Targeting Institutional Names in a Consumer Prospect Universe

Most Business-to-Consumer ("B2C") direct marketers do their prospect merge/purges at the family level; that is, both the physical location and Surname must be the same for a duplicate situation to exist. This is because the cost-effective strategy for most B2C mailers is to send just one piece into a household at a time.

The following is an example of a "dupe group" from a B2C merge/purge. Both records contain the Surname of "Jackson," and the identical Address, City, State and ZIP+4 Code. Only one name would be selected to be mailed:

Most Business-to-Institution ("B2I") direct marketers - companies that target some permutation of businesses, non-profit organizations and governmental entities - do their prospect merge/purges at the individual level; that is, the Surname can be the same, but not the Given Name. This is because it is common for unrelated individuals with the same Surname to work at the same location.

When B2C merge/purge logic is applied to B2I records, the results are not pretty. Let's return to our earlier dupe group, and take a look at two extra fields besides Surname:

The typical B2I direct marketer would want to send a mail piece to each of these individuals. Hence, to eliminate one of the names would be an example of "overkill."

Things get complicated when some prospect names are B2C and others are B2I. Then, the appropriate strategy is to run the merge/purge at the family-level for B2C records, and at the individual-level for B2I records.

It is common for B2C direct marketers to not realize that a small percentage of their prospect names are B2I. When this is the case, B2C merge/purge logic often wipes out a big chunk of B2I names; that is, generates lots of overkill. The problem is exacerbated when B2I customers have a lifetime value ("LTV") that is significantly higher than their B2C counterparts.

Case Study: Taking it to the Next Level

One B2C direct marketing company learned that a small portion of its prospects were B2I, and then leveraged this finding to great financial advantage. The discovery was made during an LTV analysis that it had commissioned. The study uncovered that B2I prospects, once they become customers, generate LTV that is much higher than for B2C. The hypothesis, later confirmed by secondary research, was that these were sales people who were purchasing gifts for their own customers.

As a result of the LTV analysis, the company focused for the first time on the B2I market. Accordingly, a separate marketing strategy was developed to take full advantage of the significantly-higher LTV's. For example:

  • Sophisticated merge/purge techniques were employed to handle B2I prospects differently.
  • Many new prospect sources were identified, because the high LTV for B2I was able to support a much higher per-customer acquisition cost.
  • A special catalog of merchandise suitable for corporate gifts was developed.
  • Outbound telemarketing was implemented.
  • Special initiatives were instituted to track B2I customers; including outbound calls, and direct mail incentives to mailroom personnel to provide updated customer information.
  • Additional money was invested in the resolution of service problems involving these high-value B2I customers.

Within several years, B2I represented a significant percentage of the company's sales, and overall revenues had increased accordingly.