Did you know 2.8% of your customers are dead?

Gravestone saying "Rest in Peace"

Those are the exact words I mentioned to the CEO of a B2C company – where customers were paying monthly subscription fees. Unfortunately, his immediate question back was “Okay, but how many of those are on Direct Debit?”. I think my reaction to his interest in the number of people paying for his service, but not using it, was one where I thought he’d do damage to his brand than earn him extra profits.

It’s long been an accepted view that Marketing in IT circles is often considered a set of “hail Mary” throws to attract new potential customers, with little of the precision of folks who have that title in Fast Moving Consumer Goods (FMCG) companies. I’ve sat in meetings with a roomful of IT reseller “Marketing” folks to find I was the only company present doing systematic testing to find out what works, what didn’t and to use this learning to continuously improve. More a case of “getting the letter out” and losing the ability to learn anything; surely much better to send two different wordings out, to see which one pulled better – at the very least.

I’m reminded of one person I met who worked in the field for a Chocolate vendor, and like all his industry colleagues, could relate to 1/10 of one percent shifts in his market share in the retail outlets he supplied through. He was expected to have an action plan in place if anything slipped a little, or to do more of anything that slightly increased his share. One day, fed up selling Chocolate bars, he decided to move to a company selling software to large IBM computer installations.

He walked in to see his new boss, and made the fundamental mistake of asking what his software products market share was in IBM Mainframe installations working in the Finance Industry and in the counties of Avon and Somerset. His new boss looked at him as if he’d arrived from the Planet Zog, and told him just to get on the road and sell something. He ended up thinking this was dumb, and set up his own company to fix the gap.

He elected to start sending out questionnaires to all the large IBM customer sites in the UK (there were, at the time, some 1,000-1,500 of them), getting a telesales team to help profile each site, and to reflect the use of hardware and software products in each. Then sent out a quarterly summary, segmented by industry, of what everyones peers were using – so the survey participants saw value in knowing what their peers in like organisations were doing. He subsequently extended  the scope to cover other vendors, and gradually picked up a thorough profile of some 30,000 installations, covering over 80% of Enterprise IT spend in the country.

At that point, he had an ever-evolving database of all mix of hardware and software in each, coupled with all the senior decision makers details, and even the names of IT projects both planned and underway in each. The last time I had a meeting with him, he could aim me into the best 5-10 prospects for my IT products and services that aligned with what my ideal customer would look like (in terms of associated prerequisite products they were already running) – with a single rifle shot – allowing sales focus and without spreading sales effort over many unproductive lead follow-ups. Marketing (and Sales) Gold. Expensive to use, by worth every penny.

He subsequently sold his company and the database to Ziff Davis, then to Harte Hanks – the same folks who compile the list of dead people (from published UK Death Certificates) that was part of the profiling exercise I undertook and that I mentioned above. They then sold the same Database assets and it’s regular surveys to the company where it resides today.

Apart from that data, there are a number of other useful sources you can draw on. I once managed to persuade MySQL (before Sun, long before Oracle, ownership) to get their customers profiled, just by relating postcodes we deduced from sampling contact addresses and/or the same from location information on their web sites. It turned out that 26% of their base existed in System Integrators, Web Development and Software companies, while the remaining 74% was flat as a pancake over 300 other SIC codes. Very difficult to target as a whole unless you had the full list of customers – which only they did! There are also various mailing lists, MeetUps, forums and resources like GitHub where you can get a view of where specific developer skills are active.

All very basic compared to Consumer Marketing, where armed with a name, a date of birth and/or a postcode, you can deduce a pretty compelling picture of what your B2C customer looks like, family make-up, what they read and their relative wealth. When I was at Demon Internet (first UK Internet Service Provider), we could even spot one segment of very heavy users that, back in 1997, turned out to be 16-19 year olds living in crowded accommodation, playing online games and with no parental supervision of the associated phone costs. We also had the benefit of one external consultant who was adept at summarising 550 pages of BMRB Internet Survey number tables, producing an actionable and succinct 3-5 pages of A4 trends to ride on.

Today, with even the most expensive mobile smartphones starting to commoditise – and vendors looking to emphasize even the smallest differentiation now – I wasn’t too surprised that Samsung in the USA have today landed an ex-VP of Proctor & Gamble to head their Marketing Efforts going forward.

With that, the IT industry has now come full circle – and FMCG class Marketing skills will start to become ever more important in our midst.

 

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