Business mailers prioritize database fundamentals differently
Direct marketing consultant Don Libey, who works with both consumer and business-to-business catalogers, recently called RFM (recency, frequency, monetary) modeling "the most fundamental basic of direct marketing there is." But business-to-business mailers may need to adjust this "fundamental basic" to produce the best results.
For instance, at G. Neil Cos., a cataloger of human resources management materials, "we prioritize it `RMPF,'" says president Terry Jukes. (The "P" stands for product select.)
"Recency is always the most critical, because much of b-to-b selling is based on repeat orders," Jukes says. Monetary, rather than frequency, comes next. Consumers might spend from $50 to $500; "b-to-b customers, however, could spend $50 to $50,000." To determine which customers its telemarketers should call with soft-sell offers, G. Neil looks at their order sizes as well as their companies' sizes, Jukes notes. G. Neil most often contacts customers from larger companies who place bigger orders.
P, or product select, enables G. Neil to determine which catalogs to send to which customers. "For customers who have bought particular products from our main catalog, we subsequently send them specialty catalogs featuring just those products," Jukes says.
Consultant Neil Sexton, president of Trinidad, CO-based consultancy Sexton's Market, says that product select is often far more important to business mailers than it is to consumer marketers. "With many b-to-b catalogs, individual buyers are focused on one particular product category," he says. "On the other hand, even with a customer who has a history of only buying sweaters, consumer catalogers are always thinking, `I bet she wears shoes with those sweaters.'"
As for frequency, Jukes, echoing several other b-to-b catalogers' sentiments, says, "It doesn't make a whole lot of difference to us if they order five or eight times a year--the order size counts much more."
George Mosher, president/CEO of the $100 million office furniture cataloger National Business Furniture, also doesn't pay much attention to frequency. "Furniture is a longer-lasting product," he says. "You don't buy a desk every day. But if a customer spends $1,000 once and doesn't buy again for two years, he may still be worth mailing to."
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