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Business Data Propensity Scoring

When evaluating the best prospects to market to, business data propensity analysis will establish a propensity score and pinpoint the right sectors.

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General Data Protection Regulation (GDPR)

What is the General Data Protection Regulation (GDPR)?

  • The GDPR is a new EU regulation to replace Directive 95/46/EC which will be directly applicable in every Member State. This means there is no need for the UK to implement any secondary legislation
  • The aim is to harmonize all data protection law across the EU and increase individual rights
  • The regulation will come into force on 25thMay 2018
  • Brexit may have some impact on the implementation in the UK, however it is likely that the UK will need to be compliant with the regulation in order to continue trading with the EU.

 

Confusion still reigns over what the current and proposed legislation is for B2B email marketing. The European Commission has now published the final version of its text for the replacement for the ePrivacy Directive (which will become a regulation) and there are still no proposed changes.

Here is an overview of the final version of the regulations:

  • Employees of corporates, ie. limited companies, publically limited companies, limited liability partnerships and government departments, can be emailed without prior consent.
  • Employees of corporates must be given the option to easily unsubscribe or opt-out from receiving email marketing.
  • Sole traders and partnerships are treated as consumers and will require opt-in.

Will these rules apply to your existing customers and prospects? If you obtain an email address for a sole trader or partnership whilst negotiating the sale of a product or service then you can use their email for unsolicited direct marketing purposes provided the following apply:

  1. Your marketing is for similar products or services offered by your company
  2. Your company told the recipient at the time of collecting their email address that it would be used for unsolicited email marketing and you provide a clear unsubscribe/opt-out at the same time
  3. Your company provides a clear unsubscribe/opt-out option every time you send an email message if the recipient did not unsubscribe/opt-out at the point of data collection.

Rachel Aldighieri, MD at the Direct Marketing Association said of this final version, “…the possibility of email marketing for these businesses (corporates) moving to opt-in… caused serious concern across the B2B marketing industry. If they had gone ahead, these alterations to the law could have had a profound and negative effect on the UK economy, so we welcome today’s announcement from the European Commission.

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Business Data Cleansing

Ensure your business marketing database is kept fresh and up-to-date with business data cleansing.

 

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Business Data Scoring

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.

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b2b data Company Start Date

Limited Companies

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.

 

Non-Limited Companies

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

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.

 

Start-up Companies

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.

 

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Specify Business Marketing Data

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Specify the right business marketing data for your next initiative.

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An Intro to Responsiva’s B2B Data Services

b2b data services from Responsiva…

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Business Data Branch Count

Branch Count

 

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.

 

Examples

Some examples of high branch count businesses by their respective industry sector;

Branch Counts

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.

 

Head Offices?

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.

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Business Data For Postal Mailings

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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.

 

By Comparison

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.

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B2B Marketing to the Big Fish

TWEET PIC 20170215 (Linkedin) resized

 

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.

 

3. Procurement

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.

 

 

 

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