B-to-B Marketing: Traits, Tips and Practices of Top B-to-B Retailers
The U.S. Postal Service has just wrapped up a postage sale for various mail pieces that included a QR code. When the USPS made the announcement, several respected and knowledgeable B-to-B cross-channel retailers asked me what a QR code was and why is the USPS so interested in them.
Are QR codes the next big thing? Just how behind are you with the big things? Have you optimized your website for mobile? What's your social media presence? Don't forget viral. By now you should have surpassed that 100,000 views benchmark on your YouTube channel …
The next big thing is usually fun, and I encourage mailers to test QR codes this fall. However, it's important to remember that the next big thing may be a transient technology or not a best practice at all. In fact, it could be a waste of your time and money.
You'll find that the top B-to-B retailers share the same belief on where they should focus their energy and how they conduct their business.
The most successful B-to-B retailers are merchandise centric. They maintain regular contact with the marketplace to find out where it's going. Successful merchants analyze sales, visit clients on-site, talk to them on the phone, attend merchandise shows, conduct competitive analysis and survey their clients as a way of life. This activity drives a full schedule of new product introductions and launches. If you're not doing most of these merchandise-centric activities, but are spending time on the next big thing, you've got the cart before the horse.
Let's use a consumer example to illustrate: Apple has really cool promotions. Its ads would be worthless, however, if it didn't have cool new products to promote. Cool new creative isn't going to sell more of the same old stuff.
For every million dollars in sales, add $10,000 to your bottom line when you add a point of margin. Top B-to-B retailers develop strategies to improve their margins. You can literally get a degree in sourcing and pricing products, so there's too much to cover here, which leads to our next point …
Companies that hire educated, bright people are most likely to succeed. Hire the best that you can afford rather than the cheapest you can find. Successful companies follow a strategy of hiring people who are best qualified to take the company in specifically predefined directions. The best companies hire with a plan.
When you hire the wrong person, you can waste precious years and countless opportunities discovering the error. It's worth investing in a hiring system. To help find qualified people, top companies often use metric-driven testing procedures. For example, let's say you're looking to hire a marketing manager who will emphasize creative innovation while also implementing proven systems for reporting. At first blush, these two characteristics seem at odds with each other. However, a qualified human resources professional can help you test candidates for the qualities you need in a new hire.
Great customer service begins with how you treat your employees. If you take care of your employees, your employees will take care of your customers. You'll find that top-performing B-to-B retailers allow their employees flexibility to handle life situations.
The biggest obstacle to automation in most companies isn't the expense of implementation, it's that key personnel don't believe that tasks can be automated. Earlier this year, "Jeopardy" fans watched IBM's Watson computer clobber the show's top two champions in a highly touted competition of man vs. machine. If winning "Jeopardy" can be automated, imagine what can be done in your company.
B-to-B retailers that stock thousands of SKUs use asset management systems. An asset management system will help you automate your product management to ensure consistent identity, message and price across multiple channels. Top systems include pagination and square-inch analysis modules to help you plan your catalog and analyze its results. You should be looking to automate everything from your weekly reporting to creating promotions.
Two of the biggest problems with automation tend to happen a few years after implementation. The first is a lack of documentation. Personnel changes and computers get upgraded, and gradually no one really knows what those weekly reports represent. Maintaining printed copies of the documentation in a binder prevents that problem.
The second challenge is a run-of-the-mill glitch. Perhaps a programmer was tweaking some code for another report and unexpectedly affected something else. For data-intensive reports, it's important to have manual spot-check procedures in place.
Smaller B-to-B companies often print with local printers. Though you may be getting a reasonable price on printing, you could be losing big on postage. Many smaller printers don't offer the mailing services that provide the best postage savings, particularly co-mailing. If you're not co-mailing, consider doing so immediately. You can probably save 5 percent to 10 percent of your annual postage bill by co-mailing.
Budget for Testing
This is probably the most overlooked item in strategic planning. How often has someone on your team thought of a great idea only to have it set aside because it wasn't budgeted for? Typically you should set aside a portion of your marketing budget for testing. One wry CEO called it his slush fund. For his $80 million B-to-B company, he set aside $100,000 for tests that he would approve. When managers had ideas that they thought were worth testing, they'd submit a budget and a forecast return on investment to this CEO. The system successfully encouraged innovative thinking and it's how the company tested the next big thing.
The most successful B-to-B companies test new merchandise categories, lists and offers. They set up A/B testing on their website for design, copy and presentation. They test reactivating names through outbound phone programs and appending email addresses. They test the next big thing, whether that's online video, mobile applications or something else.
Budget for Offers
The success of Groupon and other daily-deal sites shows the power of an offer. The best B-to-B retailers already knew this. Of course, if you're selling a commodity product on lean margins, discounts can be impossible. However, there are other things that you can test. Free tote bags, MP3 mini players, loss leaders, merchandise bundles and shipping sales are just a few things that come to mind. You'll want to budget for your offers and build them into your ROI projections. This way you know what you can afford.
While acquiring customers costs money, retaining them makes money. As a result, optimize your customer retention for maximum profit.
Acquiring customers costs you money this year but makes you money next year. Project your ROI for customer prospecting beyond acquisition and into retention.
Refer to the merchandise section. If you're not selling what people want with an appropriate value proposition, your efforts at branding are worthless. On the other hand, if you have a successful merchandising concept, you want to make sure that your brand appropriately reflects it. Consumers put your company in a box, so you might as well tell them which box it should be. The key to good branding is that it identifies what you're already doing.
Make sure your site search works every time. Run it through a variety of scenarios. If you're not finding the correct product, you can be sure visitors aren't either. Make sure that the shopping experience you provide online is easy, then focus on search engine optimization. There's no point in driving traffic to your site if once they get there they can't find what they want and have trouble shopping.
The best B-to-B practice for catalog design is to watch your pennies on creative, especially if you have tight margins. Focus first on your pagination and product groupings. This up-front organization can solve multiple problems long before your designer even starts on the project. Next, emphasize solid, benefit-driven copy and clean photography and design.
Though you need to keep your costs down, top B-to-B catalogers don't allow their design to grow stagnant; they're constantly evolving it with a purpose. Small changes such as adding drop-heads, positioning product on the outer edges of pages and making sure that each spread has a hero product on it can significantly improve your customers' shopping experiences.
Make it Easy
There's a principle taught in economics called utility, which refers to the ultimate satisfaction that a customer receives from consuming a product or service. There are lots of ways to measure utility, and one item that offers you utility may not offer any to someone else.
However, there's one thing that everyone loves — having their tasks made easy. Here's the secret that all of the top-performing B-to-B companies know: The company that's the easiest to shop wins.
A columnist for Retail Online Integration, George founded HAGUEdirect, a marketing agency. Previously he was a member of the Shawnee Mission, Kan.-based consulting and creative agency J. Schmid & Assoc. He has more than 10 years of experience in circulation, advertising, consulting and financial strategy in the catalog/retail industry. George's expertise includes circulation strategy, mailing execution, response analysis and financial planning. Before joining J. Schmid, George worked as catalog marketing director at Dynamic Resource Group, where he was responsible for marketing and merchandising for the Annie's Attic Needlecraft catalog, the Clotilde Sewing Notions catalog, the House of White Birches Quilter's catalog and three book clubs. George also worked on corporate acquisitions.