I recently reviewed a research study carried out by Marketpoint that looked at how business people used its data-based sales information systems called Salespoint. These are used by many B2B clients to run their sales forces, allowing salespeople remote access to their sales databases, including pipeline management and many other features.
The research showed the importance of usability in every sense of the term. It was used by Marketpoint to redesign many features of product. However, it also showed how critical the impact of usability was on use. If a salesperson can’t use the system with absolute ease via their laptop or mobile device, then it won’t be used. That’s an old lesson, but meeting a salesperson’s requirements is even harder today than it was years ago, because their expectations in regards to immediacy of access and updating have risen dramatically. I’m convinced this issue is one of the reasons why so many B2B companies still face problems with implementing an integrated sales and marketing policy.
Recently, a large B2B client asked me to examine how it managed its smaller customers. As usual, the Pareto rule applied to revenue, with hundreds of thousands of small customers (to whom the company sells through commission agents and so has their details) creating the same revenue as its hundred or so top customers so it wasn’t as bad as 80:20 more like 80 per cent of customers generating 50 per cent of revenue.
What was interesting (though not exceptional) was that small customers were very profitable, much more so (in percentage margin terms) than larger customers. That’s because the largest customers extracted large discounts, special delivery and service terms. The company’s main product is close to being a commodity. Although the company is the market leader, it hasn’t found a way to differentiate its proposition. This is a bit surprising, as it carries a much wider product range than its main competitors, but it is rather weak at developing segmented propositions, because of the weakness of the central database.
Its big customers were managed largely through a key account sales force, while smaller companies were handled mostly through a contact centre and campaign-driven direct mail. A cardinal sin dialogue is absent and use of the company’s website by small customers is weak. The company has no strategy for managing smaller companies other than inviting them to the relevant trade shows for the sector. One of the results of this is that the quality of data on smaller customers is also poor. ‘No dialogue, no data’, seems to be a good rule of thumb. Even the use of third party data vendors has not helped much, and of course this kind of data goes out of date very quickly as small companies come and go, relocate, change their management and so on, unless it arises from dialogue with the customers themselves.
Of course, putting it positively, the company has a great opportunity for dialogue-based direct marketing and for harnessing the power of its sales force and contact centre. It has a very strong and respected brand, to which smaller companies are already responsive, as demonstrated by the good response rate to event invitations. However, the company’s market research has been so driven by above-the-line marketers that it has no idea what kind of dialogue proposition is likely to appeal to smaller customers, how they might like the dialogue to take place (frequency, channel, content etc.) and how much effort they are prepared to put into it.
All this took me back to my roots as a B2B marketer. I started my marketing life in the engineering industry, then photocopiers and computers. What I find odd is that in 2007 I’m describing a situation like this, 20 years after I thought that B2B marketers had ‘got it’ in as far as how to combine distribution channel management with direct marketing and selling. At the heart of the problem lies a lack of sympathy of many B2B marketers with data and sadly, DM.
Of course, many are also converts to direct marketing and nobody can fault the leading practitioners of integrated marketing who have taken the web as a tool in direct, data-based marketing to new heights. However, there are still many areas of B2B marketing where the belief in the dominance of the non-data-driven sales force, product and engineering excellence dominates. For some however, it’s a more negative reason a belief that all this direct stuff involves that very difficult area called data and it is just all too difficult.
And this brings me to the crux of the problem. B2C direct marketing is a world inhabited by specialists. Nearly all those who use the data are specialists in using it for their particular application, for example, analysis, outbound contact (mailing, telemarketing), inbound contact and fulfilment. But a key account manager, a territory sales person, and a distributor or commission agent are people usually not expert in using their data, and may even regard it as an obstruction to selling, because they have to keep checking it. That’s why they need the smartest and easiest to use systems.
It is also one reason why approaches that allow customers to maintain their own data can work very well. After all, in the B2B marketing world, most customers really do need their suppliers and are prepared to invest time in keeping their own records up to date. Sadly, most companies are well behind the pace on this and don’t trust their own customers to do it. It’s where the customer is very powerful that we get the opposite – big retailers forcing supplier compliance with the retailers’ systems interface and data policies.
