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Advice to database marketers: Tend your garden well

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Steve Cone is chief marketing officer of Epsilon, a global provider of data-driven marketing and integrated marketing services, and is the author of "Steal These Ideas: Marketing Secrets that Will Make You A Star" (Bloomberg Press, 2005). BtoB recently asked Cone about trends in database marketing and list management.

BtoB: What is the biggest challenge facing database marketers?
Cone: Probably the majority of companies, regardless of size, still basically have that old paradigm in their heads that they have to speak to everybody before they speak to the people they already know. They feel they have to project their products and services to as many people as possible, instead of asking themselves how much it's going to cost, and by the way is there anything left to communicate with existing customers.

BtoB: Is there an inordinate emphasis on new customer acquisition?
Cone: It's just that marketers who come out of business school aren't as comfortable with communicating first and foremost with their existing customer base. It's viewed as the unsexy part of marketing. But the fact is, for any company trying to promote itself, the first question must be, how can I best and most effectively communicate with existing customers and top prospects. The only way to grow any business is to get existing customers to buy more often, and to buy things at higher prices. Job No. 1 is to figure out how to effectively communicate over the next 12 months directly through e-mail and direct mail, making sure all your customer touch points are direct-response friendly.

BtoB: So, companies' internal lists are most important?
Cone: Yes. Let's take as an example: Fedex. Epsilon and I started working with Fedex in the mid-1970s. I remember sitting with the head of marketing for what was then Federal Express, and, the short story is, he asked us to help him keep track of his customers, clients, decision-makers and the business they did with him. Fedex became one of the first, in my opinion, b-to-b operations that rapidly began to understand that the way to grow was to market first and foremost to existing customers, by reminding them of additional services they weren't using, and to offer them incentives to become larger customers.
Nothing has changed for b-to-b companies. The primary job is to communicate effectively and regularly with existing customers and ask for more business. Then, you can figure out their profiles and go to outside sources to see what other demographics look similar.

BtoB:Do you have any suggestions on how to do that effectively?
Cone: One of the things that companies need to get much more aggressive about is collecting e-mails from customers and top prospects. It's surprising how many companies don't focus on doing that.
And if anything, over-communicate, with compelling and exciting offers. These days, people are in a bad mood. They are tightening purse strings like crazy, and you need to move them to buy additional products and services. One way is to create a loyalty program. Volume discounts is [one means to do this], but also just plain recognition, which goes a long way, in reminding people that they've been your customer for so many years and thanking them for that. I guarantee you that if you're doing that, the other companies aren't.

BtoB: But your existing database has to be mined for rich information for that communications to be effective, right?
Cone: Yes, you have to take into account the customer's history as much as possible so the messages are as personal as possible. For many of our clients, the e-mails they send are based on their specific relationships with the contacts, how often they use the company's services, what types of services they use, what types they're not mindful of that they should be, and with special offers to them. There's no reason you can't have truly one-to-one communications with thousands, or even millions, of customers based on today's technology.

BtoB: So far you haven't mentioned the effective use of external lists. What about those?
Cone: We have a powerful subsidiary, Abacus, which is the largest retail cooperative database in existence. And we have a complete b-to-b list as well. Here, you first profile your existing customers to understand their dynamics that brought them to you, and then create a model to apply to outside lists.

BtoB: The largest retail cooperative database? How does that apply to b-to-b marketers?
Cone: All these considerations are true for both b-to-b and b-to-c. To me, from a marketing technique standpoint, the difference between b-to-b and b-to c is B.S.

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