Live From DMA06: How to Sell to Institutions

The nation’s institutions–which include everything from schools to hospitals, city and county governments, libraries and religious institutions, represent a $4.1 trillion annual market, are largely resistant to recessions and very often are predictable steady buyers of products. But they’re not as easy to reach as some might think , said Mary English, assistant director of strategic alliances at MCH at a session Tuesday morning.

Institutional buyers do behave differently from businesses since they’re governed by a different set of accounting principals she noted. For example, most businesses want to save as much money as possible to improve their bottom line performance while institutions must spend their entire budgets within their fiscal years or risk losing that money during the next fiscal year, she pointed out.

For this reason, it behooves catalogers target school districts, say to mail between April and June, when their fiscal years typically end, she said. “You’re not going to reach a school principal in August,” she said.

In addition, institutions have concentrated buying power and marketers can spend less money targeting purchase influencers and buyers than in companies. But, she warned, just sending catalogs to purchasing managers is not likely to result in many sales because they don’t typically know who needs what and when in their organizations.

To get at colleges and universities, mailers are likely to do better targeting deans and department heads, she said. Similarly, marketers looking to penetrate elementary and secondary schools should target principals and, in some cases, individual teachers, said English.

One of the more trying problems in targeting institutions is the inadequacy of he Standard Industrial Classification (SIC) code which is no longer sufficiently detailed to uncover the right prospects, she noted. “Institutions are covered by only 50 SIC codes but account for one third of the Gross Domestic Product,” she said. Part of the way around this is to investigate the numerous specialized databases that exist in the institutional field, she sai