Highlights from the Direct Marketing to Business Conference

1. Highlights from theDirect Marketing to Business Conference HSR.edu May 25, 2006 Greg Holliday Jennifer Zieverink

2. Agenda • Conference overview and key takeaways • Seminar Content • Building a BtoB Direct Marketing Database • BtoB Creative Secrets to Lift Response • Turning Every Contact into a 1-to-1 Sales Opportunity • DMA Membership Details • Q & A

3. Conference Overview • Attendees • BtoB marketers who seek to make more effective use of direct/interactive marketing • Content organized around three areas • Prospecting and Lead Generation • Lead Qualification and Conversion • Customer Retention & Growth • Sponsors • Exhibitors

4. Key Takeaways • BtoB direct marketing is unique • Many types of valuable data is now available • Analytics is important, but most are using very basic statistical techniques • Average DB marketing technologists less tech savvy than HSR • Lots of great marketing communications opportunities, AFTER you build a good database

5. Building a BtoB Direct Marketing Database Greg Holliday Jennifer Zieverink

6. What’s a Marketing Database? An organized collection of data about individual customers, prospects or suspects that is accessible and actionable for marketing to support both strategic and tactical decisions across all marketing channels MDB

7. Database Marketing • Uses a MARKETING DATABASE as the vehicle for predicting behavior, measuring media performance, and for storing the transaction data so that list selection, segmentation, and analysis can be conducted. • Is data-driven - one step informs the next in a logical, testable, observable and accountable way.

8. The Three R’s Of Relationships TRIERS 1 time member BUYERS Transactor CUSTOMERS Loyalist

9. Ultimate Objective of A MDB To serve as the single repository for all data identified as relevant to meet the goals ofmarketing that are actionable and accessible for: • Capturing data from all channels • Segmentation and query • Modeling and predicting behavior • Measuring media performance • New product simulation & testing • Multi-channel marketing

10. The Three C’s Of Database Marketing • DEMOGRAPHICS • Who they are and where they live • PSYCHOGRAPHICS • What they buy and what they like • INFOGRAPHICS • What they read and how they communicate

11. Customer Vs. Prospect Databases • Customer datatells you about the past • Prospect data tell you about the business opportunity • What else do they buy? • Where are they going to get it? • What’s important to them? • If you marketed differently, would it • make a difference? • New products and markets

12. Data helps you solve the puzzle Good New Products to New Customers New Products to Existing Members New Products to New Members • How will you grow? • More volume of same • members • More to new Members • New offerings to new • markets Typical Same products to New Members Current State Status Quo Typical Good

13. With An MDB, Marketers Can Use a set of tactics to “speak” - with a single voice - throughout the enterprise - by having a complete picture of how the customer interacts with their company The Tactical Tool Set

14. Magazines Customer Data Touch Points Mail& Catalog A complete picture of the customer’s interactions with the enterprise transactions The MDB Website Marketing FAX Direct Sales Customer Service (transactions) &Out Bound Telemarketing transactions Radio DR TV

15. The Marketer • Should have access to integrated information • MDB solution tools help the marketer to be “intelligent” to develop profitable marketing tactics

16. Use Your MDB to: • Have complete & current info on customer activities • Measure program impact and provide a baseline for improvement • Prioritize expenditures on high potential prospects

17. Use Your MDB to: CAPTURE / CODE THOSE WHO: Tell you they’re not ………… Don’t match the profile or model Outside the legal parameters of the offer Fall below the acceptable cut off

18. Market To The Segments THE BEST 80% OF REV. GOLD FOCUS ON RETENTION SPEND YOUR $$ HERE MOVE UP CAN GO EITHER WAY THE NEXT BEST HOPE DEPENDS ON MKTG. EXPERTISE REACTIVATE OR ARCHIVE LOSERS

19. Develop Event-Triggered Campaigns MDB SELECT PROSPECTS FOR LEAD GEN. MAILING GET RESPONSES UPDATE TO MDB H W C C MDB EVENTS ARE TRIGGERED ### Use an Algorithm or use Birth date, etc.

20. Shifting From Product / Service to Customer Centric Service Address Invoice Address vs. Buyer / User of Product / Services

21. What kinds of customer information are companies maintaining? ACTIVITY % Companies Using 2000 2002 Individual $ Amount of Purchase 68% 86% # of Annual Purchases 45% 75% $ Value of Annual Purchases 51% 81% Recency 49% 84% Frequency 51% 77% Source of Original Lead/Contact 66% 80% Competitive Products Used 25% 45% SIC Code 36% 41% Promotional History 36% 56% Demographic Overlay 25% 37% Prospects 72% 76% Source: Richard Levy, DIRECT magazine

22. The cast of possible characters we want to contact • Specifiers • Influencers • Users • Decision makers • Mailroom supervisors • Gatekeepers • Purchasing agents

23. Types of data sourced Accounts receivable records Shipping and order information Credit files Sales leads, sales contacts Inquiries/referrals Channel marketers end user data Web data Customer service systems Where it can come from Legacy systems Operating systems Sales managers desktops or notebooks Resellers shipping systems External rented and purchased data providers …yes, it can be a bit of a nightmare BtoB internal data sources

24. Contact information Title, function Enterprise v. site Parent company SIC or NAICS Year started Public v. private Revenue/sales Employee size Credit score Size of Yellow Pages ad Purchase history Purchase preferences Fiscal year Budgets, purchase plans Survey questions Qualification questions Promotion history Service history Source code Unique identifier, DUNS # Typical BtoB data fields Note: Italic items come from internal sources.

25. Key business data suppliers • Experian • 14 million US businesses • Dun & Bradstreet • 14 million US businesses • InfoUSA/Donnelley Marketing • 12.5 million US businesses

26. Business compilation sources • Yellow Page Directories (5200) • Business White Page Directories (4000) • Chamber Industry Directories • Secretary of State Files • Courthouse new business listings • Annual Reports and 10-K’s • SEC Filings • Business Journals and Periodicals • Internet Research • National Change of Address (NCOA) • Zip Code Changes • Area Code Changes and many more…

27. Sales rep assigned Territory covered Products covered Type of channel partner (top tier, second tier, reseller, distributor, etc.) Years as channel partner Industries served If channel data can link to the end user, bring over the company DUNS/ABI or company ID# for end user Building a channel partner database: Additional fields needed

28. How to purchase overlay data • Most popular overlay data fields: • sales volume • number of employees • SIC/NAICS • Method: • Only append after exhausting all internal sources • Clean your database • Carefully select a data source • Pre-test the match rate • Test appended data for validity and response • Based on results, calculate the value of the overlay • Consider compiling custom data

29. Demographic fields to append Carrier route: identifies the individual mail carrier, for maximum postal discounts Years in business code: indicates stability and purchasing needs Life cycle predictor: determines whether a growth, static or declining business Employee size: indicates buying needs/process Annual sales: indicates buying needs/process Source: Experian Credit fields to append Derogatory legal indicator: tax liens, bankruptcy, collection problems Legal liability amount: dollars of legal liability UCC data indicator: indicates company has secured a line of credit by collateral Recent inquiry date: indicates that company is seeking credit DBT of combined trade totals: average number of days of late payments Demographic and credit appends

30. PRIZM-like cluster profiles for BtoB • D&B offers 22 distinct, mutually exclusive profiles created from combining firmographics and trade variables • Branches of a parent company are assigned their own cluster, for site level marketing. Also aggregated at parent company level. • Example: Cluster 21: Solid & Sons (554,000 businesses) • This group of businesses is marked by its superb financial ratings and above average trade activity. A majority of them are corporations (but at a single location) with an average of 20 employees on site, and about 15 years business experience. Their above average trade activities are typically with creditors, wholesalers and trucking/warehousing. Among the top 10% of this very stable and active cluster are plumbing/heating services, doctor’s offices, construction companies, wholesalers, and other business services. About 40% of them can be found in Southern US. • Ruf Strategic Solutions offers 114 B-to-B clusters • Claritas also offers their Prizm Cluster Codes for B-to-B

31. Business information is volatile During the next two hours (based on D&B’s database): 706 firms will move 578 businesses will change their phone numbers 514 suits, liens or judgments will be filed against companies 250 business phone numbers will be disconnected 120 new businesses will open 120 D&B credit ratings will change 120 corporate CFOs will change 60 companies will change their names 60 businesses will shut down 10 firms will file a bankruptcy petition 1 company will change ownership

32. Data decay by element • Decay rates of key business data elements over a one year period. • --From an internal study conducted by D&B.

33. Data hygiene techniques • Train and motivate customer-facing personnel to update the data • Use data-cleansing software, internally or externally • Standardize data and train on the rules • IBM versus International Business Machines • Eyeball the data regularly • Allow customers access to their records on your web site, so they can make changes

34. Benefits of good hygiene • Improve response by reaching more people • Lower costs with less waste • Improve customer satisfaction and company perception A 2003 report from the Data Warehouse Institute said that bad customer data costs U.S. businesses more than $600 billion a year in postage, printing and staff overhead—not to mention lost opportunities.

35. Requesting corporate mail room to notify mailer of personnel changes via mail or phone response to “bundle letter” accompanying the catalogs. --Courtesy of Paragon Direct

36. Consider database “beautification”

37. Graphic rendition of the duplicate company name distribution Here is the same data, in graphic form. Nearly 20,000 unique companies were only listed once, which is good. But 78% of the records represented duplicate companies!

38. How company name appeared on the file

39. Title Beautification

40. Current State of BtoB Database Marketing • General consensus: technological tools are available to mine, retrieve, integrate and use marketing information • Few companies have achieved the ideal of integrating customer data into a marketing system to be able to do database marketing • Most are still preoccupied with the challenges of basic data management! • So, now is the time for marketers and their IT colleagues to learn how to use this technology

41. BtoB Creative Secrets to Lift Response Greg Holliday Jennifer Zieverink

42. BtoB Creative Secrets to Lift Response • Mythbusters on BtoB creative techniques • Critical elements of direct mail creative • The 7 Rules of Creation Nancy Harhut, SVP/ECD, Hill Holliday

43. Turn Every Contact Into a One-to-One Sales Opportunity, Xerox Greg Holliday Jennifer Zieverink

44. Turn Every Contact Into a One-to-One Sales Opportunity, Xerox • Generic equipment renewal contract becomes personalized offer wrapped in segment relevant creative • 42 combinations, infinitely scalable • Customer segment – creative • Offer based on product and usage • Time of need

45. Turn Every Contact Into a One-to-One Sales Opportunity, Xerox • Technology • ASP.NET and SQL Server • Message matrix • Content • XMPie to convert and transmit data into publishing software • Adobe In Design to publish data in creative layout • Results • Positive customer feedback • Lead submissions and revenue doubled

46. DMA Membership Details Greg Holliday Jennifer Zieverink

47. Direct Marketing Association • Founded in 1917 • Leading global trade association of business and nonprofit organizations using and supporting direct marketing tools and techniques. • More than 4,800 corporate, affiliate, and chapter members from the US and 46 other nations

48. DMA Membership Details • Education • Seminars • Webinars • Newsletters and publications • Research • Direct Link (www.the-dma.org/directlink) • White papers (www.the-dma.org/whitepapers) • Research and Statistics (www.the-dma.org/research)

49. Questions? Greg Holliday Jennifer Zieverink