by John F. Hood, President

There are many revenue opportunities hidden in B2B, but the most important may be institutional customers, including hospitals, medical practices, schools, school districts, governments and churches. The key to generating optimal returns from this market is to understand which strategies work best.

Institutions are difficult for marketers to see clearly because they are obscured by SICs. What are the revenues of a school? What is the SIC for diagnostic imaging centers? How many employees does a church have? When you apply business rules to institutional marketing, you end up in the B2B blind spot. You need to employ precise and targeted strategies to reach institutions because institutions don’t act like businesses, don’t buy like businesses, and can’t be segmented like businesses.

Here is why B2i prospects deserve your attention:

• Institutions are big—both in purchasing power and size. They represent one-third of the U.S. economy—$4.1 trillion in spending.
• Institutions have budgets that are equal to Fortune 500 companies. Dow Chemical is number 40 on the Fortune 500 list with $49 billion revenue. The City of New York has approved a $59 billion budget for FY08.
• According to D&B, the average institution is almost twice as large as the average business based on number of employees. Businesses average 8.5 employees per location while institutions average 16.7.
• Institutions are stable while businesses are born and die at the rate of over 10% per year.

In other words, institutions mirror your best and most ideal business customers.

You need to use business databases to reach businesses and institution databases to reach institutions. Compilers of institutional databases focus on narrower slices of the B2B universe because a one-size-fits-all approach doesn’t work.

B2i compilers understand how the subtle nuances of the institutional market impact the results of a campaign. For example, a large church located in a wealthy metropolitan area will generate an entirely different response than a small church in a poor rural area. With increasing marketing costs, it’s important that your offer reaches the right person at the right place.

There are more than 2.2 million institutions hidden in the B2B blind spot. By developing marketing plans strategically focused on the institution market, you can improve your profits, response rates, and the lifetime value of your customers.

Published in The DMNews Essential Guide to Lists, Database Marketing and Data Services , January 2008. Click here to download the complete DMNews Essential Guide.