The questions continue to come in concerning how to get started in the fulfillment sales process. The starting point of the model is the marketing plan and marketing activities that are going to be completed to create suspects (companies we suspect need our services) and then developing qualified suspects into prospects (those companies that have a need and money to afford our services). This three part series will focus on these three initial steps of the sales model. Feedback from the Webinar and the previous sales classes indicates that a deeper examination and explanation of these first three steps is required.
Part one of the series will be devoted entirely to identifying target markets, which are only a small portion of the marketing plan. However, the remainder of the plan is generally driven from the target market decision. A step-by-step process will be presented to give you a guideline on how to find the correct companies and titles to locate during the process.
Step 1: Determine the Type of Fulfillment to be Offered
Each company, especially if you are new to the industry, must decide whether they want to compete in the sales collateral fulfillment or product fulfillment markets. The majority of the Mailing & Fulfillment Service Association (MFSA) membership is best suited for the sales collateral fulfillment market, because we are accustomed to working with marketing departments and printed marketing material. The sales collateral fulfillment applications include literature fulfillment, lead inquiry fulfillment, trade show support, seminar support and premium support.
The most popular fulfillment software packages offered to the industry allows the completion of five basic applications. I have bundled these into a general category called marketing support services. Marketing departments within corporations have limited manpower and a growing number of activities to manage. We can assist in the completion of their mission. We can also complete applications in a more efficient, cost-effective and timely manner than the client could themselves. Additionally, we will bring data management experience and technology to the table that will make their activities more effective in the future.
Step 2: Determine What Types of Companies to Target
It may be useful to discuss what general types of companies make good fulfillment targets. In my mind, there are three types: large field organizations, large advertisers and unique distribution requirements. There are many companies that have very large sales organizations to sell their products or services, including direct sales offices, distributors, agents, franchisees, brokers, etc. These are excellent because they have a continuing need to supply their field sales force with update sales and training materials.
Target companies that fall into the large advertiser category receive a high number of requests for information from its Web site, print advertising, call centers, coupon redemption, etc. Each of these requests has to be fulfilled, added to the database and then passed to the correct sales territory. Sometimes, a target company meets both large field and advertiser criteria in our market area. Companies will have unique distribution requirements companies, will have some criteria which makes their distribution different, such as: tracking lot integrity, assuring FIFO inventory processing, hazardous materials, governmental storage and shipment regulations and specific assembly instruction,s to name a few. You might recognize these as pharmaceutical companies, food distribution companies, petrochemical companies, insurance companies, etc. The advantage the MFSA companies bring to these types of companies is flexibility and problem-solving skills.
Case History: A 3PF enterprise, which provided print, mail and fulfillment services, had a prestigious manufacturer of private aircraft in its market area. The 3PF company worked hard and became the primary service provider to the aircraft company. This aircraft manufacturing company was an excellent print and mailing client but a small fulfillment client. The reason for the poor fulfillment content to work was that very few people or companies could afford a $30 million aircraft and the sales force required to sell was small. It is not because this was not a worthwhile effort; the 3PF company was successful in controlling the business of the aircraft company and probably could not have done so without a fulfillment organization. However, the fulfillment revenue was below expectations. The moral to the story is: "Not every big name company is a good fulfillment prospect." To continue with step two, we decide what markets to target. There are several ways to segment the markets these include:
A. Vertical Markets The term vertical markets simply means companies that can be placed into some large business category. SIC codes are one way to look at vertical markets, but sometimes we find that even · that is too general a category. High-tech, insurance, pharmaceutical, restaurants chains, publishers, etc. are examples of vertical markets. The assumption made when marketing to companies within the same vertical designation is that the companies will have similar, if not the same, applications. Therefore, if we have one such company in our existing client list, it would make sense to contact other companies in their vertical market. The facts that we would understand include: Who to call on; how the marketing organization might be organized; and its special lingo. These are only a few of the advantages to be gained from this vertical market approach. All these points should make it easier to identify our suspects and reduce the time to move them from a suspect to a prospect.
Case History: A 3PF company landed a large manufacturer and supplier of computer systems to the marketplace. One of the prerequisites to do business was that the 3PF company could not support another company in the same industry. Oops, there goes the benefit of the vertical market experience. Luckily, they were very large and worth the roadblock. During the same period, a chip manufacturer was interested in the same 3PF because they had experience in their industry. Experience would say that this is much more the case, and the reason why a vertical market approach will provide great returns.
B. Horizontal Markets: This designation is utilized to segment the market by some function within a general organization. This could be human resources, finance, distribution, manufacturing, marketing or other functions. The sales collateral fulfillment application is a good horizontal market that supports marketing organizations across a broad array of companies. Another example would be a manufacturer of forklifts who has every warehouse in the country as their horizontal market.
C. Company Size: Companies that generate between $20 and $30 million are a good starting point for prospective fulfillment companies. Companies in this revenue range have formal marketing departments. A good contact at the entry-level size client is the president. Generally speaking, always start as high as you can in the organization with your suspecting. As you call on larger companies, you will find the marketing organization to be more fully developed with marketing managers, product managers, marketing assistants and our most important title marketing communications manager. This is the person responsible for the printing and distribution of all sales materials. Any title that contains the word "marketing" is a good place to start. However, remember to go as high as you can.
D. Niche Markets: Niche markets are markets with special requirements. Once you have met the criteria to operate in this market, it is safe to assume that other companies in this market may have the same requirements. This is a mini-vertical market. Some fulfillment centers have earned the designation of "school book depository," which allows them to store and ship books to school districts. Other fulfillment centers have been qualified by FDA and local agencies to store and ship samples of drugs. Keep your senses aware of these special cases and exploit them when you have the chance.
Step 3: Determine Your Target Market
A. Analyze your current client base to determine which accounts are best suited to present your fulfillment capabilities. These are our best sources of information, because they are our friends and they will give us honest feedback on our services offering, presentation capability, areas of improvement, etc. They will also allow us to make a few mistakes and not be penalized. Printers should look at where they are shipping the material they print. If it is going to a fulfillment house bingo we have a suspect. If it goes directly to a company, then find out who is responsible for the material once inside the company. Mailers should look at what is being mailed and determine what pieces have a "call to action" that will require a response. Once the analysis is complete and the data can be sorted by industry, determine if there are any vertical markets that stand out and chose one or two to attack with your plan.
B. Gather data from various list sources to determine how many companies might be in a specific vertical market. This information is generally available at most libraries and now many such lists are online. The DMA, advertising and marketing organizations are best to locate the marketing manager.
C. Determine the size of the company which best fits your product offering. Attack the marketplace from a company size and vertical market standpoint. Do not overlook division headquarters, wholly owned subsidiaries and other smaller organizational entities that may be located in your region. Sometimes these entities are more difficult to find because they are not in your city. Great performance at the division level may allow you to compete on a nationwide or corporate level in the future.
D. Create a database with target companies and keep it current. Someone should have the responsibility to keep a master database of the active suspects. Contact management software should be used to record every activity. The company should not be taken off the list until there is no chance of selling services.
E. Determine your marketing activities and start gathering data. A database of 1,000+ names would not be unusual as you start. It will become smaller and more targeted after you are more established.
In the next issue, we will discuss the suspecting portion of the sales cycle. I wish you good selling.
Tom Quinn is director of Fulfillment Services for Mailing & Fulfillment Services Association. MFSA is the trade association for the mailing and fulfillment service industries.