Customer Acquisition

On the surface it seems so manageable and straightforward. After all, BtoB marketing lists are certainly smaller than BtoC lists. The customer segments are fewer and it would seem that the opportunities for true one-to-one marketing are many. But BtoB marketing comes with some serious pitfalls. They are different than those presented by BtoC but nonetheless challenging.

I see three specific challenges that marketers will have to deal with in order to make BtoB marketing an effort that will yield real results in the form of lead creation and marketing ROI. 

Complexity of Transactions: BtoB is rarely a simple transaction. One to one consumer marketing is born out of the retail, direct to consumer world. In the pre-Internet days the biggest challenges associated with getting a direct marketing program off the ground was getting the data assembled, cleaned and standardized and pushed to a mailing house on time. As the process developed over the decades, this process became more commonly known as the Extract, Transfer, Load (ETL) process. At the end of the process, media would go out via postal service or phone and finally email. If all went according to plan, orders would come in through any one of the retail sales channels: store, customer service call center and finally Web. But BtoB companies are often selling complicated and more abstract things like “contracts” or “policies,” many products bundled together like chemicals or construction materials, or an even more abstract service. Typically, you want to have your marketing efforts driven by purchasing behavior and complex products and services make targeting those behaviors more difficult.

The introduction of the “organization” into the database adds a new dimension to the data, and a level of complexity. B2C data is relatively easy. The customer has a name, billing and shipping addresses, and a credit card number, with data integrity enforced in the transactional web environment or through a loyalty program where you can tie a card number or coupon back to the same individual each time. But in the BtoB world, you are selling to organizations rather than people. There is inevitably a many-to-many relationship between an organization record and a contact and resolving this not a simple matter. Add to this the layers of hierarchy in a company, divisions, acquisitions, satellite offices, home offices etc. and determining what contacts and addresses can be bundled together into a single sales opportunity is a formidable problem.

Measuring ROI is difficult under ideal conditions and in B2B can actually be contentious. In the B2C environment, there are opportunities for “explicit” measurement. Send an email, click on the email, place an order. This pattern is easy to track and search for in the B2C database and it is easy to create a link between the marketing effort and the result. In the B2B environment ROI has to be measured “implicitly” by guessing causality between outbound communications and a subsequent purchase. This is complicated by the fact the sale is closed by a sales team way downstream and potentially weeks or months from the initial marketing effort. Although many companies are working to close the ROI gap, it’s still an issue. B2B marketers need clear goals and clear outcomes before executing a plan and an agreed upon method for measuring success.  

The conventional wisdom is that anything a marketing team can do in the B2C world will translate to the multi-channel B2C environment, and possibly even be easier considering the smaller data volumes. That’s the myth. In reality, the challenges mentioned above are common stumbling blocks to launching a successful B2B marketing effort. The good news is none of these problems are deal breakers. A well designed and thought out process for managing these types of complexities can lead to profitable marketing programs.  

 

Some of us are marketers, but all of us are customers. As customers we have all had a broken customer experience, but as marketers its our job to make sure they don’t happen. But they do despite our best efforts.

For the more unfortunate and maybe even loyal customers in the crowd, it was as recent as today’s coffee, lunch, or online purchase. Regardless of how it happens, we see it all the time. A brand made a promise, got our attention and then when we acted on it. But it fell short. This could have been for a new brand, like an airline that we have never traveled with before. Or it could have been at the supermarket we have been shopping for years. But why did it happen? How can a brand that wants my business and yours drop the ball so badly and break their promise?

I’ve got some ideas. I feel that a broken customer experience has many reasons, and many sources. Yet the two that are top of my list today are as follows. The first is that the brand is more focused on customer acquisition rather than anything else. To do this they will dangle a carrot (metaphorically) out in front of me that is so temping that I cannot stop myself from reaching for it. Here’s an example: $100 round trip airline tickets from Boston to Denver. I like to ski. I want to go to Denver. Yet, when I go to buy my ticket, the offer is designed with blackouts, hidden costs, impossible connections and the like. It does not work for me, or anyone else. Broken customer experience.

The second is that the company doesn’t know it is broken. The grocery store knows who I am. I have a loyalty card. They have all my data and they know my behavior, yet they miss the mark on what they offer me. One recent example of this that I received an offer for baby items recently, like diapers. Yes I have kids, yet they were in diapers five years ago. Don’t appease a CPG client at my expense. Another broken customer experience.

In situations like this, the brand needs to think strategically, and then be able to act tactically, while doing both well. As always it seems to come down to data and the lack of it. Be smart, control your data, think about what it means at the human level and fix that broken customer experience. Nothing is more alienating.

Although we might want it to, building brand loyalty doesn’t move at the speed of technology. It moves at the speed of the customer. It’s important to remember this as mobile technology starts to round the corner. Mobile is a brilliant way to communicate with the customer and acquire customers. And like anything that has customer acquisition involved, data is essential.

We have seen some very smart mobile applications lately. Recognizing consumers' need to use mobile phones while shopping, Motorola has launched Mobile Loyalty Solution, which serves as an extension of existing loyalty card programs or as the basis for new digital efforts. The service eliminates the need for membership cards and paper coupons. More importantly retailers are using it to build a database of shopper product interests, purchase habits and preferences. The Motorola offering works with most smartphones, and will allows retailers to target consumers with the best offers and discounts on products that interest them. But let’s not forget smartphones are somewhere around 35 to 40 percent of your customers. It’s part of your customer base and will grow. Use data to track that growth.
The mobile loyalty programs are just starting to find a foothold in the QSR vertical loyalty programs, according to a 2009 report from information commerce provider First Data.

But they are starting to show themselves. Southern California pizza chain zPizza is implementing a mobile partnership with Mocapay, a Denver-based company that created a mobile platform for zpizza to use for loyalty and gift-card efforts. The platform allows customers to use mobile phones in place of plastic loyalty or gift cards. They can pay at point of sale and check card balances simply by using their phone.

Will it work? Depends how you define success. We encourage retailers in the QSR space to look hard at mobile loyalty programs for customer segmentation, and customer market research  as their customers integrate mobile commerce into their lives. Remember that the technology is not the driver. Remember that customer retention and engagement are the key drivers. Look at your customer data first, and proceed with caution.