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August 2009

Why Direct Marketing Causes Executives to Lose Their Marbles

Many marketers, reluctant to miss any avenue of opportunity, define their target as broadly as possible and in so doing miss the chance to convincingly address the most potent prospects. A typical example is a company that perceives its target market to be the Fortune 1,000.  That group is actually comprised of several thousand revenue reporting companies – some with centralized and some with de-centralized decision making.  While is sounds contradictory, I recommend that companies identify the largest, most targeted markets to make sure that they have a tightly defined universe, but with no gaps and then build contacts and contact information around those targets for multi-touch, multi-media and multi-cycle prospect development programs (covered in detail later in this book).

Companies that more quickly see the value proposition of a vendor’s product, whether due to immediate business pains or because they are looking to enhance their own capabilities, respond at higher levels than others.  So it makes sense to identify segments of the market and market to them specifically. Others, though still qualified, may be more hesitant and require different touch strategies and messaging before their sales potential can mature. They are still good sources of revenue, though, and if left behind in the rush to close will most likely end up directing that revenue to a competitor. Recognizing and nurturing all prospect potential is crucial to pipeline development, future revenue and market share.

By applying market intelligence and finely-defined segmentation strategies, I have been successful in increasing sales performance while actually reducing marketing costs.

The most misunderstood aspects of direct marketing involve lists and databases. Executives often feel that lists are a waste of their time; and database issues seem so complex that execs are willing to pay exorbitant sums to the “experts” who deal with them. Big mistakes!

Over 60% of the value of any direct marketing campaign is driven by list and database issues. To understand why, think about marbles.


For most business-to-business marketers there are a number of list choices. Response lists, subscriber lists, controlled circulation publications, compiled files. They each have advantages and disadvantages, but it is important to know that even the best lists are rarely more than 50% accurate.


Ever play marbles? Remember that different types of marbles had different values.

Machine Made Marble Price List
  • Swirls - $.25
  • Stripes - $1.25
  • Flecks - $1.25
  • Loops - $1.25
  • Spirals - $1.25
  • Agates - $5.00

What if I told you that your direct marketing campaigns are run as though you were playing marbles without knowing the difference between a Swirl and a Stripe? Worse, what if improving results was as simple as separating your Swirls from your Agates?

While most executives would not dream of buying a jar of marbles without knowing exactly what was inside, they approve the purchase of lists that contain the equivalent of Swirls, Loops and Agates, often without knowing exactly what they are getting.


Suppose you have a mason jar filled with the following:

100 Swirls - $25.00 100 Flecks - $125.00 100 Agates - $500.00

The average value of each marble in the jar is $2.17. Reach in and grab an Agate for $2.17 and you have cause for celebration. Pay $2.17 for a Swirl and you will feel taken.

When you execute a direct marketing program you make essentially the same choice. You mail, call or otherwise contact individuals based on their potential value to you as a customer. Some names are worth very little (let’s compare these names to Swirls at $.25), some are average in value (say the value of a Fleck at $1.25) and some are high value names (such as an Agate for $5.00).

Is it possible to market to just the high value names? Yes! It is possible to market to the “Agates” and “Flecks”, and skip the “Swirls”, in your market with just a little effort and very little expense.


Here is how:


Just as you can see the difference between a Swirl and an Agate when you look into the jar of marbles, it is possible to calculate the value of names you direct market to in advance by doing a bit of testing prior to rolling out campaigns.

The secret is segmentation. Segmentation breaks large universes of names (multiple lists and/or multiple list segments) into smaller, homogeneous “cubes” or layers of like individuals or companies. Once these “cubes” are identified, response from each “cube” can be separately analyzed. Some differentiating characteristics to use when segmenting names into “cubes” are geography, revenue, number of employees, growth percentages, SIC codes, decision-making levels and/or other data that is commonly available. You should also compare each list or list segment to your customer list and the customers of your competitors to determine how many customers match your prospect lists. The higher the match you find, the better the list.

If you pay $5 for a marble you expect to own an Agate. Think of lists the same way. Find the Agates, and mail more of them than Swirls, and you will enjoy a higher ROI every time. With segmentation, a list is split into distinct strata of names “cubed” by similarities rather than a random “jar of marbles”. Just picture your Swirls, Spirals and Agates all segmented by type and you have the right picture.

The following will help you win all of the marbles (without losing yours):

Don't Blame the Economy: Don't Be A Victim!

We are going through some very tough economic times, but not everyone is a victim. The facts are that we have: high unemployment, many business closings, a weak US dollar, record deficits, fear of what may happen next and daily media reminders of how bad things are. This may be true, but in reality most elements of the economy are still thriving.

Unfortunately, individuals and companies feel that with all of the negatives this is not the time to spend money on marketing and sales. Actually, business analysts will tell you that at times like this it is imperative to invest in aggressive marketing, and fine-tune the sales process to find out what programs are working and which ones aren’t. This is when you must have a system in place to make sure you get the best bang for your buck.

LEADTRACK has been in the sales lead management business for 30 years and it is shocking that from 1979 to 2009 several figures remain constants in business annals…

  • More than 50% of qualified leads are never worked by sales
  • Less than 50% of a sales persons time is spent selling
  • 80% of trade show leads are never followed up

You need tools that will ensure:

  • Your valuable sales leads do not fall through the cracks
  • Inquiries are quickly routed to the correct sales person for quick action
  • Marketing investments are analyzed to optimize budgets
  • The entire organization is linked to the sales pipeline

This is not the time to sit back and wait for things to improve. Take control, implement a state of the art sales lead management solution to make sure your precious sales leads are not falling through the cracks. Don’t let your company or your sales people become casualties of this temporary economic slow down.

You can implement a solution, either on-demand or on your premise in a matter of days and begin realizing the many benefits of improved sales lead and marketing management.

You can’t blame the economy if:

  • Your reps spend the majority of their time in non-sales activities
  • More than half of your costly qualified leads are never worked by sales
  • 80% of your trade show leads are never followed up

Take action, now.  Don't be a victim.

Attributes of a Well-Qualified Lead

Dan McDade, President of PointClear will publish his thoughts on lead management subjects several times a quarter.  He is also on the SLMA Advisory Board. 

Jim Obermayer

Attributes of a Well-Qualified Lead

By Dan McDade

There is a lot of talk about "BANT" in the marketplace today. "BANT" stands for budget, authority, need and timeframe; and there are some managers specifying that each element of "BANT" must be satisfied in order for a sales opportunity to be truly qualified. I don't actually believe in this practice, and I'm hopeful that you will agree with me.

For many if not most "enterprise deals" (or "the complex sale") it is not at all unusual for budget to be worked out during the sales process and via the use of a business case. If you prequalify for budget in those cases—you will find no leads. Similarly, the lack of a specific timeframe should not necessarily disqualify a prospect. If you find a decision-maker (real authority) with addressable pain, timeframe can be accelerated with analysis and a compelling business case.

That being said, there are ideal criteria for highly qualified sales opportunities and a high-end partner will address each and every one of these criteria when delivering qualified prospects to the field:

  1. Vertical (SIC or NAICS code)
  2. Firmographics (revenue, # of employees, # of locations...)
  3. Decision makers/influencers and respective roles in the decision-making process
  4. Environment (related to each solution—such as "technical environment")
  5. Decision maker level of engagement (engaged, referral but in the loop...)
  6. Business issues/pains uncovered and validated
  7. Decision making process and documented
  8. Budget allocated or process for establishing a budget documented
  9. Competitive landscape documented
  10. Sense of urgency or compelling event

Unfiltered, low-level leads generally have two or three of the data points in the list above, but rarely more than that and frequently the data points are overstated, misrepresentative of the real situation or are reported by someone who can't actually make a decision and establish a budget.

With a detailed picture of a prospect's business drivers, plans and buying process, the sales executive can be positioned as a knowledgeable business advisor rather than having to essentially requalify so-called leads on the front-end.

We'd love you hear your thoughts...

If you are a C-level or SVP-level executive, how much more effective might your sales executives be if they were provided with high quality sales opportunities rather than low-level leads?

If you are in sales, what percent of the leads you currently receive contain information about all ten criteria listed above? How about seven out of ten?

If you are in marketing, would it be helpful to prequalify leads, turn over those that are sales ready and nurture the rest? How well is that being done in your company today?