GETTING THE MOST OUT OF SECONDARY MARKETING RESEARCH SOURCES: A GUIDE FOR SMALL BUSINESSES
by Richard James Bilodeau, 1998 M.B.A. Graduate, University of Southern Maine, and Jeanne Lauren Munger, Assistant Professor of Marketing, University of Southern Maine
Introduction
New customer development is one of the most important activities in which businesses can engage. Few businesses can thrive without winning new customers to sustain and eventually increase sales. Yet, many small-business managers lack familiarity with the basic steps involved in attracting them, and do not know of publicly available sources that can provide potential business leads. In spite of this, small-business owners have at their disposal the means for skillfully gaining new clients.
Secondary Marketing Research Sources
Secondary marketing research sources can productively yield data to shape databases for business-to-business marketing campaigns. These sources, which contain various types of demographic information about individual companies and contacts, are available from a variety of public sources. These include federal and state publications, trade association guides, chamber of commerce participant lists, and professional registers. Most of these sources are readily accessible from local libraries, chambers of commerce, and the Internet. (Samples of secondary research sources for Maine-based companies are contained at the end of the article.) Given the wide availability of this information, small-business managers can easily generate extensive business-to-business promotions.
Although certain aspects of the research process do not present great difficulty, small businesses must deal with many factors when using secondary research as a means for gathering marketing information. One of their biggest challenges is that available information is not always accurate. This is particularly problematic to the small-business manager relying on the currency and accuracy of all information used. Although publishers of this information attempt to keep it up-to-date, an ever-changing business environment often results in inaccurate company information.
Using Secondary Sources in a Small-Business Setting
During the summer of 1997, two M.B.A. students assisted a local-area small business in the creation of a database to be used in a business-to-business direct-mail campaign. This experience will be described to highlight the basic steps that a small-business manager might use in setting up an accurate database of new customer leads, and to identify several types of publicly available sources that might be utilized in the process.
For this specific project, we used various sources for secondary marketing research to establish a listing of prospective new customers. Companies were first screened based upon a set of desirable characteristics identified by the business manager. For those matching the desired profile, we collected from these sources the company name, address, phone number, Web address, contact name and title, and business descriptions, which we entered into a database. When relevant, we also gathered additional company information. The sources for this information were relatively current, with copyrights between 1994 and 1997. After careful review, 228 potential targets were identified for the mailing.
Before sending the mailing, we decided to first verify the information obtained from these sources. The task of calling all 228 companies in our marketing database, while tedious, was worthwhile. As a result of making these calls, we were able to correct inaccuracies in our marketing database. Much to our surprise, almost thirty percent of the information we had gathered in our marketing database was inaccurate. The table below summarizes our findings:
| TYPES OF INACCURATE INFORMATION OBTAINED FROM SECONDARY SOURCES (based on 67 cases *) | ||
| Type of Inaccuracy | Percentage | Number |
| Wrong contact person listed | 20.9% | 14 |
| Company address incorrect | 16.4% | 11 |
| Both company address and phone number incorrect | 14.9% | 10 |
| Company closed / went out of business | 11.9% | 8 |
| Company changed type of business | 10.4% | 7 |
| Company phone number incorrect | 7.5% | 5 |
| Company name had changed | 7.5% | 5 |
| Wrong title listed for contact person | 6.0% | 4 |
| Company relocated out of area | 4.5% | 6 |
| TOTAL | 100.0% | 67 |
| * A company with more than one inaccurate piece of information was only counted once. For example, if a company changed the type of business in which it was engaged and therefore changed its name, it was only counted once as changing its business type. | ||
There were four major advantages to making these phone calls. First, it allowed us to introduce ourselves and let the company know what to expect in the mail. Once this initial contact was established, it paved the way for follow-up phone calls.
Second, by confirming data, it enabled us to enhance the professionalism of the mailing that was ultimately sent. A survey conducted subsequent to this mailing revealed that more than half of the company contacts surveyed (53 of 96) judged that direct mail pieces containing demographic errors were unprofessional. Given the large number of business-to-business direct mailings the average company receives in a day, one that is demographically correct may stand out in a pile of mail. Furthermore, mail directed to people who no longer work for a particular company is often never opened.
A third major advantage to making these calls was linked to the customized nature of the mailing. The centerpiece of the mailing was specifically tailored for each individually targeted company based on its characteristics gleaned from the information sources. The actual printed materials were different for each company, and a customized Web site was also developed based on the individual characteristics of each business. Promotions that target business practices no longer used by the company would not provide an enticement.
Last, the cost associated with developing highly targeted print and Web promotions is significant. If nearly thirty percent of the material sent never reaches the prospective target, the expense involved with generating new business unnecessarily increases. Before proceeding with very sophisticated, time-consuming, and costly direct mailing campaigns, it is important to verify that the information gathered about potential clients is correct.
Guidelines for Developing an Effective Program
From this experience, we would make the following five recommendations when using secondary sources of marketing information to gather leads for business-to-business direct mailing campaigns:
Use the most recent source of information. When gathering demographic information about companies, always check to make sure that you are using the most recent copies of professional registers and of federal and state publications. If the library does not have the most up-to-date sources, arrange to order them via interlibrary loan. Also, many of these sources are now available on the Internet, so do not forget to consult the Web. The local chamber of commerce is also a good place to check for the most current information about businesses in your area.
Cross-reference information from more than one source. Consider a variety of sources for information on a single company. For example, look up potential customers in both trade association guides and professional registers. Note inconsistencies in the company information contained in various sources. Be sure to resolve any informational inconsistencies before entering information into your marketing database.
Where available, visit the Web sites of potential customers. Many businesses, large and small, have company Web sites. Since the Internet is a vehicle for obtaining information about companies, these sites frequently contain current company contact information. Companies that rely on Internet business frequently update their Web pages, so the most current data is often available on these sites.
Always call potential leads. As stated earlier, calling is important for a variety of reasons. The call serves as an opportunity to introduce your company, to gather accurate demographic information about potential leads, and to establish contacts with potential customers. This first call can frequently open a dialogue between your company and potential clients, and such clients may possibly come to anticipate follow-up print materials. If you can engage a potential new customer during this information verification phone call, that individual may actually look forward to receiving your mailing.
If a contact explicitly states during that first phone call that they are not interested, do not follow up with the mailing. One surprise we encountered was that many companies still sent print materials to prospective customers who told them over the phone not to bother. The majority of those receiving materials under these circumstances dispose of them as soon as they are received. When a prospective customer is not interested, save your resources and do not send them printed materials. That lead can be retained in your marketing database, for future direct mail campaigns.
Conclusion
Secondary sources of marketing research can be used effectively to gather information for business-to-business direct-mail campaigns to generate new business. This campaign resulted in a forty-percent response rate, yielding a number of new clients. The campaign was successful, due in large part to the process ensuring accurate information. Although gathering and verifying this information may seem daunting at times, it is time and money well spent to generate new business.
Reference
Holly Edmunds, AMA's Guide to Small Business Marketing Research (Lincolnville, IL.: NTC Business Books, 1996).
SAMPLES OF SECONDARY RESEARCH SOURCES FOR MAINE-BASED COMPANIES
Regional directories will often provide the company name, address, officers, number of employees, sales figures, and products or services the company provides. The following exemplify such directories for Greater Portland and Maine:
Directory of New England Manufacturers (imprint information varies widely) -- lists manufacturers alphabetically, geographically, and in a classified arrangement.
Directory of Maine, New Hampshire, and Vermont High Technology Companies (Boston: Mass Tech Communications, Inc.).
Directory of Suburban Portland, Maine (Portland, Me. : Tower Publishing) -- a classified list of businesses.
Enterprise : A Comprehensive Directory of the Greater Portland, Maine, Business Community (Portland, Me. : Tower Publishing, 1986- ) -- a directory of the greater Portland business community. Lists companies alphabetically and in a classified arrangement.
Greater Portland, Maine, City Directory (imprint information varies widely) -- a classified list of businesses.
Maine Business and Professional Directory (Portland, Me.: Tower Publishing, 1990- ) -- lists companies for the entire state both alphabetically and in a classified arrangement.
Maine Manufacturing Directory (Portland, Me.: Tower Publishing, 1986- ) -- lists businesses alphabetically, geographically, and by product code (SIC number).
Microcosm: Cumberland and York (Parsippany, N.J. : Library Markets, Dun's Marketing Services, 1989- ) -- lists basic company information for the two-county area alphabetically, geographically, and by product code.
Ward's Business Directory of U.S. Private and Public Companies (Detroit: Gale Research, 1990- ) -- lists companies alphabetically, geographically, by volume of sales, and by product code. A few examples of Maine companies found in Ward's include L.L. Bean, Dexter Shoe, Gannett Publishing, Cianbro, Rite Aid, Saco Defense, and Emery Waterhouse.