What Is A List Broker And Why Should I Use One?

In my years of experience working with PTC's Value Added Resellers (VARs) on their marketing activities, it always baffled me why none of them were using a list broker. I had countless conversations with VAR marketers to try to explain the value of it. I built it into every presentation I ever delivered on marketing planning and marketing tips and tricks. I even invited a really excellent list broker (Oceanos List Intelligence, http://www.oceanosinc.com) to co-present a VAR marketing training webcast on list acquisition and packaged an engagement with Oceanos as a "free consultation" for the VARs (would have been free anyway, but I was trying to build some excitement around it).

But PTC's VARs never took the advice. They did rent and purchase lists occasionally, but they would always purchase directly from individual list owners instead of engaging with a list broker. The only explanation I can come up with is that the VARs are, by nature, very reactive marketers. They don't have a big marketing staff, they don't put a lot of time into developing a plan. And when a list owner or ad rep would call with an offer they would just accept it (or not) without conducting much of a competitive analysis.

Your Audience Acquisition Strategy Should Be Marketing Priority #1
As I have said many times: there is nothing more important in marketing than understanding your target audience and coming up with a plan for how to get your message in front of them. My previous post was about how to define your target market. Now that you have defined your target market, you should consult with a list broker to put your target market plan into action.

4 Reasons You Should Use A List Broker:
#1: Compare Apples To Apples
Lists are an important investment and they should be rented or purchased only after careful consideration and comparison. The list broker will take your target market definition and then conduct a research project to develop an exhaustive "list universe report" of all the postal/email/telemarketing lists that match your definition.

The list universe report will include data cards for each list source. Data cards are essentially spec sheets that describe everything important about the list:

• How the list was sourced
• How many records are in it
• Does it include postal/email/telephone contact information for each record
• What key categories you can select or filter out to ensure you get the best match against your target audience (company size, industry, job title, etc.)
  
• Cost (base cost, minimum purchase amount, cost for each selection criteria applied, shipping & handling fees, etc.)
• Etc.

Once you get the list universe report, you can use it to make an "apples vs. apples" comparison of lists to ensure you are getting the best value. You can make your list selection a strategic decision instead of a reactive decision. And therefore you will spend less time chasing your tail on low-value activities and more time executing against a plan that can be measured, vetted, and defended.

#2: A List Universe Report Can Inform Marketing & Product Decisions
A list universe report is not just good for renting or buying marketing lists. It is a window into the world of your target market. Take your list universe report and start to look into the various list sources and you will find:

• News publications and websites you should be targeting for PR efforts and perhaps advertising
• Professional Associations you should be sponsoring, supporting, and joining
• Trade shows at which you should be speaking, attending, or exhibiting
• Conversations that are occurring that can help to guide your product roadmap and marketing messaging
• Competitors you should keep your eye on
• Potential integration and co-marketing partners
• Opinion leaders you should be following on Twitter

#3: A List Broker Can Do It Better Than You Can
In a job interview once I was asked what my first activity would be if I got the job. I said one of my first activities would be to engage a list broker. The guy said "do you know what SRDS is?" Yes, I know what Standard Rate and Data Service is. I know what data cards are. I know that I can go on the internet and find data cards and media kits myself. I once worked as a list broker, using tools like NextMark to create list recommendations for clients. My experience made me appreciate the services of a good list broker even more. That's because even with access to *subscription* tools (they are not free) like SRDS, NextMark, and Marketing Information Network (MIN) I learned that it is hard work and that experience matters.

Here's the thing: wouldn't you rather have someone do it who is more highly skilled than you? When I was a teenager I once changed the brakes on my car. I know I can do it. But I would rather not spend my day running back and forth to the auto parts store, crawling under my car, bashing my knuckles on the undercarriage, and swearing a blue streak. Instead, I prefer to get an experienced mechanic to do it in their garage with a hydraulic lift and all the right parts and tools. I will be more confident in my car's ability to stop afterwards, because I know that a skilled expert can do a brake job better than me. And I consider it well worth the cost. Which leads me to this...

#4: A List Broker's Services Are FREE!
Any VAR should immediately understand this business model, because List Brokers are Value Added Resellers of lists. List brokers essentially buy lists from list owners. They get a broker's discount on the price of the list from the list owner, just like a VAR gets a marginally discounted price when he buys the software from the ISV. And then the list broker resells the list to you at the list price (thereby making their money on the margin).

So you pay exactly the same amount you would pay if you purchased the list directly from the list owner, but with a ton of *added value* from the list broker:

• A list universe report that helps you conduct an apples-to-apples comparison of various list sources
• Aggregated billing (you pay one list broker instead of many list owners)
• Management of the logistics (managing the schedule, managing your suppression list of existing customers, managing the suppression of previous list buys, QC of your emails for email marketing, etc.)
• Aggregated open/click reporting from multiple list buys (for email marketing)
• Historical record of the transactions -- so over time you don't waste money buying the same list twice, or a list that performed badly for you in the past
  

The list broker does not charge you for that added value, it comes along for the ride. It is the biggest no-brainer in marketing!

Next topic: What are the 3 types of lists, and what are the advantages/disadvantages of each.

How To Define Your Target Market

Inspired by a recent discussion in the B2B Lead Roundtable group on LinkedIn, I thought I would outline a few important steps for defining your target market.

There is really *nothing* more important in marketing than having a good definition of your target market that everyone can agree with. If you do everything else right (i.e., you have the right message, the right offer, the right medium, the right timing, etc.) but you are talking to the wrong audience, then your marketing will almost certainly fail. So developing a good target market definition is well worth investing a little time and money.

#1 Consult With Sales
Meet with your head of sales and ask him/her who the target market is. Ask him/her for their description of "the perfect lead." Tease out the difference between decision-makers and influencers since most B-to-B sales involve a decision-making *unit* (DMU) of more than one person.

Also identify people who are often obstacles in the sales process who should NOT be brought into the DMU and should perhaps be filtered out of lead generation efforts. For example, I have learned that often the IT department is an obstacle (resistant to change) and they should not be brought into the discussion until the line of business managers are converted to internal champions. Note that you might have different targets depending on company size, vertical industry, and geography.

#2 Get Perspective From Product Management
Have the same conversation with your product manager that you had with your head of sales.

#3 Reconcile The Differences
The next step is to bring the head of sales and the product manager together in a meeting and reconcile the differences in the definitions they each gave you separately.

It is actually quite common that the target market definitions from sales and product management will not be perfectly aligned, and you are bringing a valuable service to your organization by brokering this discussion and resolving the differences. You could also take the additional step of running some analysis of your existing customer base to quantify which titles and industries are most prevalent.

As a team, prioritize the members of the DMU into primary targets and secondary targets. Prioritize the vertical industries and geographies.

#4 Draft Your Target Market Definition
Now it's time to get it down on paper. It's important to make sure your target market definition is "actionable" -- i.e., you need a target market definition that uses common terminology and categories that are used by media or list professionals. For example, use SIC or NAICS codes to identify key vertical industries. But I also recommend including some softer criteria that you or your media and list professionals can use to do open-ended searches.

For example, here is a good audience definition for PTC's MCAD products that the VARs could use:

	JOB TITLES: Primary: Manager/Director/VP of Engineering, R&D, Product Development Secondary: Design Engineer, CAD Administrator Omit: IT Manager/Director/VP of IT, CIO JOB FUNCTION: Managers of design and engineering teams charged with designing and manufacturing new products. They are constantly striving to improve design efficiency, reduce construction materials and cost, improve structural strength and function, streamline collaboration with other team members, and speed time to market. Target audience may be using competitive software products such as Dassault SolidWorks, Dassault Catia, Autodesk AutoCAD, Autodesk Inventor, Siemens Solid Edge, SpaceClaim, etc. COMPANY SIZE: Less than $100 million in annual revenue KEY INDUSTRIES: Discrete Manufacturers (NAICS codes: 2400, 2500, 2700, 3000, 3200, 3300, 3400, 3500, 3600, 3700, 3800, 3900) [Note: this list of NAICS codes could be refined further by looking at each subcategory at http://www.naics.org.] Omit: defense contractors, state and federal government agencies GEOGRAPHY: USA & Canada (or a list of states, postal codes/zip codes/SCFs, area codes, etc. if your selling territory is tightly constrained).

Notice that the target market definition has both "hard" categorization (job titles, key industries, etc.) and "soft" categorization (job function). This gives you lots of important stuff to search for, and lots of categories upon which to evaluate one list source vs. another.

Also note that I have included some things to *omit*. For example, I have omitted state and federal government organizations and aerospace & defense contractors -- that's because VARs are not allowed to sell to these industries since they are handled by PTC's Direct sales force. Likewise I have limited the company size to $100 million or below -- that's because PTC's VARs are charged with selling to small and midsized businesses. And if you are a VAR that sells in a limited geographic territory, be sure to specify that. No sense paying for leads you are not allowed to sell to.

It's important to note that you will never be able to find any list source or media that perfectly matches your target market definition. You will need to exercise good judgment to choose between multiple imperfect sources based on hard data and contextual data.

#5 Get Sign-Off
Get both the head of sales and product management to sign off on the final target market definition. Alignment is critical. Now you are sharing accountability for the marketing/sales/product management activities that occur henceforth -- they should all make sense in the context of the target market definition you have all endorsed.

The importance of this step cannot be overstated. How many times have you heard complaints from the sales organization that your lead quality is not good enough? Now you can hold up the signed piece of paper and say, "this is the definition you signed off on; do we need to revise it?"

#6 Put Your Target Market Definition To Work
Now it's time to take your target market definition and use it to put together an audience acquisition plan. I like to start by engaging a list broker (I have had excellent experience with Oceanos, http://www.oceanosinc.com). The list broker will deliver a report of postal/email/telemarketing lists that are available for reaching your target audience. Then, as you explore these list sources you will identify key publications, social media communities, websites, directories, trade shows, professional organizations, etc. You can also use your audience definition to engage a media planner to create a media plan (magazine, online, radio, TV, etc.). Or ask your list broker if they also offer these services.

Stay tuned for my next blog posts, which will be a detailed look at list acquisition, including how to work with a list broker, the 3 major categories of lists, and the advantages and disadvantages of each category of list.

Sunday Morning Quarterback: Agricultural Heavy Equipment Advertised on ESPN

I was watching ESPN SportsCenter on Sunday catching up on the highlights and I noticed a commercial playing during one of the breaks. It is for a company called Case IH who sells farming heavy equipment (tractors, combines, etc.). The commercial is well produced -- beautifully filmed wide shots, soulful voiceover, rich music soundtrack -- clearly, little expense was spared. You can see my camera phone video capture of the commercial here (sorry, not sure why it did not capture the audio). The video is also currently playing on their USA website home page at www.caseih.com.

I was surprised to see a TV ad for such a narrow vertical market running on ESPN. Could ESPN "broadcast" cable TV really be an efficient vehicle for reaching purchasers of heavy farm equipment? Isn’t there a ton of waste? (For example, me and all my neighbors sitting in Greater Boston looking for Red Sox highlights?)

But Wait, There’s More!
Then I was totally blown away when I saw the second half of the commercial, which promoted various discounts:

• "$25,000 off Steiger Tractors"
• "$15,000 off Magnum Tractors"
• "$15,000 off Axial-Flow Combines"
• Check out caseihdeals.com for more info

Holy fertilizer! I have never seen a $25,000 discount advertised! I wonder if they will throw in a Sham Wow if I order within the next 60 minutes!

Wrong Media, Wrong Message
An article about the ad campaign published August 16, 2010 at www.farm-equipment.com notes that "the campaign will run primarily in agricultural trade journals… targeted national support for the brand through a television buy and Internet banner ads… direct mail and new dealer tools."

Duane Nelson, Case IH director of global branding and marketing, said "this campaign won't leave a doubt in anyone's mind that Case IH is the equipment maker that puts farmers first." Ironically, seeing this ad on ESPN made me doubt that Case IH (or their ad agency, Cramer-Krasselt/Milwaukee) knows anything about their target audience. I suspect their prospects probably are not living in Boston. And they probably are tending the fields or at church on a Sunday in June at 10:00 am instead of watching the tube (granted, my knowledge of hard-working god-fearing farmers is completely based on stereotype).

National TV seems like a terribly inefficient way to reach buyers of heavy farm equipment, and I have to believe they would be better off doubling-down their investment on vertical print, database building, targeted web, social media development, channel marketing funding, etc. Use these methods to drive traffic to the same commercials posted on YouTube.

Maybe the ESPN commercial was "added value" negotiated into the plan for no additional charge along with a more targeted cable buy and media plan. But if so, I would have gone with one of their more branding-centric ads, not one promoting discounts (example of Case IH branding-centric ad here). Promoting discounts in a broad-based medium like TV just conveys the impression that you are selling a commodity product, and that cheapens your brand. Better to adopt a message that your product delivers superior *value* vs. the competition (something like: "feature-for-feature superior to Caterpillar, but priced lower to help today's farmers weather the current economic turmoil").