Efficient B-to-B E-mail Marketing

We all want to do more with less these days. When you compare the cost of postal mail (about $1 apiece) to that of e-mail (about a penny per message) any B-to-B marketer is going to prefer e-mail for staying in touch with current customers and inquirers. A no-brainer, right?

But here's the rub: Most B-to-B companies have only some of their customers' e-mail addresses. Even worse, if their clients' privacy policies require opt-in, even fewer are e-mailable.

Consider Cicso Systems, the networking hardware firm. While 45% to 50% of its global house file contains e-mail addresses, only 29% are opted in. Doing the math, that's a mere 14% of the list that can be contacted by e-mail.

HOW DID IT HAPPEN?

Clearly a dire situation, especially when you're trying to cut costs. How did we get into this mess? There are a number of contributing factors, among them:

• Data decay

  We all know how volatile data is, especially in B-to-B. But an e-mail address is one of the most volatile elements of all. According to Kevin Akeroyd, vice president of global sales for online business directory provider Jigsaw, 32% of business e-mail addresses change annually (compared with 29% of phone numbers and 16% of postal addresses).

• Consumer-like privacy policies

  DATA APPENDING

  Business buyers need information to do their jobs, so they generally welcome relevant e-mail from their suppliers. But when e-mail policies were being established in the '90s, companies — especially big ones — tended to settle on opt-in as standard practice.

• Blanket opt-out

  In firms with many product lines, an e-mail opt-out in one category may be applied to messages about all items, further depleting the address pool.

• Least-common-denominator global standards

  Many companies have decided to comply with the most restrictive policies from any region — usually Europe — to do business consistently worldwide.

PERMISSION POLICY REVISION

Given all this, how can business marketers reach more of their customers by e-mail?

The cheapest and fastest way to boost an e-mail address collection is data appending. For pennies per record, you can expect to append valid e-mail addresses to about 10% to 30% of your file.

Some best practices:

• PROACTIVE ADDRESS COLLECTION

  Select a reputable vendor, such as FreshAddress, Walter Karl or TowerData.

• Only try appending on names you already have a business relationship with, like customers or inquirers. Appending e-mail addresses to prospect names, while tempting, should be avoided.

• Neither should you ask the vendor for e-mail addresses of additional contacts at sites where you do business. Stick to the contact names on your database.

• Once the appended e-mail addresses have arrived, treat them with care. Reggie Brady Marketing Solutions' e-mail expert Regina Brady suggests that the first few communications should explain why a contact is hearing from you. State the opt-out prominently at the top of the message.

Just as the B-to-B world has ducked the do-not-call list, it's time for business marketers to rethink their early decision to apply opt-in policies to e-mail.

RELEVANT COMMUNICATIONS

If I attend a trade show and exchange cards with a vendor, I fully expect to receive e-mail and postal mail from that company. As a business buyer, that's how I stay informed. So as long as opt-out is offered, and respected, it's my view that a business relationship implies willingness to receive e-mail, and that well-established opt-out standards (like notice and choice) should be the rule of thumb for business marketers.

It appears this view is gaining traction. Theresa Kushner, Cisco Systems' director of customer intelligence, says while her firm consistently has been an “opt-in company,” when it comes to B-to-B e-mail, opt-out is now “under discussion.”

Message Systems' chief marketing officer Dave Lewis believes that permission policies shouldn't be based on opt-in or opt-out but rather customer behavior. “The rule should be whether the customer is engaged,” he says, “as indicated by clicks, downloads, purchases and answering survey questions. For too long our focus has been on list size. We need to move toward list quality.”

When you look at the cost savings, the business case for aggressive e-mail address collection is clear. Educate your customer-facing personnel on the importance of gathering e-mail addresses, and weave a collection program into current business processes.

According to Robert McCarty, Cisco Systems' manager of marketing foundation data services, his company has a standard practice of outbound phone calls to its small and medium-size business (SMB) customers to gather e-mail addresses. The SMB marketing team also works with distributors and resellers, asking them to allow Cisco messaging to go to customers the distributor has permission to e-mail. With large accounts, calls are made by account managers who cover that company, but marketing provides them with suggested topics to improve the call's effectiveness.

Cisco doesn't offer incentives to customers to share their e-mail addresses, in compliance with certain countries' restrictions. “It's better to give a compelling, persuasive reason,” says Kushner. “We also promise that no salesperson will call.”

Here are some things to keep in mind about e-mail address collection:

• Explain to your customers the benefit of providing their address. Give a good business reason, like “We want to keep you up to date on new technical developments.”

• Service locations may actually be the most effective collection points, compared with, say, outbound marketing communications.

• Create a Web-based preferences page where customers can manage subscriptions and indicate the kinds of e-mail, postal mail and phone calls they'd like to receive.

• Avoid blanket permissions that apply across brands or business units. Lewis says, “The more options you give them, the happier both sides will be. You may find they'll decide to receive things they didn't know were available before.”

• Place an e-mail address-collection device both on your home page and well into your site. “Thanks to search engines you never know where people will enter your site. So be sure the e-mail sign-up is everywhere, including landing pages,” Brady notes.

RELEVANT COMMUNICATIONS

Stop blasting! Once you have an e-mail address, your mission shifts to maintaining its status — preventing that customer from opting out. So relevant, timely, targeted communications are a must. We all know this, but not all of us are doing it.

Tektronix, an engineering instruments company in Oregon, feels it's solved the relevance problem by communicating with customers using “incremental profiling.” Based on product interest, the firm sends an e-mail, or makes an outbound call, with an information-based offer.

For example, for customers who've indicated an interest in spectrum analyzers, Tektronix will offer a paper titled something like “Fundamentals of Real-time Spectrum Analysis.” If the customer bites, more detail is requested about product interests: Is the client looking for radar, surveillance, RFID, or other subtopics within spectrum analysis?

The result is better segmentation, greater relevance and, best of all, response. The program is delivering 46% clickthrough and 9% response rates, meaning the customer opened, clicked and took some action to continue the dialogue. According to Tektronix CMO Martyn Etherington, “We get not only high response rates but also a good, profiled database. The hard part, though, is the rigorous planning that goes into setting up the dialogue streams in advance. We involved our sales peers in developing questions for the e-mail conversations.”

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RUTH P. STEVENS (ruth@ruthstevens.com) consults on customer acquisition and retention, and teaches marketing to graduate students at Columbia Business School. She is the author of “The DMA Lead Generation Handbook” and “Trade Show and Event Marketing.”

Appending Tips

E-mail appending has matured dramatically since its early days. FreshAddress CEO Bill Kaplan offers three possible approaches:

• Send your house file to the vendor for matching against a large database of opted-in names. These are businesspeople who have given permission at some point to share their names, typically by having either checked — or not unchecked — a box indicating that they're interested in receiving e-mail from selected marketing partners. The match is done based on first/last name and company name/postal address.

• Append unmatched names using corporate domain pattern matching. Vendors do this in different ways. At FreshAddress it's optional. TowerData's B-to-B appending process consists primarily of imputed address formulation. You'll have to decide whether your company is comfortable with this practice.

• Match against an opt-in consumer e-mail address file. FreshAddress has 450 million consumer records, many of which identify small or home office operators and corporate employees working from home.

After the match, the next step is cleanup and validation. FreshAddress runs the matched e-mail addresses through as many as 20 hygiene and suppression processes, comparing them against the Federal Communications Commission's wireless blocked list, the Direct Marketing Association's do-not-e-mail file, spam traps, and of course house file opt-outs.

Finally, the vendor sends an e-mail on behalf of the client, selling customers on the benefits of receiving e-mail but offering the option to unsubscribe. Bounces and opt-outs are tracked and deleted, and the net names are run through the suppression process again to ensure they're as fresh as possible.

What append rates can you expect? FreshAddress averages 10% to 30% on B-to-B files, broken down as follows:

• 3% to 7% from matching against opt-in names.
• 6% to 18% from corporate domain pattern matching.
• 1% to 5% from consumer and small/home office matching. — RPS