Leading Questions: Chief Marketer’s First Prospecting Survey

EDITOR’S NOTE: A fuller discussion of the data revealed by the survey, including tabs for business type, annual revenue and industry verticals, is available at www.ChiefMarketer.com/research. Simply register with your e-mail address to download.

It’s become an axiom for these cost-conscious times: It’s cheaper to retain or reactivate a current customer than to acquire a new one. In recent quarters, marketers have taken that doctrine to heart and worked to optimize the lifetime value of the customers they’re already transacting and engaging with.

But eventually that prospect pool has to get refilled, if only from natural attrition. With that in mind, Chief Marketer fielded its first survey on prospecting and lead generation at the end of 2009, asking marketers how they view the strategic aims of finding new leads for their business, what channels they used to do so in 2009 and how they planned to change that strategy in the coming year.

Almost half of the more than 1,000 poll respondents (48.6%) said their main customer aim in 2010 will be to generate new leads, although one quarter of the response said they will concentrate on retaining the ones they’ve got. Those numbers showed significant variation by annual revenue, with businesses in the $5 million – $49.9 million annual revenue category showing markedly higher interest in prospecting than those at either end of the spectrum, where the care and nurture of existing customers will be a premium.

Asked what channels they used for prospecting in 2009, respondents showed a wide distribution across everything from direct mail to social media. While the plans they expressed for trends in customer acquisition should be taken as aspirational — a lot will depend on available budget, after all — the clear intention seems to be to increase the focus on drawing new customers through contest promotions, social media and affiliate marketing.

On the actual offers used to draw new customers, discounts led the pack in 2009 (92.2%). But asked what incentive they would deploy this year, discounts were the only category to show a decline (to 89%), suggesting marketers’ hopes that the need to eat into margins to draw new business may have ended.

When asked specifically if higher-value incentives will be required in 2010 to bring in fresh prospects, almost half the survey said no — but just short of one third hedged their bets and said the answer is still uncertain. That’s a large proportion of marketers who believe that finding new customers may get even more costly this year.

Our Chief Marketer Prospecting 2010 Survey then focused on channel-specific leadgen strategies in direct marketing, e-mail and social media. More than half the respondents using direct marketing said that carefully targeted prospect lists were their most important acquisition tool, with custom creative content a distant second.

But third-party list brokers may not find comfort in that response, since one-fourth of respondents also said that their entire 2009 acquisition list came from sources other than traditional brokers, and fully half said at least 50% of their names came from outside the list-rental infrastructure. The most popular source for names? Users registering online for information (used by 64.7% of respondents) and social media sign-ups (46.2%).

A surprisingly high proportion of respondents (66%) said they use currently use e-mail as a prospecting tool, and another 11% overall said they will begin to do so this year. Again, asked where they get the names for e-mail prospecting, the largest group of respondents (73%) said they came directly from the prospects via newsletter registrations and other sign-ups.

Those who told Chief Marketer they don’t use e-mail for acquiring customers were almost equally deterred by three obstacles: a lack of available names for mailing (32.8%), the notion that prospects don’t want to be contacted in that way (32.1%), and fear of earning the “spammer” label (31.8%). Only 15.2% said they were held back by a lack of expertise, and only 14.5%% said the cost of e-mail prospecting was too high for the promised return on investment.

Those results are almost the mirror image of respondents’ use of viral campaigns or word of mouth to unearth new customers in 2010; there, relatively few companies are doing it (22.4% overall), and uncertainty about how to get started is the most-often cited roadblock to launching an initiative in that channel (28.6%).

View the full downloadable report, including more charts at chiefmarketer.com/research