State of B2B Direct Marketing

State of B2B Direct Marketing Presented to the BMA Norcal Chapter August 24, 2005 Moderated By: Laurie B. Beasley,President, Beasley Direct Marketing, Inc. Panelists: • Bill Mirbach, Vice President of Direct Marketing, Intuit • Katherine Van Diepen, Director of Marketing, Anritsu Corporation • Erin McCart, Senior Marketing Campaign Manager, EMC Corporation Agenda 11:45 am – 1:30 pm • Direct Marketing Industry Perspective • Presentations by our Panelists: – Bill Mirbach, VP of Direct Marketing, Intuit – Katherine Van Diepen, Director of Marketing, Anritsu Corp – Erin McCart, Marketing Campaign Manager, EMC Corp. 1:45 Direct Mail Workshop • • • • • Direct Mail Formats that Work – And Why Where to Start – Regardless of the Media Creative Testing – What Works and Why Getting Through to the CXO Audience What To Do When the Product is New…or “so-so” • Email Made More Effective – You’re going to send them along with your direct mail, right? • Print Ads, etc. Is Email or Direct Mail Getting a Better Response? ………….Neither! Industry Perspective • While Internet gets a lot of attention, and e-Mail is a hot topic... • Telemarketing dominates B2B marketing response to house files… and prospecting isn’t much different: – – – – Telemarketing 6.44% Email 5.93% Dimensional Direct Mail 5.53% Flat Direct Mail 3.10% B2B Lead Generation Results by Media Media Direct Mail List Source House Prospect Total # in survey # 11.00 18.00 25.00 5.00 4.00 7.00 16.00 19.00 33.00 1.00 5.93 1.60 2.68 0.00 13.71 17.45 16.13 100.00 $31.47 $1.46 $16.16 $0.04 $40.65 $0.73 $0.60 $0.05 $17,119.13 $7,007.81 $28,522.00 $1,000.00 $342.09 $156.51 $253.38 $1,200.00 48.40 2.00 26.90 0.80 Response Conversion Rate Rate % % 3.10 1.40 1.73 1.60 2.31 1.50 5.53 4.37 4.57 7.90 2.20 4.70 Revenue Per Contact $ $10.02 $14.73 $16.99 $141.00 $11.00 $102.29 Promo Cost Per Revenue Per Contact Order $ $ $2.31 $19,857.50 $1.36 $19,178.35 $1.60 $17,966.59 $6.99 $5.46 $13.11 $130,925.00 $8,783.33 $103,757.14 Cost Per Lead $ $489.99 $207.26 $301.14 $972.32 $1,755.07 $1,610.10 ROI Index # 4.30 10.80 10.60 20.20 2.00 7.80 Dimentional House Prospect Total Catolog House Prospect Total House Prospect Total Total E-Mail Inserts/Co-op mailings Coupons Telephone Total House Prospect Total Circulation Circulation Circulation Reach Reach 1.00 11.00 7.00 17.00 1.00 1.22 6.44 7.30 6.01 5.13 20.69 17.42 20.29 $5.62 $2,123.47 $197.42 $1,450.92 $0.47 $6.02 $11.24 $7.75 $9,000.00 $94,962.50 $19,391.67 $17,500.00 $38.46 $180.69 $134.55 $164.58 12.00 352.80 17.60 187.20 Newspaper Magizine FSIs DRTV Radio 0.87 10.00 $0.90 $0.07 $1,350.00 $10.00 12.90 Advertising Spending (and Projection) Direct Marketing Media Expenditures for Consumer and B2B (Billions of Dollars) Annual Compound Grow th Direct Mail Telephone Marketing Newspaper Magazine Television Radio Other (Internet) Total 1995 $32.90 50.2 13.1 6.7 14 4.4 10.5 $131.80 1999 $41.40 67.5 17.3 9 20 6.9 14.5 $176.60 2000 $44.60 73.2 18.4 9.8 21.9 7.7 16 $191.60 2001 $47.40 78 19.6 10.5 23.5 8.5 17.8 $205.20 2005 $60.70 100.6 25 13.3 30.6 11.6 27.7 $269.70 95-00 6.30% 7.8 7 7.9 9.4 11.8 8.8 7.80% 00-05 6.40% 6.6 6.3 6.3 6.9 8.5 11.6 7.10% Highlights from the DMA 2005 Postal and E-Mail Marketing Report • Postal Mail on the Upswing. – Interestingly, the % of marketers in 2004 who planned volume increases for direct mail (64%) almost matched results from DMA’s 1998 survey – prior to economic downturn– in which 67% predicted increases. • A Perspective on Postal vs. E-Mail Qty: – Postal mail 3 million pieces annually – E-Mail 1 million messages annually Highlights from the DMA 2005 Postal and E-Mail Marketing Report • Use of Outside Prospecting for Postal Mail Returns to Pre-Economic Downturn Levels. – Outside list usage growth: 28.4% in 2002; 36.3% in 2003, and to 45.8% in 2004. • Marketers Grow Much More Conservative of Outside E-mail Lists. – List quality and drop in response rates given as reasons for hesitancy to use outside e-Mail lists. • E-Mail & Postal Housefiles Much More Actively Used. – Cost effectiveness of housefiles and the ability to segment by recency, frequency, and monetary value (RFM) listed as reasons for increase. Highlights from the DMA 2005 Postal and E-Mail Marketing Report • Recent Postal and E-Mail Response Performance Results Show Significant Improvement – For postal mail the turnaround started in 2003, as 42.8% of respondents reported increases in upfront performance over the previous year, and 52.4% reported increases for 2004. – For e-mail, the percentage of respondents who reported increases in up-front response performance grew from 35.2% in 2002 to 42.7% in 2003 and 51% for 2004. Highlights from the DMA 2005 Postal and E-Mail Marketing Report • Conclusion: Aggressive Plans to Increase Postal Mail and e-mail Volumes for the Purpose of Generating Orders, Leads, We, and Retail Traffic. • See Chart on Next Page Comparison in Intended Purposes for Postal and e-Mail Mail Type Postal Mail Purpose of mail Order Generation Volume to Customer File Year % Volume Increase % Remain the Same 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 39.2% 47.0% 38.4% 49.9% 27.9% 47.8% 27.8% 56.3% 11.8% 24.6% 33.9% 50.0% 55.4% 36.1% 51.1% 34.0% 66.3% 41.5% 69.6% 32.2% 84.9% 56.7% 63.0% 38.2% Volume to Prospect File Lead Generation Volume Web Traffic Volume Retail Traffic Volume Loyalty Retention Volume E-mail Order Generation Volume to Customer File 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 59.0% 60.0% 42.4% 43.9% 46.9% 48.4% 39.8% 63.9% 16.4% 31.2% 46.7% 57.1% 39.7% 34.3% 54.9% 44.7% 52.4% 43.2% 57.1% 23.3% 82.0% 54.1% 51.1% 33.6% Volume to Prospect File Lead Generation Volume Web Traffic Volume Retail Traffic Volume Loyalty Retention Volume Cost Per Lead Often Compells the Media Choices