Up until recently, B2B marketing was viewed primarily as an acquisition tool that essentially used a combination of cold & warm calling and direct mail to gain new business. This simplistic approach gave the sector a much less sophisticated image than consumer marketing, made worse by poor targeting and call centres peddling mobile phone contracts.

The sector shrugs it off

Thankfully, over the last 2 or 3 years there has been a significant change in the usage and sophistication of B2B. The sector is not only shrugging off its unsophisticated image but in doing so is standing at the forefront of a major turnaround and re-focusing of business practice. Why? Email. As a vehicle of customer retention, email has been B2B’s unlikely saviour.

As it costs five times as much to secure a new customer than to keep one, you could be forgiven for wondering why, for so long, so many B2B marketing budgets have been allocated to acquiring new customers rather than retaining them. Many reasons have been put forward, but the predominant one has been the absence of a method of CRM, that is cost effective, highly targeted and enormously efficient in delivering relevant brand communications to business customers. Email has changed all this and offers all of the above.

Where the value lies

According to McKinsey & Co., 71% of business internet users now believe that the greatest value of online interactions is in the pre- and post sale content, as well as within the seriousness of which customer relationship management is being practised and witnessed by the proportion of leading companies who have appointed a senior Head of CRM (44%). Pitney Bowes also recently released research that more marketing budget is being devoted to developing existing customers than winning new ones with B2B leading the way. However you look at it, customer development is now firmly in the driving seat over prospecting.

This change in marketing priorities is filtering through to the wider economy. At the end of September, media group Emap said it expected to report a two per cent drop in underlying revenue for its half-year just ending as “trading conditions have remained tough.” What stood out was that the firm reported that one of its weakest performing sectors was B2B non-recruitment advertising (with funds being diverted instead to B2B e-CRM programmes).

It should be added that a move to B2B e-CRM has, in small part, been encouraged by the launch of the Corporate Telephone Preference Service (CTPS) in 2004. Although take-up has been less than expected, there are still 770,000 numbers registered and in the eight months to the end of August 2006, another 135,000 new numbers were added to the list.

The challenge of B2B e-CRM

Despite e-CRM gaining ground, there is still some confusion over its meaning. One of the best definitions I’ve heard is that e-CRM is not just marketing, customer service, self-service web applications, sales force automation tools or the analysis of customers' purchasing behaviors on the internet but all of these initiatives working together. This close integration enables an organisation to respond more effectively to its business customers' needs and to market to them on a one-to-one basis.

It is this integration that is perhaps the greatest issue facing e-CRM. Demand and revenue management, customer fulfillment, and follow-on dialoguing with the customer all have to work together seamlessly - a sophisticated challenge for any B2B marketer. Rarely, however, do you find marketing and service departments working together on evaluating email management systems and for B2B marketers this is a major hurdle in getting e-CRM right.

The solution is to think about integrating channels and customer interactions by processes rather than hardware and software. Once the processes have been understood, installing the software and hardware is a far simpler task and serves to implement the designated business and marketing plan rather than the other way round. Effective e-CRM therefore not only helps solve the B2B marketing dilemma, it also profoundly impacts a way a company organises itself by forcing it to structure itself around its customers’ demands.

A recent report by AMR research reveals that the future of B2B e-CRM will involve a revolving cycle of multiple interactions with no defined starting or ending point. For example, if one can turn around a complaint with a discount of an additional product, rather than taking money off the current one, you can still drive revenue and continue the customer dialogue. This is what email does best. If B2B marketers and customer service departments managers can work together to develop the processes for this type of interaction, B2B businesses will hold a strong competitive advantage.

By Steve McKinley, head of DM and director at Geoff Howe Marketing Communications