I assume that because you are reading this white paper that you operate in a business to business market. I can confidently guess that you could volubly describe to me your company’s product (or service) together with the many product variations you can offer. You could no doubt also tell me the prices of your products. There would be no problem asking you to describe the channels by which your products get to market. However, if I was to ask you how people get to know about your products and the campaign effectiveness of your many and scattered forms of promotion, I am sure that you would need time to think about your answer.
There must be more misunderstood money spent on business to business promotions and B2B advertising than on anything else in the marketing budget. Maybe your promotional spend is excessive; maybe it isn’t enough. What we do know is that it is difficult to measure campaign effectiveness and very few people even try.
Let us begin by thinking our way through the way that B2B promotions work. The AIDA model helps in this respect. This hierarchical model follows the decision making process from lighting the lamp for people through to the sale itself. At each level in the process the numbers of people dramatically reduce so that those who take action are a small fraction of those who are aware of or interested in the product.
The AIDA model is also important because it gives us four levels to measure and explore when we are looking at the effectiveness of business promotions.
Those of you who have been following the B2B white papers will know that one of the key characteristics of business to business markets, that distinguishes it from consumer markets, is the complicated DMU (decision making unit) within industry. There may only be one person placing an order within a company but almost certainly there will be one or two others influencing the decision in their own special ways. A production person may approve or veto products that are effective in the workplace. Someone else could endorse companies with the appropriate financial stability to be a supplier. Yet a further person could impose conditions on health and safety issues. Advertising market research requires us to understand the role played by the different parties in the DMU and how they are influenced by promotions.
A typical business to business promotional campaign may have a budget of just a few thousand pounds. £50,000 is a large campaign. There is good reason for this. The target audiences for business to business promotions are small in number and measured in their thousands and not in millions as is the case with our consumer cousins. With this small number of customers in their sites, the best means of contacting the larger accounts is in person. Not surprisingly, therefore, consumer and business to business companies spend significantly different amounts of their promotional budgets on different types of B2B promotions.
The other point to make by way of an introduction is that promotions have different objectives at different times in the product life cycle. At the beginning of the life cycle, promotions are designed to build awareness and establish the credibility of products and in later years the promotions have to sustain demand. Any consideration of the campaign effectiveness of promotions must have the objective of the promotion in mind.
There is much that market research can do to improve and to measure campaign effectiveness. So why is it hardly ever used in business to business markets? The reason, sadly, is money. An advertising testing research study, designed to improve the effectiveness of a promotion, may cost as much as the business promotion itself. Understandably, many B2B marketers question spending so much on intelligence gathering, preferring to suck it and see.
At the time of writing this paper we have just finished a piece of advertising effectiveness research into a new brochure. The cost of the research was £7,000 – as it happens, equal in value to the cost of the brochure and the mailing. However, in this case our client believed that the research was justified because of the learning gained from the research and the value that this could have for other parts of the business. Also, the brochure was one of a series to be used in modified forms within the Group. The total spend on the promotion in all its variations could be closer to £100,000. Not least, our client was sufficiently far sighted to recognise that if the brochure was launched without advertising market research and failed to draw business, it would not only waste the £7,000 incurred in the print, design and the mailing, it would also cost in terms of the business that was never won. Conversely, just a couple of projects won as a result of an effective brochure would pay many times over for both the cost of the brochure and the research.
Before I describe how advertising market research can help test the effectiveness of promotions, it is worth thinking about how market research can be used to find out what will make an effective B2B promotion in the first place. Most promotions are creative ideas (sometimes not so creative) developed by the client company or its advertising agency. Once the creative idea is born, it quickly becomes adopted and translated into the promotional device – the piece of literature, the advert, the exhibition stand etc. However, what if the creative platform is wrong to start with? Communications research carried out at an early stage can generate the creative ideas for the promotion. These ideas are best generated by focus groups which spark debate and thoughts.
Of course, many business to business markets are limited in size with customers and potential customers scattered over a wide geography. In order to persuade 8 such people to sit around a table and join a focus group, there needs to be a local population of 50 companies from which to recruit. On the occasions (and there are many) where there are no such clusters, other options have to be considered. Face to face and telephone interviews provide suitable options for exploring creative platforms as they allow projective questions, open discussion and lots of probing. At this stage the emphasis is on good qualitative research that flushes out ideas.
Before a piece of literature or an advert is finalised, market research can be used to determine the campaign's effectiveness. It isn’t necessary to show the mock-ups to hundreds of people, 20 or 30 target respondents is a fair test. This number will spot if there are features that are failing in terms of interest, impact or clarity.
Comments such as these about the front cover of a new brochure would give a clear signal that some changes are needed:
It is just two guys kidding around, posing. It is false. I don’t know what they are up to… It does not give any information.
“It looks staged.”
“I don’t think a lot of the front cover. It’s too general like a lot of marketing literature. I get five pieces like this on my desk every day”
The same approach can be used to test intended adverts. In a recent project we had to find the most effective advert out of 6 possibilities. The ad testing research was carried out amongst a target audience of 100 buyers in businesses. The telephone was used in the first stage to recruit and qualify respondents. The next step involved the mailing out of the six adverts to each respondent and finally, a follow-up interview asked key questions:
Prior to the research being carried out, the client, on the advice of the advertising agency, favoured ad number 1 (see Table 1). In fact, ad number 2 was the outright winner. Also, ad number 4, proved to have good potential subject to one or two modifications though prior to the research this had been dismissed as boring by the agency.
|Measures Of Effectiveness||Ad 1||Ad 2||Ad 3||Ad 4||Ad 5||Ad 6|
|Compelling (% saying it is compelling)||50%||67%||54%||58%||36%||56%|
|Relevance (% saying it is relevant)||54%||79%||65%||67%||61%||66%|
|Appropriate (% saying links closely to advertiser)||58%||83%||23%||67%||60%||59%|
|Clarity (% saying it is clear)||37%||79%||62%||50%||51%||50%|
Table 1 - Campign Testing Research: Findings From A Test Of Adverts Under Consideration For A Campaign
There is one further type of study that is widely used in consumer market research but hardly ever used in business to business markets because of its prohibitive costs. This is the pre and post research study in which interviews are carried out before a campaign (the “pre”) and repeated with a matching sample of respondents when it is over (the “post”). Questions are asked about awareness of products, the recall of adverts and associations with products. The differences in the results of the two studies show the campaign effectiveness. The sample size of the pre and the post studies need to be sufficiently large to ensure that any changes in the measurements really are genuine and not the result of a statistical quirk. Each of the studies requires a minimum of 300 respondents (500 interviews is more comfortable) which results in the research being too expensive for most industrial companies.
Advertising market research isn’t the only measure that can be used to test the effectiveness of promotions. Here is a list of some non-market research methods:
When people make contact with a company it is enlightening to ask how they first heard of it. (These questions are often badly answered as people have poor memories and suffer confusion about how they gained their initial awareness. Over time, however, it does build a picture).
It can be worthwhile measuring the editorial column inches in journals and papers following a press release.
David Ogilvy, one of the great fathers of advertising, was a strong proponent of advertising market research to establish campaign effectiveness. Some of his conclusions captured in his book Ogilvy on Advertising, bear repeating and remembering:
I would add to these wise words a few conclusions of my own that have been drawn from the B2B advertising market research I have carried out over the years.