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After a b2b data specification has been applied to the business universe, there are often more prospects than desired. In these instances it could be worth applying a business data scoring model to select the best records for your marketing.
For Limited companies the Incorporation Date is derived from Companies House.
Note: this is the date that the company was incorporated at Companies House. It may not have been trading since this date because Directors can register a business at Companies House and then not start actively trading until a later date.
Likewise a company may have been trading for a number of years, and decide to change their company name. In this case they will get a new incorporation date reflective of the company name change.
For non-Limited companies, the Year Started on the b2b data universe is captured via the data source’s call centres.
When making contact with the business, it’s the business that confirms the date they were established. So this date has nothing to do with Companies House, and is reliant on what was said during the call.
If the call centre is unable to make contact with the business, the “established date” becomes the date the business first appeared on the file. This means they are usually a new business, having not appeared on file previously.
New branches of national chains (Tesco, Barclays, Starbucks etc) are regarded as new ‘companies’ also. i.e., they are new premises. These can usually be excluded by having a high branch count however.
It should be noted that start-up companies (i.e., having been established / incorporated within the last few months) are generally very small businesses. The vast majority are sole traders seeking to expand. Many operate from home. So the concept that there are lots of start-up businesses with huge cash injections is unrealistic.
b2b data services from Responsiva…
Featured Data Variable: “Branch Count”
The “Branch Count” variable doesn’t appear on standard business data supplies, because more questions would be raised than answered. Yet it’s a very powerful selection filter. The branch count field has a numerical value, relating to the number of sites per company.
Some examples of high branch count businesses by their respective industry sector;
With perhaps the exception of the post offices (which tend to be semi-independent), these 15,000 business records represent just seven companies. And it doesn’t take a genius to work out which specific companies they are.
Taking the dispensing chemist by way of example. Having 2,672 branches means they are on every high street. Would you want to market your business to each of these at a branch level? There is virtually no branch-level autonomy, so the answer is almost certainly no.
Branch Count – Beware!
One of the shameful elements of the data industry is that (in being financially rewarded for supplying the largest possible data volume to clients), unfortunately there is an ‘incentive’ for these records to be included within your file. Personally I would regard this as short-termism, as the data quality will be massively diluted and usually lead to client dissatisfaction.
It genuinely saddens me to audit client databases sourced from another supplier where the file is heavily peppered with certain American (fast food) restaurants or ‘big four’ supermarkets. And I have no qualms in stating that their database (if diluted to an unacceptable level) is unfit for purpose. Good data suppliers should apply a duty of care in filtering out unsuitable prospects.
Whilst filtering can never be perfect, there are some basics which should be applied as standard. Unless requested otherwise, high branch count records are automatically recommended for exclusion by Responsiva.
How Is the Information Evaluated?
The branch count field is not a perfect value. It is evaluated by applying some intelligence to company name matching. And there are some anomalies. As a general rule, the likes of matching “M&S” with “Marks & Spencer” will be fine. And there is also some intelligence in segmenting company names such as “Red Lion” or “Taj Mahal”; which to the human eye will all be independent entities.
But where the branch count gets it seriously wrong is with hotels. By way of a fabricated example, matching “London Hilton Park Lane Metropol” with “Hilton Picadilly Manchester” is not realistic. So the branch count for hotels tends to be blank, and this is one sector where chains can slip through the net.
Often I am asked if the head offices of businesses are identifiable. The reality is that they aren’t; many companies use their accounting and auditing firms (or a PO Box address) by way of their Companies House registration, so matching to this file is not the right way forward. Quite simply it is not worth the risk of including every branch within your database, so the high branch count records are usually best excluded as standard.
Whilst head offices are impossible to accurately identify, they can be implied. This can work well with companies having 10 – 20 branches. The best way of achieving this is in selecting data where there is also a director level contact name at site. Most multi-premise businesses would only have managerial contact name (e.g. Branch manager) at each site.
So the records with a director level name will generally have at the very least some autonomous decision-making capability.
For the last decade and more, social media has been the marketing buzzword. But does it really work? The free elements of Twitter & Linked-in certainly have merit, but both require a dedicated daily investment of time. Whilst paid-for advertising via many different social media channels has yet to yield well for Responsiva. With the internet being so huge there are now too many platforms to strive to be noticed on, which has diluted its marketing effectiveness.
From Responsiva’s experiences, postal mailings (of 5,000 units) have consistently proven the most productive with their return since 2003. Telemarketing a close second.
The Investment (For 5,000 Posted Letters)
An investment of £1,750 with the mailing house buys the paper, printing, packing, mail-merge, envelopes, printed return address and the postage costs. All that the mailing house requires is the letter text and the business data to send it to. This equates to a cost of 35p per letter.
Postage rates decrease for larger mailing volumes, whilst the consumer posting a handful of letters can expect to pay 55p each just for the stamps. With a volume of 5,000 units the postage element of the mailing equates to just 23.7p per unit.
In addition to the investment of £1,750 there is the cost of the data element. However, data is supplied for multiple usage so can be re-used up to (realistically) twelve times. So it would be reasonable to say that the “all inclusive” costs of a 5,000 letter mailing would be around £1,850.
Return On Investment
The ROI will vary according to the message, target market and products & services being offered. But what can be reasonably anticipated is the volume of responders. For the last fourteen years in running postal mailing campaigns of this magnitude, the responses have always been between 0.8% and 1.2%. i.e., 40 – 60 responses.
This equates to an average £37 per inbound enquiry.
Good quality (telephone verified, permission based) cold email marketing will rarely yield more than one enquiry per 1,000 units. The cost of those 1,000 units will be more than £37.
Telephone marketing has value added services such as dated call-backs and opt-in email address harvesting. Those emails will be far stronger than the aforementioned cold ones. But the typical cost per day of calling will not usually generate a cost-per-lead as low as £37. If a telemarketer is costing £250 per day, seven leads would be required.
During 2007 – 2008 the cost per enquiry from ‘adwords’ campaigns was as low as £20 – £25. This escalated over the following years to exceed £50 per enquiry. Today the figure is closer to £100, though I concede that this cost per enquiry will vary according to the keywords and campaign.
So although a postal mailing of 5,000 units requires some investment, they have proven the most effective route to market from Responsiva’s experience.
B2B Marketing to the Big Fish
Do you market your company to the larger, corporate organisations? I wonder why so many small companies do this, as there are six key reasons why they should consider alternatives.
There is no denying that winning a blue chip client gives some prestige, and fully merited pride, but these qualities alone do not increase the bottom line financials. And in most cases (if not all) any corporate win would be accompanied with a non-disclosure agreement, meaning that the only person you could share your pride with would be yourself. And perhaps your spouse.
The six reasons why I would never proactively chase a corporate client in the b2b marketplace are as follows;
1. Risk Exposure
Bringing it down to simple sums, would you prefer one corporate client earning £10,000 worth of profit, or fifty SME / micro clients earning £200 profit apiece? The end number is the same, but the business model is very different. Just last month I spoke with an old colleague who was having to re-think his business plan. Riding high for two years on a single major account, the work had now dried up. Sure, he should have spent those two years planning to attract the next major account. But how many actually do that? Major accounts by their very nature usually demand all your resource, and then some. Being creatures of habit, it is so easy to slip into a comfort zone, ride that wave of plenty and without forethought of its future decline.
2. Lead Time
SME / micro businesses tend to make swift decisions. Whilst we all work in different industry sectors, the data industry is no different to any other where lead times are concerned. SME and micro businesses usually make purchasing decisions within a few days, sometimes even immediately. Corporate clients investing in a multi-million-pound database management service over three years do not decide so quickly. During past employment I witnessed such proposals take between six and eighteen months to reach a decision. Great when they do, sales people’s jobs have been lost when they don’t. And as an SME / micro business owner, I could not wait eighteen months for a decision on my next sale anyway.
Small businesses do not have a procurement department. My last experience of procurement was about ten years ago, involving a marketing data proposal for one of the UK’s major energy companies. Responsiva were up against twelve competitive proposals. Six were discarded immediately, and the b2b marketing department met to discuss the remaining six. Three of these (which included Responsiva’s) were then selected to go forward to procurement. From that point, communication with the company was not permitted until the procurement department had made their final choice. Responsiva was not selected. Some months later I called my contact in the marketing department for some feedback, and was told:
“Toby, your proposal was the best of the lot; it fully understood what we were looking to achieve, was realistic and honest in all elements of delivery, demonstrated you had the right skillsets and data sources, had a simple contract ‘opt out’, and was very reasonably priced.
However, it was the first of the three proposals to be discarded by procurement because of the size of Responsiva. You are a small business, the other two are huge companies with a global presence. So if something were to ever go wrong, we could not then justify having selected such a small business as Responsiva as our supplier on such an important initiative.”
Probably the greatest piece of feedback I have ever received, and since then have stuck to the SME / micro business target market. Only chase opportunities you can realistically win.
4. “We are BIG CHEESE”
One the greatest challenges with the corporate world is that there is a tendency to use their brand name to drive down prices and reduce your margins. Case in point, how supermarkets historically treated farmers. This is not to say that all corporates are the same, but even within the marketing data industry this same method of approach has risen its head many times. Under previous employment I turned down the custom of two well-known brands, because they demanded a significantly reduced price (far below the rate of any other client) on account of their brand name. Aside from not being a major sale opportunity, their brand could not be used by way of testimony either. Business is only good business if it is fair for both parties, and that does not mean undervaluing your service on account of a client having a known brand. The truth is that brands should be more (rather than less) caring about their suppliers, especially in today’s market where consumers have a notably significantly reduced brand loyalty.
5. Greater Competition
Even with the challenges associated with wooing corporate clients, there is no denying that we all still love to win major accounts. And that is the same for our competitors. So it follows that 80% of your competitors are chasing the 20% biggest prospective clients in the market. Markets don’t take long to become saturated, and those 20% who represent your future major accounts become exponentially harder to reach and do business with.
6. The SME / Micro Market
If major accounts make up 20% of your target marketplace, then it follows that the SME / micro business market has four times as many prospective customers. Actually it is far more extreme than this 80:20 rule; just 2% of businesses have more than 50 employees, meaning that 98% of companies are in the SME / micro category. It’s a huge market in terms of prospect numbers.
As an added bonus, less of your competitors are chasing these. They will make decisions faster, have little or no procurement, are unlikely to display brand arrogance and are also likely to pay you on time – or even in advance.
The only downside is that they generally have less finance to invest in your services.
The solution; adapt your service to the SME / micro business (offering a downsized service to suit them), and market your business to win more of them as customers.
The advice of most business coaches is to test and measuring (approximately) ten different marketing channels, whilst others recommend sticking with just the best two or three initiatives which work best.
I am always looking for new initiatives to trial for Responsiva, and in doing so measure the results rigorously. Different businesses and approaches to market will inevitably yield different results, but hopefully in sharing Responsiva’s marketing experiences you might give feedback on your own strategies and suggest any new ideas. I really welcome them.
The initiatives listed below are just those targeting new customers. Customer management, reactivation, referrals, rewards etc would open up a whole new article.
Social Media: The Free Stuff
The four big names are well recognized; Linked-in, Twitter, Facebook and YouTube. Each offers a different approach to market and all four should be explored. Put things into perspective though: to manage them effectively, in my opinion, an investment of a minimum ten minutes of your time is required daily. Do the math and that equates to a solid week’s work per year. Or a whole month’s work if you do all four. Whilst corporates can invest in teams of employees to manage their social media, the small or micro business cannot. So getting the balance right with time invested in social media is key. After dabbling in all four, I narrowed Responsiva down to just two: Linked-in and Twitter. Ten minutes per day on each keeps the accounts growing, and both have yielded (some, but not many) enquiries. Neither are the most effective route to market, but there is no cost other than small investment of time.
I am planning the creation of a few promotional videos as well this year. Not yet convinced of their value, but they can be spread across all social media channels.
Many micro businesses avoid building a website. They can be costly to set up and maintain, but remain an essential source of information for prospects to be pointed at in order to feed into the enquiry process. A high budget is not essential these days, so at the very least a holding page with some basic facts is better than none. A website is essential; it says what you do.
These are also free in terms of cost, but require the investment of time; a commodity in short supply for the single-person business such as Responsiva. Nobody can write about a company better than the business owner, so this process absorbs another thirty minutes or so each week. Business services need exposure, making written content invaluable. The most rewarding aspect is that a weekly article can be uploaded to the website and all social media platforms, so everything is connected to the aforementioned free channels and feeds into them well.
Online Advertising / Pay-per-click
Responsiva used to invest heavily in Google & Bing pay-per-click advertising. But by 2010 the cost per click had increased (and the rate of enquiries decreased) to the point where these once-lucrative campaigns were costing more than their return. Whilst I wouldn’t rule out trying these marketing channels again in 2017, it would be with some degree of trepidation and tight budgetary caution. Test & measure precautions prevail.
Alternative historic advertising channels have included online directories. And here is an amusing story which I really want to share. Responsiva used to advertise with several online directories until 2012, at which point it was considered to be a waste of money. One directory called me to ask for a renewal and explained that if I searched google for a specific search term then I would see their advert in first place. Indeed it was. So I asked what would happen to that advert if I cancelled my subscription, to which they replied the placing would be lost. “Does that mean the one in 2nd place will then become 1st, the 3rd place go to 2nd etc?” They agreed. In second place at that time was my own website, so I explained that by cancelling said subscription my own website would be promoted. They didn’t take it particularly well.
Social media (pay per click) advertising with the big four is always worth exploring. I ran a campaign throughout January 2017 with Linked-in pay-per-click. 100 clicks later and zero enquiries from this channel. Perhaps my message was wrong, or the website not engaging enough. But I did test thirty different advertising messages, and the website hasn’t changed since yielding multiple enquiries from other channels. So I got to thinking that this wasn’t a great route to market, and canned the campaign just before month-end. Trying out Twitter advertising next.
Search Engine Optimization
Wasn’t this the in-thing of the Naughties? Six historic SEO contractors have been tested. Three were good; one of them was fantastic. Two others delivered virtually nothing and the sixth I never heard from again after paying for a service. I feel some empathy for the genuine players in the SEO sector; Google can punish them heavily with an overnight update that trashes the keyword rankings they have fought so hard to deliver for you.
Perhaps the main issue with SEO is that you feel like the donkey with a carrot two feet in front of your nose. Who is to say what your competitors are investing in this activity? As a general rule the big guns win top slots by paying more. But what has been won exactly? It can take a heavy investment to gain a first placing in Google, and the finances only self-justify if the return is in balance. From personal experiences, there have been some good SEO campaigns which yielded fairly well, and were delivered by genuine professional effort. So I will dabble in this channel from time to time, but recommend a “proceed with caution” approach and always check references of SEO providers before embarking on a new supplier in this field.
Trade Press (Magazine Advertising)
Every industry has its trade press magazines. Perhaps a thing of the past in paper form, but they still exist online. In the days of employment, I used to read the likes of Precision Marketing & Marketing Week religiously, and even The Grocer was a very popular industry-related publication. Data Strategy came on the scene a little later and that was a well-refined magazine which I genuinely looked forward to reading. So I tried some advertising in two of these but the responses (and sales from those responses) did not marry up well with the investment.
Corporates can afford to advertise under the guise of ‘brand awareness’, but micro companies cannot; they need a return on investment. So it is unlikely I would ever consider trade press advertising again. Partly because I take the view that a high percentage of the readers of these magazines are suppliers (sellers) into such trades, rather than the traders themselves (buyers).
Networking Events / Business Breakfasts
I tried many of these when first starting out; some are more formally structured than others. My personal preference is towards the less-well structured, enabling you time to meet people. Whilst the early mornings lead to giving up on this concept for a few years, I re-visited them at the start of 2017 and was pleasantly surprised, so am now committed to attending one event per month. It’s enough.
Data Driven Marketing – Postal Mailings
I started Responsiva in 2003 with some door-drop letters in local business parks, offering data services. This didn’t work: no responses. So I then sourced a database of 500 targeted business prospects and wrote a mail-merged letter to them. Five responses came back. One was a time waster, four wanted a quotation, one converted to sale.
500 postal letters flowed from my home every week thereafter. The numbers were religiously accurate: (+/- 1) five responses each time. Four or five quotes and one new customer.
Nowadays I do none of this manual printing & packing, and pay no silly prices for stamps either. Batches of 5,000 – 8,000 letters are printed at a time, using the services of a mailing house and earning the postage discounts available from this larger volume.
Results remain good; 5,000 letters will get 40 – 60 responses and win 8 – 10 new customers.
The message needs to be clear: Say what you do, keep it to one page, drop the cheese and end with a simple call to action: a no-obligation freebie. The freebie is a simple concept; it’s simply to enable a live demonstration of service with no invoice being raised. A win/win.
For Responsiva, postal mailings started as the primary route to market and remain key today. Perhaps that’s due to knowledge of getting the right data to market to.
Data Driven Marketing – Email Marketing
Cold b2b email marketing has not been as successful. Unless you have previously touched a prospect from alternative channels, do they really want to receive a cold email from you? This frustrates me a little; marketing to cold business emails is perfectly legitimate (though many email platforms don’t permit it), but I take their point. The truth is that it’s a very lazy way to operate, cutting corners to hit a prospect. At least a postal letter shows you care enough (chose them specifically) to invest in the stamp. Marketing data with email addresses can be useful; such as forming the postal letter text to include “I will be emailing you on <date> to <email address> to provide you with more information”. At least then your company has introduced itself more professionally and had its first touch. I haven’t emailed cold for many years now; all prospects have had at least one touch first.
Data Driven Marketing – Telemarketing
Finally, telemarketing. This is the biggest mixed bag of the lot. Being labour intensive it requires a premium investment, but who should make those calls: a sole trader telemarketer, a larger company, or employ your own in-house cold caller (even just on a part-time basis)? There are merits and pitfalls with each option, and I have experienced good and bad campaign results with all three. Either way this route to market does need to be tried and tested.
Keep it simple, cut the cheese and don’t lay a silly trail of golden breadcrumbs which attempts to force prospects into saying “yes” to. It’s quite basic for Responsiva: would you like to test some free samples? Prospects will give a direct answer to a direct question.
The key to all marketing is test & measure, so I am delighted to have tried out so many channels and met so many suppliers along the way. The overwhelming majority want to deliver a great service with positive ROI. Back to the first paragraph of this article; it would be better to stick with just the best two or three initiatives which work best, whilst dabbling in other marketing channels periodically.
Is market saturation a factual term, or just one of those spruced-up theoretical concepts which only happens to ‘other’ industry sectors? As I work with UK business data, one of the most enjoyable aspects is that everything is provable.
Market saturation is definitely a factual term. The mobile phone sector at the turn of the new Millennium being a good example.
Today there are 10,000 business consultancy practices UK-wide. This sector has grown in volume massively since the turn of the Millennium. Operating within the b2b sector to help guide, coach and support other businesses to grow in profit. This service typically involves reviewing the company’s full operation from sales & marketing, IT systems, team infrastructure & motivation, operational processes & efficiencies, financial management, reporting & measurement, wasted expenditure and any aspect where additional revenue can be earned or savings can be made.
But who are their target market of these 10,000 consultancies? This is the question.
Does a sole trader really need all these services, and could they afford them? Do the high street branches of national chains have the autonomy to enlist such services? And is it a service investment which the public or charity sectors would be able to justify?
The numbers are factual; the UK hosts 500,000 viable business prospects for these 10,000 business consultancies. The figure increases (possibly trebles) if micro businesses could be considered, and halves if a threshold of around 8+ employees is implemented.
This means that (if prospects were shared out equally) each business consultancy has a prospect pool of just 50 prospects.
Most viable companies (and by most, I mean well in excess of 90%) will have been called many times over, offering an appointment with one of numerous business consultants.
Let me elaborate on the term ‘many times’ by doing the math: say 10,000 consultancies each make 1,000 outbound telemarketing calls per month with a view to setting an appointment. That would be 12,000 calls per year per business consultancy. Times this by the 10,000 consultancies and that means 120 million calls per year. To 500,000 prospects, that would make 240 calls per year per business prospect.
i.e., each prospect would receive a marketing call each and every day.
Whilst these numbers can be argued (and not every consultancy makes telemarketing calls as a part of their marketing strategy) I am aware that some consultancies make five or ten times this volume of calls per month. So however these numbers are translated, it is factual to say that almost every viable commercial prospect has been contacted a staggering number of times.
Branding & Bread Crumbs
There are times when branding is counter-productive. Receiving five marketing calls per week is one thing, but what if you received those calls from the same company? Some would regard this as brand awareness, but from my experience would suggest it more akin to brand damage.
Much of the UK population has shifted loyalty from branded goods over recent years, now regarding for example the cut price supermarkets as a better value alternative. Whereas other brands (such as Virgin) have focused their well-received brand image on customer value.
With branding comes uniformity, alignment and consistency. Wherever you are in the World you would expect a Big Mac to be consistent; in contents, taste, service and (allowing for regional fluctuations) price. With business consultancies the service is to some degree personal. Trust in the individual providing the consultancy service is key, and that is not measured so much in terms of brand value as by the individual’s personal attributes.
Yet many business consultants market themselves with exactly the same message. Perhaps the most unsavory of these messages is what can only be described as the trail of golden breadcrumbs, leading to an enforced “yes”. For example:
“Would you like to earn £1million per year in profit?” <yes>
“So you would like your business to win more customers and run more efficiently?” <yes>
“Would you like to spend less time working in your business?” <yes>
“My consultancy can help you deliver all this. Would you like to meet?” <pause for answer>
Business owners and company directors (by their very nature) are intelligent people who can see through these leading questions, and such an approach might even lead to offence.
So is it any great surprise that I have come into contact with many business consultants over recent years who have invested thousands of pounds in their telemarketing campaigns, and yielded absolutely nothing by way of return? As some would say … keep doing the same thing and you will keep getting the same result.
Conquering Your Marketing
There remains a positively vibrant and viable marketplace for business consultants today. But the route to market, marketing message and even the target market could benefit from some changes if future growth is to be achieved.
Marketing has four principles; what to say, how to say it, who to say it to and when to say it.
The “what to say?” element is simple; a direct, honest approach should outperform the trail of golden breadcrumbs. People buy from people, so be true to yourself. The marketing message needs to reflect who you are, rather than the words of someone else. The breadcrumb approach may have once worked well, but times change and business owners are wise to it.
“How to say it?” is really more about the marketing channel; is telemarketing right for your business, or should you try other routes to market? If the message remains the same, other marketing channels should yield the same result. There is a place for telemarketing, providing the message changes. Such as the removal of guided “yes” responses.
The “who to say it to?” needs to diversify also. Why keep hammering away at the same saturated market? And here is where I have two ideas of new markets; as a combined pool, there are 1.5 million new prospects available. Not completely untouched, but certainly this prospect pool is far from saturated by comparison. So I would welcome further discussion on this with any interested business consultancy.
As for the “when?”, if the service is needed then the timing is now.