Credit to Rick Kean, CBC, Managing Director of the Business Marketing Institute, LLC www.businessmarketinginstitute.com

Marketing professionals and sales teams are partners, (at least in theory) and now, more than ever, keeping the relationship between the two in-sync and productive is absolutely critical to success.  It’s supposed to work like this: Marketing sets the stage, creates a positive perception, and generates the lead through the marketing program, but ultimately it takes the Sales team to get the order. Likewise, a Sales team talks value, solutions, numbers and provides promises of delivery, but it relies on Marketing to build a clear understanding of the company, its reputation, its products and its place in the market. Marketing establishes the right enviornment for Sales. But several things have to happen to get us on the same page, and as a marketer, this is your responsibility:

• Marketing Managers must tap their sales teams for information: Information-sharing is a good thing. The Sales force has to be an information source for marketing, and define the selling problems for each particular type of customer or potential customer. Marketers, in turn, need to actively solicit information and give that information the weight it deserves when making decisions on the marketing program.  Customer Relationship Management (CRM) systems make this easier to accomplish. By having everyone use the same data, full accountability becomes possible. And that information makes it easier for everyone to see which marketing activity is actually responsible for a given sale;
• Marketers must  be active throughout the entire sales cycle: The marketing department must become involved in the selling process, and must dramatically and effectively communicate product and service benefits (value) to the prospect to help prospects become informed potential customers. Getting Marketing involved in the core of the sales process expands Marketing’s mission, and lets the Sales department gain a fuller appreciation of what Marketing does. It also gives Marketing a better understanding of the challenges faced by Sales;
• Measurement doesn’t stop at counting sales leads: Way too many marketing teams focus on just the first two steps in the sales process—awareness and consideration—yet do nothing for the preference and purchase phases of the marketing process. We take comfort in the belief that our job is primarily to influence success, not to drive it. So it’s entirely possible, at least in our own minds, to claim success for a marketing program without seeing a direct net increase in sales;
• Chasing fuzzy concepts makes Marketing irrelevant to Sales: When marketing becomes less about top-line revenue (i.e., sales) and more about “brand” or “awareness,” linkage to the sales team’s need to actually drive revenue breaks down. And then the inefficiency starts to occur as Sales, left without any real support on the preference and purchase phases, creates its own marketing services organization, often referred to as “field marketing.” The time has come for B2B marketers to show they can build programs that drive a sales number; Getting it done makes marketers instrumental. If we want to elevate our status from corporate bullhorn to driver of our company’s go-to-market strategies and tactics, we need to focus on two core goals: 1.) Feeding the sales machine today, and 2.) Driving the strategic push to define what’s next. In other words, we need to be doers, not dreamers.

It’s becoming widely accepted that the most effective measure of marketing ROI is its impact on sales. Marketing should be viewed as an enabler, not part of the power struggle. Because Sales, not Marketing, is rightly or wrongly perceived as the function responsible for generating revenue, in any company where Marketing ceases to become an enabler and focuses more on power struggles with Sales, Marketing will lose. And as a marketer, you can significantly increase your job security by aligning with and supporting the sales organization. For marketing managers and those on the agency side who serve them, delivering results matters. So does thinking strategically, being persuasive, politically adroit, and having a significantly broader organizational awareness. So, you can forget the theoretical marketing mumbo-jumbo espoused by consultants and the writers of marketing textbooks. Supporting Sales is Marketing’s real job, and, as a marketing professional, your company’s sales staff is your number one client.

Rick Kean, CBC, is Managing Director of the Business Marketing Insitute, LLC www.businessmarketinginstitute.com

Despite high interest in database marketing (DBM), many marketers still have not implemented DBM. One of the reasons for this is a lack of practical information. Depending on your objectives, you should consider one or more DBM strategies including:
1. Segmentation
2. New Customer Acquisition
3. Customer Penetration
4. Customer Retention
5. Marketing Intelligence
6. Measuring Results

Step 1 – Segmentation

Segmenting customers and prospects into various classifications is the first step in DBM. The most basic level of segmentation involves classifying, coding or sorting customers and prospects by type, size or potential. Business marketers can utilize Standard Industrial Classifications (SIC codes) established by the federal government to categorize most business types. Other typical classifications include sales revenue, employees, product purchases, purchase interest, etc.

A higher level of segmentation involves profiling, scoring, or modeling of customers and prospects. Profiling identifies frequencies (percentages) of different categories, for example, financial services comprise 17% of XYZ Corporation’s customer base. In addition, the 80/20 rule can be illustrated utilizing percentages, for example, 80% of XYZ profits are derived from the top 20% of customers.

Scoring, as the name implies, ranks segments or individual customers by some predetermined criteria, often sales or gross margin contribution. Dividing the ranked list into three groups is common to identify heavy, moderate, and light users. Mail order marketers utilize RFM, that is recency, frequency and monetary or transaction value, as criteria for judging customer worth.

Modeling employs statistical techniques like multiple regression to identify factors that correlate to high sales potential or likelihood of promotional response. Prospective customers can then be “fitted” to these models to determine which prospects should be priorities.

Step 2 – Customer Acquisition

Identifying and communicating with high potential prospects is a goal of most marketers. The segmentation tools described allow you to focus on prospects that are “heavy users” or that fit predetermined criteria. DBM can be utilized to identify new customer “gains”, and to track trends in new customer activity. Finally DBM can be used to target and manage prospect communications, marketing, and sales programs.

Step 3 – Customer Penetration

What is your “account penetration” level by customer? DBM can help identify penetration by comparing transaction data to total customer purchases. In addition, modeling “ideal” product mix by customer type will identify cross-sell and up-sell opportunities. Again, the segmentation step can identify opportunities.

Step 4 – Customer Retention

Strategies in this area have grown in importance since the high cost of new customer acquisition has been well documented. DBM can support the identification of lost customers to be reclaimed, dormant customers to be reactivated, as well as the Lifetime Value (LTV) of customers. DBM often is the foundation for implementing loyalty building strategies including continuity or points programs, recognition, and other value-added marketing or sales programs.

Step 5 – Marketing Intelligence

Sometimes a by-product of DBM is the ability to utilize the database as a marketing intelligence device. Segmentation supports intelligence gathering. Often a customer record will include unlimited text entries. Remote database access and “real-time” updating reinforce marketing intelligence applications.

Step 6 – Measuring Results

Tracking of marketing, sales, advertising and communications program results is possible by “capturing” customer/prospect responses, transactions, etc., in the database. Updating customer records allows the database to remain “fresh”. In addition, coding and sorting allows for the testing of alternative programs or offers, with responses carefully measured to support ongoing improvements.

Why Database Marketing?

Database marketing promises to deliver more effective marketing and communications, first by improving customer understanding through segmentation, and then by using this information to communicate with customers in a targeted, even personalized, way. At least six DBM strategies should be considered including segmentation, customer acquisition, penetration, retention, market intelligence and measuring results.

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