Managers’ Corner: A Well-Timed Trigger

In the same way that the best B2C companies learned to use new ways to reach consumers in real time, smarter B2B sales organizations are using trigger-marketing techniques to sell better, according to a recent report by Jeff Zabin, a research fellow with the Aberdeen Group.  

Giving the right customer the right offer through the right channel is no longer enough. It is increasingly important that all sales and marketing communications be made at the right time, as well. Zabin calls for a migration from “just-in-case marketing to just-in-time marketing,” borrowing his language from the revolution in inventory management.

He acknowledges the shift will not be easy, which is why it has not yet been made outside the more innovative B2C firms, such as those in financial services, for example. But it is necessary, both to close new deals and maximize cross-selling and up-selling activity. The key changes focus on both the relevance and timing of messages. This, in turn, means using event triggers.

Aberdeen proved the rewards of using trigger techniques by looking at the performance and practices of 225 companies. The best-in-class companies were selected using three criteria. Eighty-one percent of them increased customer profitability year over year. Nearly 90 percent reported above-average effectiveness in cross selling and up-selling. Finally, 95 percent of these leaders showed above-average effectiveness in precision marketing. None of the worst-performing firms achieved any of these.

Peeking beneath the performance metrics, Zabin found that 70 percent of the leading firms devoted marketing resources to defining the right event triggers for certain actions and then came up with marketing materials suited specifically to each event. Half of these best-in-class companies devoted resources to analyzing customer behavior, the key to fully exploiting trigger-marketing techniques. And 70 percent were already using digital dashboards to monitor the performance of their programs.

“The big challenge is to define event triggers,” Zabin says. “You must have a predictive model.” In B2B markets, such triggers might include changes in stock prices, management, suppliers, resellers, actual products produced or sold, and location of plants or sales offices. Specific transactions could also be triggers, as can the expiration of old contracts or new offers.

Online behavior contains many potential triggers, such as information asked for or Web pages viewed. Finally, there are external triggers, changes in the overall economic environment that could prompt specific actions or interests among prospect companies. 

“Relevancy and context are the keys to cross-selling and up-selling,” Zabin emphasizes. “It is all about now: Why is now better than before or later, and why does it present a greater opportunity?”

One relevant reason to use triggers and tailor both marketing materials and sales contacts to the triggers is to alleviate marketing fatigue and cut the clutter that assaults businesspeople today. But companies are switching to trigger marketing for other reasons, as well. These include increasing return on marketing expenditures, increasing customer acquisition and profitability, and improving cross-sell and up-sell success. And 7 percent of the companies surveyed by Aberdeen want to reduce the waste of paper and other resources devoted to direct mailing – proof that customer clutter is also a problem.

Done right, the approach pays off. Fully 85 percent of best-in-class companies reported that their trigger-marketing programs were very or at last moderately successful. Some of the lagging firms also attempted the tactic but were less pleased. Only 18 percent of them found trigger marketing successful. “This may be due to failure to put the right business processes in place or to the lack of resources or metrics to do it well,” Zabin observes.

Best-practice processes include basic housekeeping, as well as innovative strategies. Customer databases must be cleaned of duplicates, and their quality must be enhanced. The best companies do this more frequently and more thoroughly.

Data should be centralized and integrated to give a full 360-degree view of customers from all touch points and company channels, as well as from third parties. The leading companies carry out predictive modeling of customer behavior, and they segment the data according to behavioral patterns.

The top firms track and measure the results of their trigger-marketing campaigns, usually with digital dashboards. The metrics include changes in marketing ROI, recovery of lapsed customers, retention of existing customers, profitability of all customers, and customer response rates. “These are easy to measure,” Zabin argues.

Best-in-class firms thus have the data and develop specific procedures for enhancing trigger marketing over time. They commit permanent staff resources to managing trigger campaigns. They also have a centralized database of their products and services. They use campaign-management applications with rule-based decision engines. One new technique is using the e-mobile channel, including cell phones, to track and manage current trigger campaigns.

All this cannot happen overnight, of course. “The best companies usually have been using trigger marketing for two years or more,” Zabin estimates.

Zabin recommends that companies new to or interested in the trigger approach first define best practices, based on the experience of successful veterans. “You should also bring in resources with trigger experience and appoint a trigger-marketing manager.” And the manager should be sure that early results are reported to key decision makers, including the CFO.

One practical reason for moving to triggers is not likely to go away soon: “Customers are suffering from marketing fatigue and resistance to emails,” says Jeff Nicholson, VP of product marketing at Portrait Software. “They are spammed daily, and there are pop-up blockers. There is the junk-email folder or the mental opt-out. If recent emails are not relevant, customers just delete the new ones.”

Nicholson says the right triggers can be defined either intuitively, by experienced salespeople or marketers, or by the kind of customer analytics his firm carries out. Contract expiration or signs of customer loss become especially important in a tight economy, when retention is king, but many firms have less staff to press for renewals.

“You can also use triggers to start a dialogue,” Nicholson says. Emails can guide prospects to your Website, where they can then answer qualifying questions, such as those regarding company budgets. The key is getting them there in the first place, which is where the right trigger and message are vital.

The basic trigger approach is easy to implement and can be done in a few weeks, according to Nicholson. “Get the low-hanging fruit first, and start with top trigger spurs. You want to avoid ‘analysis paralysis.’ Learn from these spurs, monitor and measure success, then add more triggers.” He urges companies new to the approach to focus on as few as three trigger events initially. Later, these can be built up to six, twelve, or more.

Sophisticated programs can design what Nicholson calls “nested triggers.” One event produces a marketing reaction, and then the prospect’s response determines the next action from either marketing or sales. This may sound a little complicated at first, but it is not.

“The aim is not to add complexity,” stresses Nicholson. “The aim is simply to automate the best practice of a sales rep when you do not have time or staff to do it manually.” He reports that well-designed trigger programs in B2C markets have reduced churn by up to 50 percent. 

Tim Zink, VP of Conclusive Marketing, is seeing a lot of interest in trigger marketing now from B2B companies. Zink helped implement the trigger approach with an international life-science firm that sells pharmaceuticals for animal health and crop protection, mostly to business customers.

“We had helped the firm through CRM and its database initiatives, and management was willing to use information processes, analytics, and metrics,” Zink explains. “About three years ago, it had become used to scoring its products and customers, so it had crossed that hurdle.”

The firm then agreed to have Conclusive Marketing help in the next step – improving speed and execution and reducing the cost of sales and marketing. Fortunately, lifetime values had already been estimated, and Conclusive had developed models of customer defection and prospects that mirrored the characteristics of best customers.

The defector model was used to determine when current customers were heading for possible departure. “Not on the edge of the cliff, but on the hill thinking about it,” Zink explains. “Out pops the potential defector, and the trigger feeds it into the system to prevent the loss.”

There are three basic kinds of trigger, according to Zink. First are the trigger events that can usually be determined by product managers and then monitored by the system for suitable actions. Second is a rules-based trigger, based on customer experiences carefully tracked over time. “If you see transaction data showing that certain things will happen because they are going outside parameters, the rules kick in. It might be a positive or negative trigger, and it might be tied to a specific product.”

The third type is a model that applies to each current customer. Here, model results are fed directly to the sales force after marketing has specified several options for dealing with the situation. “This trigger is the most expensive because the action is face-to-face,” Zink notes. 

Conclusive Marketing refreshes its triggers, for both potential difficulties and profitable opportunities, each week before a meeting with its life-sciences client. “We tee these up, and some go to the call center and some the reps get directly,” says Zink. Some actions are automated, while others must be handled in person.

When working on a new engagement, Conclusive usually pilots the trigger approach, applying it to a small sample of leads and customers and pairing with a mirror image of other similar firms to be treated by conventional marketing. Zink explains the approach thoroughly to sales and marketing staff members to help them understand the logic. He says the trigger approach commonly yields 30 to 40 percent more revenue from the piloted sample, compared with the mirror group of similar firms. The usual next step is to take the approach up to a regional or national level. The improvement generally holds up well over succeeding years. In fact, firms usually get better at applying triggers as they gain experience and confidence in the technique.

The best candidates for implementing trigger marketing are companies that have already constructed solid customer databases and are looking for ways to exploit them. Firms that are used to measuring both customers and their own activities well are also well placed to try it, according to Zink.