Ever since US department store magnate John Wanaker lamented in the early 20th century that "half my advertising is wasted, I just don't know which half,” clarity has a big problem for marketers. There are many ways of reaching and convincing customers to buy more of your product, but companies find it hard to decide what will work best.
For business to business (B2B) marketers there is a straightforward solution.
It is not a new viral marketing tactic, brilliant creative concept or clever pricing scheme. The magical answer to marketing murk is something deceptively simple, almost boring. The greatest tool a B2B marketer can have is a list of potential customers.
Agreeing on a market and building a list of all companies in your target market can transform a company’s sales.
I hear too often this tale of marketing. ‘I get business from referrals through my network – customers, partners, family and friends. I am not really sure ‘who’ typically buys our product but we get by with enough sales per month. We wait for the phone to call, not sure where the next sale will come from, but it seems to work okay.’
That is a business without a list. It will get by, but growing quickly or continuing to prosper when the economy tightens is difficult.
The list provides gives your marketing greater clarity and intensity.
It provides clarity around who specifically to target and confidence in the most effective tactics to reach them. Intensity because you focus your limited resources on a defined group of potential customers, you waste less marketing dollars on people who are never likely to buy your product.
Having the list gives a lot more certainty around marketing decisions and the associated investments. Tradeshows for example. Compare the previous year’s attendance register against your list. If a reasonable percentage of your list are attending it is a worthwhile investment. What about when that pesky advertising sales person calls every month, can his publication reach enough of your list to be cost-effective?
For many Kiwi companies, a list is the best possible way to tackle a big new market. It makes tackling giant markets like the US or the UK conceptually and financially achievable. Rather than wallowing around amongst tens of thousands of companies spread many kilometres apart, you can focus your activities on an achievable number.
Christchurch software company SSi Limited an example of the power of ‘the list.’
SSI have a software product for bakeries called GlobalBake, which they sell in New Zealand, Australia and the United States. Baking companies, typically those manufacturing in volume, use GlobalBake to improve the efficiency of their operations.
The company targeted the US market as likely place to achieve significant growth. As a relatively small company, they knew they couldn’t afford to simply ‘have a go’ at this super-economy. The US bakery industry has about 10,000 commercial and retail bakeries, with combined annual revenues of $27 billion.
Potential markets within the US were ranked based on their attractiveness and SSI’s ability to operate effectively in them. A priority market was identified and from this decision they researched and built a list of over 2,000 US-based targets in a selected number of states.
SSI have used this list to help focus their promotions, assess what trade events to attend and build partnerships with distributors. They are active in only part of the market but are making more progress faster than by just having a crack at the US in general.
How can you build ‘the list’?
Start with defining your market. Saying ‘the health sector in the US’ is not good enough. You need to understand your product and the potential market well enough to be a lot more specific. Defining what makes a market attractive (e.g. ease of access, openness to foreign products, short buying cycle) and your ability to execute (e.g. sales staff in that market, existing brand awareness, support capability) in that market are a good place to start.
Once you have done some work to understand the market opportunity you become more specific. ‘Privately owned heathcare providers with an annual turnover of more than US$200,000 in the states of California and Arizona,’ is a better place to start. Armed with that definition you can:
- Size your market – use the statistics department and other sources to at least understand how many companies you are looking at.
- Populate your list – look at associations on the internet, industry organisations or buy a list.
- Assemble contact information – over time start to collect a database of information about the companies – key people, major issues, potential partners, annual turnover etc.
You can then make this list your marketing world, focussing all of your time and effort on making it work. Once you have achieved good penetration in this list you can redefine your market and build a new list and so on as you grow.