What is the most effective time to engage with a business? There are many considerations but I propose that the first ones must be:
- Is the business financially healthy?
- Is the business likely to fail?
Businesses go through their ups and downs through the years and engaging with them at a time which is most likely to generate a positive conversation is something that all marketers should be aiming to do. Whilst ‘people buy from people’ the B2B buying process is generally more complex and process driven and is connected and influenced by what is happening in the business as a whole.
The consideration of a business’ health when marketing to them has never been so important.
Restricted and more expensive lending has led to a more risky trading environment. Companies relying on contracts with the public sector will continue to ensure a difficult period. However some companies are beginning to come out the other side and UK business failure rates are falling. The 2011 UK budget has provided measures to ease the burden of planned spending cuts on companies. All of this means that we should take care to exclude those businesses that are not likely to be around much longer but also ensure we do not exclude those which are moving in the right direction and could offer great future lifetime value.
At a time of pressure on marketing budgets, the consideration of a business’ health and subsequent refinement of campaign lists provides a number of follow-on costs savings:
- Reduces marketing costs
Removes wasted mailers which can reduce mailing production and fulfilment costs by 5-10%. - Reduces sales operations costs
Removes wasted sales visits that can cost up to £300 a time, depending on salesperson’s transport and eating habits… - Reduces ‘take-on’ costs
Can save the time and cost of ordering a credit report by removing high risk prospects from the sales cycle. Every new application is likely to require a credit report, pre-vetting is always cheaper than buying a credit report. - Reduces bad debt
Minimises the introduction of risky business. - Minimises negative brand impact
Should minimise the retraction of an offer to a company through a credit check.
The consideration of business health in marketing is inexpensive so why are more businesses not doing it? I believe that there are predominantly three reasons:
- Silo effect
Staff compartmentalise their loyalties.
Marketing is focused on customer response rather than bad debt. - Limited awareness of benefits and application and misconceptions that application is complex
- Cost
Additional cost to already tight budgets.
Savings generated from this investment are not necessarily attributed to the marketing department.
Do your marketing and credit teams ‘join up’ in this area? Or should ‘risk assessment’ just be left to when we bring the customer on-board? Are you operating in an industry where it would be valuable to tailor marketing to both the size/potential of the prospect business AND the financial health of the business? Would you have a higher tolerance for ‘riskier’ business if there was a higher potential value?
