile toyour current customers who you suspect will also be interested in your product or service.

SummaryDecide whether you are going to do all the work yourself or get a List Broker to do it. Using a List Broker will not cost you extra because they get paid by the List Owners. If you are going to do the work yourself, judge each list according to these criteria:

When, how and for what purpose was the list compiled?

How and how often is the list updated?

Do the selections offered reasonably match your target market?

What types of rental/lease/purchase deals are on offer?

Can you get a lease with updates, for example?

Is the list owner a member of a properly accredited body (DMA, Periodical Publishers Association etc.)?

Does an accredited body audit the data?

The DMA has recently launched a Business List Audit Scheme. If you are going to use a broker, make sure that:

You know who their clients are.

You find out how long they have been working with them.

You write a clear and detailed brief so that their pre-selection process means that you are getting the best-targeted lists.

You request a proposal with recommendations, and are not given data cards for different lists where you still have to make all the decisions.

The DMA website holds more details about member brokers and tips on choosing and using lists, together with sections detailing lists available from DMA members and list owners, highlighting those lists that have passed through the DMA Business List Audit process.


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Whole books have been written about testing, many ofwhich are available from the DMA bookshop, the basicprinciples are as follows:

The reason for testingDirect marketing is very measurable, but it is not an exact science. The purpose of testing is to see which component parts might work better through change. Indeed, the most successful people in direct marketing never stop testing. They are always striving to improve their results, and know that what works today will not work forever.

What to testThis depends on the medium you choose, but the opportunities are almost endless. When using advertising, for example, you could try different sized adverts, different positions, different days, different offers and different publications, all of which will vary the result in some way. For direct mail, on the other hand, try testing different lists, different offers, different words, different items in the mailing pack, and different mailing times.

The practicalitiesThe smaller you are, the harder it is to test different things. Mailing 800,000 businesses with a control pack (the established one that has achieved the best result in the past), and a further 200,000 with a test pack (the all-new approach with a different offer or creative treatment) to find out which gains the best response across a whole selection of lists is one thing. If you only mail 1,000 people a month, however, or are unsure which offer to make, try half and half and carry on with the most successful. It may not be statistically valid, but common sense plays a part.


Testing

22One of the biggest advantages of direct marketing in general is that most of the channels can be tested before committing toa full campaign. So different offers, media, approaches and lists can be tried to discover the best avenue for your particularproduct or service. Even with small budgets, which do not allow different elements of, say, a direct mail pack to be testedbefore a campaign rolls out, the whole campaign is then a test. So on the next direct mail pack, something different can betested and the results then compared. All of which creates a body of knowledge within your company that builds over time tomake your direct marketing more and more successful.

Measuring test resultsWhen comparing the results of, say, two mailings to the same kind of audience, the most important part is to be able to measure any differences, and isolate what has caused the difference. If you change four things at the same time, you will be happy if the results are better, but if you do not know which of the four things caused the improvement, you have missed an opportunity.

Adapting plansThere is no point in testing unless you are prepared to learn from the results and change what you do on the larger scale. Even large companies are sometimes guilty of small tests that they could not or would not continue on a large scale. So always ask if this works better, will I use it? If the answer is no, test something else instead.


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. . . the most successful people in direct marketingnever stop testing . . .

The DMAAs part of the DMAs ongoing commitment to raisingindustry standards and promoting consumer safeguards,the DMA issues Best Practice Guidelines, coveringspecific areas of direct marketing.

The DM Code of Practice sets standards of ethicalconduct and best practice and is administered andmonitored by the independent Direct MarketingAuthority. The DM Code of Practice (3rd Edition) hasalways and continues to cover all forms of directmarketing.

For a full list of DMA guidelines, contact the DMA directby telephone or view its website where you candownload copies of the documents.

ASAThe Advertising Standards Authority is the independent,self-regulatory body for non-broadcast advertisements in the UK. It administers the British Codes of Advertising and Sales Promotion and Direct Marketingto ensure that ads are legal, decent, honest and truthful.A copy of the codes is available via its website or youcan contact the ASA directly.

The CAP CodeThe Committee of Advertising Practice (CAP) is the self-regulatory body that devises and enforces the CAPCode. CAP members include organisations thatrepresent the advertising, sales promotion and mediabusinesses. For more information contact the ASA.

Data ProtectionVarious data protection regulations exists for companieswho are using personal information, detailing what they are allowed to do, their obligations, and the rightsof consumers.

The Data Protection Act is administered by theInformation Commissioner, an independent officer whoreports directly to Parliament. In essence, the Act isconcerned with personal information, which isautomatically processed. It works in two ways, givingindividuals certain rights whilst requiring those whorecord and use personal information on computer to beopen about that use and to follow sound and properpractices. Contact the Information Commissioner formore information.

Consumer ProtectionThe DMAs Preference Services enable consumers toregister their wish to opt out of receiving unsolicitedmessages by e-mail, mail, telephone or fax.Organisations are obliged either by law or by Codes ofPractice to ensure that consumer wishes are adhered to.For more information, contact the DMA.


Compliance & Best Practice

24 Business-to-business direct marketing is growing from strength to strength. More companies are using it and profiting fromusing it properly. In light of this, many organisations now promote and encourage best practice. For companies who employbest practice, it helps in the planning of effective direct marketing campaigns. For customers, it protects their interests too.That said, the following details all the things you should be aware of when conducting your own direct marketing campaign.The addresses, telephone numbers and websites for the organisations are listed overleaf unless otherwise stated.

Business-to-Business Suppression FileThe Business-to-Business Suppression file provides thewidest coverage of the UK business market and givesunsurpassed levels of accuracy.

The Suppression file is an effective way of helping you tackle the real problem of 5.7 million company and individual detail changes every year. The file tracks all UK company changes. Contact the DMA for more information.

E-Commerce DirectiveThe objective of the E-Commerce Directive is to ensurethat information society services benefit from theinternal-market principles of free movement of servicesand the freedom of establishment. In particular, itconcerns the principle that their provision cross-borderthroughout the European Community cannot berestricted. For more information contact the DTI.

Electronic Signatures 1999This is a legal framework developed to guarantee thesecurity of electronic signatures. For more information,take a look at the European Union website:http://europa.eu.int.

VAT and services by electronic meansThe objective of a comprehensive e-commerce taxationpolicy framework is twofold: to avoid either doubletaxation or non-taxation; and to avoid disparity treatmentof offline versus online transactions. For information onthe implications of this, visit the European Union site:http://europa.eu.int.

Copyright DirectiveThis is the European directive on Internet copyright rules,which sets out to protect copyright holders while allowingprivate copying of some audio and video material. Formore information, visit the European Union site:http://europa.eu.int.

AEB Web Security GuidelinesThese guidelines express the fundamental concepts ofweb security in a non-technical language. For moreinformation, contact the DMA.


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The databaseIt is one thing to set up and manage a database throughan initial period. It is another to maintain it over a periodof time. So beware of falling into the trap of using afriend, only to find they are not available when you needthem and nobody else knows how it works.

Planning & implementationThis is probably the easy part of any business-to-business direct marketing campaign, as it is anidentifiable part of the planning process where you cansize and time the resource requirement.

Handling responsesOnce you have given potential customers various waysof responding, you then have to deal with that response,whether by capturing data, sending out brochures,conducting phone calls or making sales presentations.Time is often the critical element here. If you cannot dealwith an enquiry quickly, how can you provide the serviceany customer would naturally demand?

New customersGaining new customers is good news on the one hand.On the other, it will create more work. Can you creditcheck all of them, for example? Can you handle theincrease in orders and cope with the additional volumesgoing through your business? What about stock,deliveries, packing and paperwork? Most importantly ofall, can you do all of this while at the same time givingyour best customers your existing ones the samehigh level of service?

FlexibilityNobody can be sure what responses they will get fromany marketing activity, even seasoned users. Whileoutside activity could have a major impact, you will bereluctant to commit to extra resources just in case. Butdo be prepared particularly if you use a medium suchas radio or press that can deliver a peak of responsevery quickly, compared to direct mail that can be moreeasily spread.


Resources

26 Business-to-business direct marketing does not just require financial resources, but human resources too. Staff are needed toimplement, manage and monitor direct marketing campaigns, develop and maintain databases, and of course handle theadditional business generated. That said, proper planning will give you some idea of the extra resources required and when,and also what level of expertise is required. Most potential suppliers will give you advice and help, to decide what to do, butthere are some key areas to consider.

ADVERTISING ASSOCIATIONAbford House15 Wilton RoadLondonSW1V 1NJE: [email protected]: www.adassoc.org.ukT: 0208 7828 2771F: 020 7931 0376

ADVERTISING STANDARDS AUTHORITY (ASA) (FOR VOLUNTARY CODES, AND TO CHECK ADVERTISING)Brook House2-16 Torrington PlaceLondonWC1E 7HNE: [email protected]: www.asa.org.ukT: 020 7580 5555F: 020 7631 3051

BRITISH MARKET RESEARCH ASSOCIATIONDevonshire House60 Goswell RoadLondonEC1M 7ADE: [email protected]: www.bmra.org.ukT: 020 7566 3636F: 020 7689 6220

CONFEDERATION OF BRITISH INDUSTRY (CBI)Centre Point 103 New Oxford streetLondonWC1A 1DUW: www.cbi.org.ukT: 020 7395 8247F: 020 7240 1578

CHARTERED INSTITUTE OF MARKETING (CIM)(FOR TRAINING)Moor HallCookhamMaidenheadBerkshireSL6 9QHE: [email protected]: www.cim.co.ukT: 01628 427 500F: 01628 427 499

THE COMMUNICATIONS ADVERTISING AND MARKETING FOUNDATION (CAM)(FOR TRAINING)Moor HallCookhamMaidenheadBerkshireSL6 9QHE: [email protected]: www.camfoundation.comT: 01628 427 180F: 01628 427 159

DEPARTMENT OF TRADE AND INDUSTRY (DTI)1 Victoria StreetLondonSW1H OETE: [email protected]: www.dti.gov.ukT: 020 7215 5000F: 020 7222 2629www.businesslink.org.uk

DIRECT MAIL INFORMATION SERVICE (DMIS)(FOR INFORMATION AND RESEARCH ON DIRECT MAIL, FOR REPORTS SUCH AS: SMEs Use and Understanding of Mail Media 2002)5 Carlisle StreetLondonW1V 6JXE: [email protected]: www.dmis.co.ukT: 020 7494 0483F: 020 7494 0455

DIRECT MARKETING ASSOCIATION (DMA)(PREFERENCE SERVICES: MAILING, TELEPHONE,FAX, EMAIL)(DMA BOOKSHOP)DMA House70 Margaret StreetLondonW1W 8SSE:[email protected]: www.dma.org.ukT: 020 7291 3300F: 020 7323 4165

FIT FOR THE FUTURE (THE NATIONAL BEST PRACTICE CAMPAIGN)Centre Point 103 New Oxford StreetLondonWC1A 1DUW: www.fitforthefuture.org.ukT: 0870 600 2513F: 020 7497 2596

INFORMATION COMMISSIONER(FOR DATA PROTECTION)Information Commissioner Wycliffe House Water Lane Wilmslow Cheshire SK9 5AFW: www.dataprotection.gov.uk Enquiry/Information Line: 01625 545 745 Notification Line: 01625 545 740 Switchboard: 01625 545 700 Fax: 01625 524 510

INSTITUTE OF DIRECT MARKETING (IDM)(FOR TRAINING)1Park RoadTeddingtonMiddlesexTW11 0ARW: www.theidm.co.ukT: 020 8977 5705F: 020 8943 2535


Further Information

27

Documents

B2B DirectMarketing Guide