Business-to-business (B2B) acquisition can be quite daunting. If you are an organization that services a large region with few employees, you want to ensure that your acquisition strategy is efficient. If there are 50,000 businesses in the region, imagine 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 contact 5,000 businesses (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 firmographics of your customer base.
Step 1: Profile Your Current Clients
This is a service that most data companies will provide to you at a moderate cost. We recently did this with ZoomInfo and got outstanding match ratings and results. Once you receive the reports, analyzing and compiling them into meaningful data is important. Here’s an example:
Years in Business
Percent penetration by years in business and industry.
Revenue
Percent penetration by sales revenue and industry.
Number of Employees
Percent penetration by number of employees and industry.
Step 2: Analyze the Results
Penetration is the percentage of customers in that range that you have compared to the average percentage 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! Doing so increases 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 is to look at the shape of the curves and relationships within an industry. Here are 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 look into these industries and possibly invest in New Business prospect lists.
- Sales Volume: While many 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 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 complex queries against the data to develop 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. Order your prospects in descending order, and begin the acquisition!
Step 4: Execute!
When we executed these campaigns for our client, we analyzed their throughput for contacting prospects. Understanding how many prospects they could contact gave us the counts we needed to narrow 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 refining and adjusting your scoring algorithms and prospecting.
Last note: Entire books are written on database marketing techniques. It isn’t easy to communicate a complex database marketing process in a single blog entry, so I’ve taken the liberty of making many assumptions and taking many shortcuts. The actual process that we pushed this client through took a couple of months. We identified and matched 95% of their customer base to get an outstanding profile. When we selected our final prospects, we excluded their current and recently expired customers.
I simply wanted to convey that there are some relatively simple and very strategic analyses you can do right out of an Excel spreadsheet that will improve your business-to-business acquisition efforts!
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