Why They Work: The pros of using B-to-B compiled lists far outweigh the cons

you’ve heard the complaint before. Perhaps you’ve voiced it yourself. Compiled business-to-business databases aren’t that great.

Right?

Wrong.

Savvy business-to-business direct marketers know how to make compiled lists work for them.

Ruth Stevens, head of the Direct Marketing Association’s Business-to-Business Council, as well as senior vice president of direct marketing at Cybuy Inc., New York, explains the background.

“Traditionally, business-to-business lists are approached from two points of view. The house file – usually built from the contact lists of the sales force – and compiled files. There are not a lot of business response lists available for rent. They are considered extremely valuable and are not exchanged as freely as such lists are in the consumer world,” Stevens says.

She goes on to add, “If you’re targeting, say, wallpaper manufacturers, the best way to reach them would be through compiled files – from an association, a directory or by SIC code.”

While compiled files are, in general, much more valuable to business marketers than to consumer-oriented firms, one of the central issues for business marketers is “names currency.”

“Business files tend to degrade very rapidly, about 3% per month,” Stevens explains. “That’s about one-third a year.”

She points out that business-to-business marketers have techniques to overcome such problems.

Bernice Grossman, president of the DMRS Group, New York, adds that a business-to-business marketer may have difficulty getting telephone numbers or e-mail addresses from a business magazine, if the marketer can get any data from such a magazine.

“There’s a high level of discomfort,” she notes dryly about the details marketers want to get.

And such data is often missing from a marketer’s own files. “When they started capturing data about their own customers, they didn’t ask for information that wasn’t necessary,” she says. “Now they want to use those channels and they have to go somewhere to get them.”

Compiled files, she adds, will probably have the best SIC codes, levels of accuracy, and what she calls “best meaning.” In contrast, mail order sources – a subscriber list, say, or corporate donors – will rarely have complete information.

“If you look at the entity called a company – and forget about mergers, acquisitions, and that no one knows who anyone is today or tomorrow – the name of the company, the SIC code, number of employees, items like that – don’t really change. Information changes about individuals within the company.”

Most compiled lists do not have names of individuals much below the corporate level, she notes, and getting such details can be problematic. Purchase records would be one source with a high likelihood of accuracy.

Of course, a marketer could test – something she often advises clients to do – but she would first look to see which lists a client is using and find out how many names and titles are already available. She adds that when a marketer is selling by telephone, for example, the name and title aren’t what matters. It’s whether he or she can make the decision to buy. The marketer wants to get that person, and then wants the name and title.

Grossman also says the smaller the company the higher the title, and the bigger the company the lower the title. She advises clients to make a grid. If it turns out that, say, 85% of the customers have less than 10 employees, then the marketer should target the company president.

John M. Coe, DB Marketing Associates, Scottsdale, AZ, implies that national compiled lists are more accurate than yellow pages, which are 15% inaccurate by the time they’re published.

“There are two leverageable pieces of information,” Coe says. “What line of business is it – is it a quick printer or a maid service? And what is the number of employees?”

Since approximately 99% of the businesses in the United States are privately held, the number of employees is a more accurate way to judge the size of a business than annual revenue, which is often unavailable.

A common procedure in the compiled environment is to take a customer list and do data enhancement to extract the exact size and industry. While he agrees with Grossman about the inverse relationship between the size of the company and the rank of the purchasing decision maker, Coe notes that the smaller the company, the more likely a misaddressed piece will be forwarded to the right person, and the larger the company the more likely the piece will be thrown out.

COMPILED LISTS ARE:

– Cleaner than mail order lists

– Better at delivering SIC code information

– More accurate on size and the number of employees

– Cover a larger universe

– Cheaper