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B2B Acquisition: Get more list for your money

MoneyBusiness to Business acquisition can be quite daunting. If you are an organization that services a large region with a small number of employees, you want to ensure that your acquisition strategy is efficient. If there are 50,000 businesses in the region, let’s imagine that you can contact 25 prospects per week, or 5 per day. That would require you to have 20 salespeople. That’s pretty aggressive for a sales and telemarketing team and chances are that you don’t have that big a sales force!

What if you could only get in touch with 5,000 businesses (1 in 10)? How would you find and target those businesses? The answer lies in some fairly simple database marketing techniques applied to business to business acquisition. I provided this analysis over a year ago to a regional firm, and now we just completed our second year of prospecting for them. It’s not rocket science, it’s simply prospecting in industries that match the firmagraphics of your customer base.

Step 1: Profile your businesses. This is a service that most data companies will provide to you at a moderate cost. InfoUSA, Dun and Bradstreet, and AccuData are a few of these types of companies. Once you receive the reports, it’s important to analyze and compile them into meaningful data. Here’s an example (Click to view):

Years In Business by Industry – Penetration %:
Years in Business

Business Sales Volume by Industry – Penetration %:
Sales Volume

Number of Employees by Industry – Penetration %:
Number of Employees

Step 2: Analyze the Results

Penetration is the percent of customers in that range that you have compared to the average percent of prospects in that range. In other words, if 25% of your customers have been in business less than a year, but only 10% of regional businesses have been in business less than a year, then you better target new businesses! By doing so, you’re increasing your chances of finding a prospect rather than looking at companies that don’t compare.

The telltale sign of whether or not you can act on the data are simply to look at the shape of the curves and relationships within an industry. Here’s some general observations (low hanging fruit) from the charts above:

  • Number of Years in business: Notice how both G & H have a peak in the first year or less? I would take a deeper stab into these industries and possibly invest in New Business prospect lists.
  • Sales Volume: While many of the industries rise and fall in a nice curve, notice how construction ramps upward? So… the bigger the construction firm, the better!
  • Number of Employees: Notice how the service industry is fairly flat? That tells me that the number of employees may not be a factor in that industry.

Step 3: Apply the findings

If I wanted to be lazy and fast, I’d simply supply my data company with the peaks of my curves and use those as a minimum for targeting prospects within each industry. Data companies usually won’t charge you for doing some complex queries against the data to come up with your list so don’t be shy, ask! A far better way to do it is to develop some scoring algorithms based on the profile, and then apply that formula to the prospects to get an overall score for a prospect. Simply order your prospects in descending order, and begin the acquisition!

Step 4: Execute!

When we executed these campaigns for our client, we analyzed what their throughput was for contacting prospects. Understanding how many prospects they could contact provided us with the counts we needed to narrow down their prospecting lists. We executed a 3-prong effort that resulted in a 10% increase in acquisition!

Step 5: Analyze the new results and start over

The landscape changes as do the characteristics of your customers. It’s important to continue to refine and adjust your scoring algorithms and prospecting.

Last note: There are entire books that are written on database marketing techniques. It’s difficult to communicate a complex database marketing process in a single blog entry, so I’ve taken the liberty of making a lot of assumptions and taking a lot of shortcuts. The actual process that we pushed this client through took a couple of months. We identified and matched 95% of their customer base back to Dun and Bradstreet data to get an outstanding profile. When we selected our final prospects, we of course excluded their current and recently expired customers.

I simply wanted to convey that there are some relatively simple and very strategic analysis you can do right out of an Excel spreadsheet that will improve your business to business acquisition efforts!

One comment

  1. 1

    I thought this was an extremely helpful post. In my experience, most small business owners don’t delve this deeply into industry or market analysis and so forth. But (obviously) doing so can really pay off by helping these business direct their efforts towards the best targeted prospects. Thanks for the info!

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