Reaching Out

WHAT ARE THE most effective ways to reach business buyers? You know the arguments: Some marketers swear direct mail is still best because targeted lists are so widely available. Others invest most of their budget in trade shows, where both customers and prospects are expected to attend. And many simply use e-mail because it's so darn cheap — or at least it seems to be.

Smart marketers know the real answer is “It depends.” With so many variables involved, it's hard to make blanket claims for one medium over another.

But there are some rules of thumb. Let's look at them with an eye toward customer acquisition.

• Search engine marketing

  SEM is the hottest of the hot these days, with good reason. The Internet is the top research tool for business buyers seeking solutions to their problems. Marketers can hardly find a more targeted medium than keyword search bidding. Since most SEM opportunities are offered on a pay-per-click basis, the risk is relatively manageable. The problems with it are twofold: Aggressive competition means SEM requires constant attention; and there are natural limits to its availability. If people aren't searching on your category, you're sunk.

• Outbound telemarketing

  The phone is still the workhorse medium of business-to-business DM. According to the Direct Marketing Association's 2005 economic impact report, B-to-B marketers spent $28.5 billion on telephone promotions and advertising last year, compared with just $11.7 billion for direct mail.

  Of course, phone marketing gets its power from being the nearest thing to face-to-face selling. In sophisticated buying environments, when you're trying to find a technical buyer or a senior decision-maker, a sophisticated phone-based sales force can have serious, productive conversations. Reps can explain product features and benefits, probe on needs, network to the right parties and even close sales.

  At a lower level, the phone is a great tool for data discovery, to identify the right contacts, or to verify addresses and titles. It's also useful later in the prospecting cycle for lead qualification and nurturing.

• Direct mail

  Reports of direct mail's demise are greatly exaggerated. The ol' reliable medium still delivers. With literally 18,500 business lists recorded in the MIN system, most prospective business buyers can be found through the mail, even for obscure products or very targeted niches. Business buyers themselves are looking for information to help them do their jobs, and they generally welcome — and open — letters. The DMA's 2005 response rate study reported a healthy 2.04% response rate to B-to-B direct mail, and 1.59% to its cheaper cousin, postcard mail.

• Dimensional mail

  For marketers trying to get past gatekeepers, dimensional mail is the ticket. Also known as “lumpy” mail, dimensionals tend to be perceived as valuable by mailrooms and secretaries, and more likely to be delivered to the executive inbox. The DMA's recent studies confirm that for B-to-B marketers, dimensional mail produced a 5.14% average response in 2004 and 4.66% in 2005.

• Trade shows, if the audience is highly qualified

  Business DMers spend an average of 18.6% of their budget on trade shows, according to a 2004 study from the Business Marketer Association. Most of that is targeted to sales-lead generation and finding new customers. But trade show marketing is expensive, costing an average of $215 per contact last year, according to research firm Exhibit Surveys Inc.

  I believe marketers should select shows very carefully, based on the likelihood of a strong concentration of potential buyers on the show floor. Broadly based horizontal shows simply involve too much waste. And at those prices, watch out.

• Public relations

  At the early stages of the sales cycle, awareness is the business marketer's critical objective. But awareness generators customary in consumer markets — broadcast television, for example — are out of the question for all but the broadest B-to-B categories. This is where PR comes in. Simply the best bang for the buck, PR, in the form of media relations and analyst relations, delivers awareness in business markets at low cost and with high credibility. Not that it's easy to generate. But trade publications need to fill their news holes. The tried-and-true techniques — contributed articles and news “manufactured” by original research — should be part of every B-to-B prospecting program.

• Your company's Web site

  You may be surprised to see this on the list, since a Web site is usually viewed as a passive medium rather than an outbound media channel. In truth, your firm's Web site can provide the cheapest, most qualified sales leads.

But be advised: You must take steps to convert the site from its normal function as a “brochureware” provider to an interactive environment that stimulates visitors to leave behind their contact information.

The secret, known to every DMer, is an offer and a call to action. Invite visitors to download a case study or a white paper, or to sign up for your company's e-mail newsletter. The registration form can be as simple or complex as you like. The more information you ask for, the lower the response — but the more likely those respondents are to be qualified prospects for ongoing marketing efforts.

It's a wonder so few business marketers take advantage of this opportunity for free marketing.

WHAT TO AVOID

Not everything works, so here's a list of things to steer clear of when prospecting. Again, I hide behind my disclaimer: There are plenty of exceptions to these so-called rules.

• Print advertising

  Solid direct response ads can work brilliantly for lead generation in trade and business publications. The problem is that most ad budgets are controlled by marketing communicators who are unschooled in direct. They don't know how to develop an effective offer and call to action. They let designers, rather than copywriters, drive their creative. They don't measure their results.

  But, in my opinion, there's one print ad medium that's failed miserably, namely reader service cards (“bingo cards”). This is the pathetic attempt print publishers made some decades ago to add value to their medium. They bound in card-stock inserts printed with a slew of three-digit numbers, assigned a number to each advertiser, and inserted the number at the bottom of any ads run by that advertiser. When readers circled numbers on the card and dropped it in the mail, the publisher then sent out the readers' names as “leads” from the advertising. The problem was that these so-called leads arrived months later and were generally worthless.

  My advice: Marketers would be better off passing up this option. They should create their own hard-hitting DR print ads.

• Broadcast advertising

  Broadcast, whether television or radio, is so effective for advertising because it combines a rich communications environment with some ability to target audiences. The problem here for business marketers is targeting. In most cases, there's simply too much waste involved to justify the expense. And in TV, the barriers to entry posed by creative development are too high to scale.

  But there are major exceptions to consider. As Bill Hebel, senior vice president and media director at Chicago agency Slack Barshinger points out, radio can be highly effective in certain business categories. For some clients, Hebel found he could reach blue-collar targets like plumbers and electricians during early morning slots, before the expensive drive-time rates kicked in. These contractors already were out for the day in their trucks, and open to hearing business messages over the radio.

• Solo e-mail

  Despite its promise, e-mail has failed business marketers as a prospecting medium, due entirely to spam. There are some categories where rented e-mail names can still work — technology and engineering, for example. But overall these days, we're seeing better cost-per-lead results with direct mail.

This is not to say that e-mail should be banned from the prospecting process. Au contraire. E-mail is superb for lead management and nurturing. Once you've persuaded someone to raise his or her hand, e-mail is the perfect way to keep in touch and move the prospect along in the sales cycle. Karen Breen Vogel, president/CEO of interactive agency ClearGauge, says e-newsletters are particularly effective in such instances, especially in narrow niches when the content can be made highly relevant to the industry.

WHAT'S NEXT

Media productivity evolves over time, and there are some exciting potential prospecting tools for business marketers on the horizon. For example, Hebel has found that online contextual advertising works. Text links, especially, are viewed as editorial, so they can be very attractive when served up on a keyword-specific basis. “People are ignoring banners these days,” Hebel says. “Contextual ads are not only more relevant, the CPMs are cheaper, too.”

Vogel points to early experiments with “social networking” media like LinkedIn, which use the Internet to stimulate word of mouth. And everyone is talking about blogs, podcasting and RSS feeds. Let's hope things continue to develop for productive B-to-B prospecting.

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RUTH P. STEVENS (ruth@ruth-stevens.com) consults on customer acquisition and retention, and teaches marketing to graduate students at Columbia Business School. She is the author of “The DMA Lead Generation Handbook” and the recently published “Trade Show and Event Marketing.”