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How do You Get
the Most Out of a Limited B2B Marketing Budget?
By John Coldwell
Lesson 1
If you really
are in B2B then you will know all of your customers
pretty well because they’ve been placing orders with
you for a while and should continue placing orders with
you for a good while longer.
The reality is that many salespeople, for
whatever reason, not only don’t like administrative
tasks such as maintaining databases but also regard
their customers as their customers, not the businesses.
Action Point
Ensure that your
business keeps an up-to-date record of the most
important decision makers and key influencers. If you
must, give the database an unthreatening title, such as
the Christmas Card List. Cost: £nil
Lesson 2
Just who are
your most important customers?
Are they the customers that spend the most with
you? Are
they the ones that give you the biggest margin or the
most profit? Or
are they the organisations that you currently do some
business with but could do a lot more?
Action Point
Make it clear to
the sales teams exactly which type of customers are
important, and what sort of mix is required, and why.
You might need the large accounts to pay for the
overheads, the high margin accounts to contribute to
profits and the growth potential accounts to fit into
the growth plans you’ve got. Not to mention the
inevitable customer churn.
Once this is done, the Director of Sales can
manage how time, effort and resources are spent, making
sure that they are in line with your plans.
Cost: £nil
Lesson 3
We all need to
sell more to stand still because of the nature of
customer churn. When
pressurised into producing Growth Plans we must always
bear in mind the “hierarchy of risk” map.
This hierarchy goes in three stages.
Low risk is
selling more to existing customers.
Medium risk is
selling your existing range to new customers and selling
new stuff to existing customers.
High risk is
selling new stuff to new customers.
The safest route
to take is to sell more to your existing customers and
the easiest way of doing this is through the Windows of
Opportunity.
Action Point
Take the list of
your Most Important customers (the Christmas Card List),
perhaps also using Pareto’s 80:20 rule to refine the
list still further, putting the names in the left hand
column. Then,
across the top, list out the products or services that
you offer. This may be Nuts, Bolts and Washers; Vales,
Pumps and Actuators; or PR, Copy Writing and
Consultancy. Now, against each item in the matrix, put the estimated level
of penetration (or wallet-share) you have with each
customer against each product or service you offer.
Show this as a rough percentage – 100% or 80%
or 30% - something simple that everyone can understand.
You might need help from the sales people on
this. Better
still, use the delivery drivers. They often get to see
the inside of the customers’ warehouses and they know
who’s buying what from whom. This is your Window of Opportunity. Cost: £nil
Lesson 4
So far this
exercise has cost you nothing but time, effort, and the
embarrassment of not having this vital data to hand in
the first place. We
should now have on a single spreadsheet a list of the
decision makers and key influencers at your most
important customers, cross referenced with who buys what
and how much of their spend you’ve got.
This list needs to be prioritised a bit further.
Action Point
Take the list of
customers and add a column for Annual Revenue. This can
be for last year, or the last twelve months, or even the
last six months annualised. Now sort the list with the
highest revenue customer at the top. Cost: £nil
Lesson 5
Fine-tuning the
list based on the Windows of Opportunity can have a huge
impact on the direction of the business as a whole. It
is best to take the whole figure for penetration rather
than the individual scores for each market segment, as
this next stage doesn’t want to get too messy.
Action Point
Create a new
column entitled Overall Penetration and stick to simple
percentages such as 50% or 75%. Now divide the revenue
by the percentage figure and the result should be the
account potential. Sort the spreadsheet again, with the
highest potential, shown in Pound Notes, at the top.
This should be a list of your softest targets.
Cost: £nil
Lesson 6
We’ve touched
on customer churn already in this exercise. Some churn
is unavoidable – mergers, acquisitions and
bankruptcies all contribute – but in general at least
two-thirds of customer migration can and should be
caught before it happens. If you have a churn rate of 15%, it should be possible bring
that figure down to just 5% within a few months, thereby
putting an extra 10% on revenue forecast.
Action Point
To do this you
need to Listen to your Customers.
Find out their little niggles. Find out whether
there are any personality clashes between your sales
people and their buyers. Find out what is stopping them
from giving you all of their business; from passing you
on to other buyers of your goods and services within
their organisation. And find out what issues might be
driving them to look elsewhere.
JOHN COLDWELL
Managing
Director
InfoQuest
Customer Relationship Management Ltd.
The Old Chapel
Chapel Hill,
Clayton West
Huddersfield
HD8 9NH
UK
Tel.: +44(0)
1484 868390
Fax:
+44(0) 1484 868391
E-mail:
jc@infoquestcrm.com
Web: http://www.infoquestcrm.com
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