Quick: what’s the hottest DM buzzword – the Web, CRM, viral marketing?
Actually, none of the above, to hear Direct Marketing Association president H. Robert Wientzen tell it. His choice is B-to-B.
“The business-to-business story is hot,” he said during the recent 12th National Direct Marketing to Business Conference in Miami.
B-to-B e-commerce is particularly popular, with estimated online sales last year ranging from $110 billion to $155 billion, about five times what consumers spent online, according to Wientzen. Those numbers are expected to top $7 trillion by 2004.
But while sales continue to rise, marketers face new challenges, including customers that are more in control, technology that continues to change rapidly and aggressive competition, Wientzen said.
“As the sun rises over the 21st century, there will be little room for error because your customers – business as well as consumer – are more demanding,” he said. “They want good prices, even better service, and dare I say, perfection. And if you can’t provide it they’ll take a hike.”
Wientzen outlined the following statistics as evidence of the industry’s overall success:
– U.S. sales among businesses are expected to hit $13.3 trillion this year, a number projected to grow 6% annually between now and 2004.
– Last year, Web sites accounted for $7 billion of online sales, an 85% increase over 1998. This year that number will hit $12 billion and may reach $53 billion by 2004.
– Direct and online marketing B-to-B sales are growing at a annual compound growth rate of 10.3%. Ten years ago B-to-B sales were $337 billion; they’re projected at $764 billion this year and $1.1 trillion by 2004.
– Direct response B-to-B spending is expected to reach $96 billion this year and to rise 7.4% annually over the next four years.
– Ten years ago every dollar spent generated $6.50 in B-to-B sales, compared with a predicted $8 this year. In 2004 that number is expected to go up to $8.75.
– B-to-B sales are growing in all major media, including direct mail, print, telemarketing, TV and radio.
Wientzen said the industry’s success is born of marketer’s knowledge and their ability to “move the goods from the mouse to the house.”
Network
