Is Direct Mail Still An Effective B2B Medium?

With all the buzz regarding SEM and social media these days coupled with a bad economy, it's no wonder direct mail has been steadily declining in 2008 and 2009. Direct mail is a very expensive communication medium. The cost per contact is far more expensive than email marketing, social media or paid search. It also takes longer in most instances to see program results due to the complexity of creating and delivering these programs. Online marketing is much easier and more effective, right?

Well, it depends. SEM and social media are both great business tools to reach those actively pursuing information or business connections. But, these are not always the most successful media to reach decision makers and influencers. SEM for instance, is most effective when people become aware that they have a need for a product or service. They begin searching for solutions that fit their needs. In a B2B environment though, it’s unlikely the influencer or decision maker will conduct this research. They simply don’t have the time. There are exceptions of course; small businesses, car dealerships, etc. will have principals/owners who are researchers, influencers and decision makers because there are few other options. But for larger B2B organizations, decision makers and influencers rely on others to do the heavy research lifting.

A parallel challenge exists in social media. If you talk to anyone vigorously marketing in social media, they’ll most likely tell you it requires a significant personal investment to be successful. Establishing industry credibility and expertise takes time. Those successful contend connecting with the decision makers and influencers isn’t necessarily difficult, getting them to listen and act when online, is. The benefits are great, but so are the contributions.

Most importantly, both of these marketing channels are initiated by the individual. That is, you reach these people after they have made a decision to go online. Where SEM and social media ultimately fall short is communicating with prospects that had no intent of communicating with anyone, period.

That’s where direct mail comes in to play. Done right, direct mail — and to a lesser extent email marketing — modifies behavior in a recipient who had no clue you existed or that they needed your product or service prior to receiving your information. How? They respond because you introduced a problem they are faced with, and then described benefits or pain-points so clearly they are compelled to act because of your solution. And, you did so with little time commitment on their part.

Now, direct mail critics will say it’s great when you can get to decision makers and influencers but most of them have gatekeepers. They don’t read their mail/email, etc. All this is true but the key to a successful direct marketing campaign is realistic expectations and a solid contact strategy that revolves around list and offer.

In direct mail, everyone knows that 1% - 3% response rate is the norm. This may sound low but consider this (which is a very realistic scenario in B2B): say you have a list of 1,000 companies you are targeting and you are shooting for a 1% response rate with a $100K budget. This would yield 10 responses at $10K a piece, right? Several of these leads turn out to be lukewarm but one of them converts into a sale. Was it worth it? Yes, if the cost of the sale covered the $100K investment — which in our experience is completely viable. The response percentage is far less important that the conversion rate. Establishing appropriate expectations is critical in evaluating the success of any marketing channel.

A contact strategy around list and offer is the other critical component. Targeting the appropriate titles in a company is the first step in creating a successful contact strategy. In your approach, don’t try to avoid the gatekeepers if they exist; include them in the decision making process. You achieve this by marketing to them as well as the people they are protecting — decision makers and influencers. The second step is creating an offer specific to these titles so compelling, they feel a need to respond. Remember, you are modifying a behavior of someone who wasn’t aware they needed you moments earlier.

The third component to a solid contact strategy is messaging, which is also extremely important but subordinate to the former two. It doesn’t matter how good the messaging is, it will fail if it’s going to the wrong list. At that point, it’s nothing but a good message.

More to come in later blogs on how to create a solid contact strategy in B2B…..

Check That Bathwater for a Baby

Unless you are just now emerging from the safe room you built in anticipation of the Y2K disaster, you know that the marketing budgets at many B2B companies have been severely slashed over the last twelve months. Any dollars marketing departments have left are being scrutinized like never before. At times like these, there’s a great temptation for marketing managers to choose media with the lowest possible cost per contact. However, while low-cost media will help make departmental numbers look good, the consequences to the long term health of these companies may be quite another story.

Let me give you an example. If a B2B company depends on persuading C-level executives to create new business opportunities, it would not be a wise choice to completely replace traditional channels like direct mail and trade shows with a lower cost-per-contact medium like e-mail. In most instances, cold-call e-mail marketing is so much less effective at reaching boardroom-level executives, the cost savings are an illusion. In other words, when you go fishing for marlin with a breadcrumb, it’s simply a waste of bread. And who has bread to spare these days?

The trend right now is to choose interactive channels because of their lower relative costs. Yet, in the rush to save dollars, we sometimes forget that some businesses are not managed by people who spend all day at a computer.  Contractors, independent truckers, gym owners, and hundreds of other business people spend most of their work time away from a monitor. Here again, digital media dollars may be a huge waste. 

Not to say low cost-per-contact integrated media is ineffective. Quite the contrary. E-mail and pay-per-click (PPC) campaigns have proven remarkably effective in generating solid B2B sales leads at astonishingly reasonable costs. But it’s important to realize that these channels are not suitable at every level of an enterprise—or for every type of business. 

So if you’re feeling the pressure to reduce your costs while reporting low-cost-per-contact numbers, check that bath water before you throw it out. There could be a million dollar baby in those suds. 

Greenwashing

Organizations have been jumping on the “green” bandwagon for several years now. But how many of them have created a green marketing strategy based on sound and truthful policies? According to a December 8, 2008 article in BtoB Magazine, Green Pays, many companies are not only unsuccessful in developing and maintaining a sound green marketing strategy, they are also not completely truthful in their statements when presenting their green initiatives to the public. The article goes on to state how companies have fared by not having a sound strategy based on fact. “Greenwashing” is a topical term now used for companies who purport to be enviro-friendly but have little to back up their claims.

Having a solid corporate green strategy devised to accurately communicate a company’s contributions will become paramount in the next couple of years. However, I would suspect many B2B companies don’t even have this in their five year plan. The silver lining from a marketing perspective is that B2B can once again learn from tribulations many B2C companies have endured. To discover the importance of a green strategy done right, visit websites like http://www.greenwashingindex.com/ and http://www.treehugger.com/ where companies are graded on the accuracy of their claims. These sites have taken companies’ green efforts and turned them on its ear. We all know under most circumstances no press is better than bad. And, it certainly rings true here. It’s also getting companies in trouble with the law. In fact, Green Pays mentions:

Companies engaging in so-called “greenwashing” can become targets of more than ridicule by environmentalists. They can run afoul of the law. Two years ago, the Canadian Nuclear Association learned the dangers of inappropriate green marketing. The organization was accused by Canadian religious, public health, renewable energy and environmental groups of false advertising when it began to use ads touting nuclear power as environmentally clean, reliable and affordable.In the U.S., the same real-world lesson plays out almost daily, said Dave Young, a partner in Washington, D.C.-based law firm Goodwin Procter. “From a legal perspective, if an advertiser isn’t up to speed on federal and state regulations, they can get into trouble,” he said.”There are rules in place so advertisers have to be careful.”

Other key points of the article:
· Have your green efforts on your website and keep it current
· Keep overgeneralizations out of copy
· Keep the focus on the customers that benefit from being green
· Use third party certifications to add credibility (Energy Star Efficient)
· Use in-house legal counsel whenever possible

My advice…a message that is not genuine and relevant will most likely do more to hurt an organization that to simply stay silent until there is something relevant to say. However, don’t stay silent either. Come up with a good green marketing strategy based on relevant and accurate data and get it out to the proper channels. You’ll be rewarded for it. You can read more at:
http://www.btobonline.com/apps/pbcs.dll/article?AID=/20081208/FREE/312089936/1109/FREE

Does the public trust digital media?

Does the U.S. public trust digital media? The answer is yes and no according to a recent North American Technographics Media and Marketing OnlineSurvey  presented by Forrester Research.

As the chart below illustrates, e-mail from friends and colleagues was ranked the topmost trusted information source. The least trusted? That dubious distinction went to company blogs. In other words, as a personal medium digital communications ranked first in trust — and as a corporate medium ranked dead last. In fact, “email from people you know” at 77% was ranked 17 points higher than the second place source: consumer product ratings and reviews at 60%. (Marketers take note: viral e-mail campaigns may be a golden opportunity.)

Trust for online versus offline sources varied widely, too. Email (28%) slightly outpaced direct mail (25%) in credibility. Yet news publications in print were more trusted than their online counterparts. A scan of the entire list shows no clear pattern favoring either online or offline sources. However, online sources did bring up the rear of the credibility spectrum.  

Curiously, blogs did not garner much credibility at all. Personal blogs at 18% and corporate blogs at 16% both trailed e-mail from a company or brand at 28%. This is a measure of good news for marketers. Corporate bloggers, however, may want to rethink their strategies. One possible reason for the lack of trust in corporate blogs: many are written by overzealous employees who think the world revolves around their product or service. A bit more objectivity and content with news value would help many corporate blogs.  

Looking over this survey, it’s clear there’s no magic bullet to win over public trust. Instead, savvy marketers will rely on an integrated communications strategy to play to the strength of each medium.

David L. Broughton

Partner

BRC Marketing

Integrated marketing - the new bread in butter in B2B

A slice of dry toast is not very appetizing. The same goes for a pat of butter. Ah, but put them together and both become better. That’s the essence of integrated marketing, a blend of online and offline media that’s becoming the new bread and butter of successful business-to-business marketing.

The excitement and promise of digital media is rightfully leading the way in the allocation of budget and resources among many B2B marketers. Search engine optimization, search engine marketing, analytics, webinars, e-mail and social media offer a vast new potential for marketers — while often lowering costs. All the same, marketers who put all their eggs in emerging media and neglect traditional channels do so at their own peril. Direct mail, trade publications, collateral literature and trade shows will continue to play a vital role in B2B marketing. The difference between success and failure lies in how online and offline channels are used to support each other.

Most business to business goods and services are sold through consultative selling. Ultimately, that means a face-to-face meeting followed by a long series of negotiations that culminate in a contract. Like a fork and a spoon, online and offline marketing communications must be alternately employed at the right stage of that process to serve up messages and offers that facilitate the selling process.

What’s the right mix of online and offline media? The answer depends upon the unique conditions of your B2B marketplace. A one-size-fits-all recipe will very likely produce disappointing results. The best approach is to examine each of your company’s vertical market segments and develop a unique blend of channels for each segment based on the workstyles of decision makers, influencers and users.

In the final analysis, marketing is still marketing. Creating measurable results begins with a deep knowledge of your prospects’ motivations and habits. Today’s emerging media has opened up an exciting new array of opportunities for connecting with potential customers. Find the right blend of new and traditional channels and you’ll be on your way to creating B2B marketing that’s the greatest thing since ... well, you know the rest.

Ronda Broughton
Partner
BRC Marketing

Harvard Business Review: Where Is Advertising Going?

“Advertising is now universally acknowledged to be broken, but the need for it is obvious” says Jeffery F. Rayport, author of Where Is Advertising Going?, a recent Harvard Business Review article.

So what will save advertising? “Stitials,” is Rayport’s response.

Stitials are the opposite of Interstitials—advertising that interrupts the content consumers want to experience. The 30-second TV commercial is a prime example of an interstitial. Ads that precede content on the Web are another.

Rayport cites two profitable examples of stitials in the article.

The first is the Captivate Network, an outfit that provides low-key messages for elevator passengers at upscale office buildings. According to Rayport, Captivate delivers more advertising impressions to affluent urban professionals than USA Today and CNBC combined.

Rayport’s other example is “ Google’s cash machine: search based advertising.”

The reasons for these two success stories, says Rayport, is that they “deliver messages to consumers on their terms and in the context of their lives.”

Rayport’s message has relevance for B2B marketers as well — in particular with SEM.

If you’d like to see a case history of how SEM helped a B2B company quadruple sales leads for its primary business units, get in touch.

By David Broughton

Partner, BRC Marketing

dbroughton@brcmarketing.com

Twitter: Another Second Life or the next Facebook?

Twitter seems to have reached the radar of mainstream journalism judging by Kathleen Parker’s recent article in the Washington Post, Rise of the Twitterati. Meanwhile, marketers are lurking on the sidelines to see how this latest social media phenomenon plays out. Is it another passing fancy like Second Life? Or could it be the next Facebook? At first glance, the micro blogging aspect of Twitter seems a tough nut to crack. Still, there are those who believe it holds potential.

Social media blogger Lee Odden writes:

“A variety of commercial applications for Twitter have begun popping up including political candidates posting updates from the road as has happened with Barack Obama & John Edwards. Other commercial and marketing use examples of Twitter include JetBlue promoting special offers, the BBC posting news items, Apple posts it’s own news (bypassing the media - hmmm) and online retailer Woot posting deals throughout the day.”

Given the tough economic times we’re facing, the ROI potential of micro blogging for B2B marketers is clearly somewhere in the future. But in today’s fast-evolving digital landscape, anything seems possible.

In fact, here’s my Twitter message for the day: David Broughton is following Twitter.

By David Broughton

Partner, BRC Marketing