B2B marketers face growing risk from dying businesses

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By: Wise Marketer Staff |

Posted on January 26, 2007

With a record 79 companies in the UK going out of business each working day in 2006, business to business (B2B) marketers who don't pre-screen their marketing database run an increasing risk of exposing themselves to bad debts as well as wasting resources by targeting prospects that may soon close down, according to information solutions provider Experian.

Corporate failures jumped by 10.7% in 2006 (to 20,067), according to the latest figures from Experian (1,938 more failures than were recorded in 2005). This is the highest annual number of corporate failures recorded since Experian began reporting in 1997, and represents a growing threat for those marketers targeting business customers. The number of business failures in Q4 2006 (a total of 5,837) was also the highest number compared to any previous quarter since Experian's records began.

Marketing responsibly
According to Nick Frazer, director of Experian's B2B marketing division, the record number of business failures in the UK has become a major issue that B2B marketers can't afford to ignore: "It's time for marketers to take greater responsibility for the quality of leads they generate, and ensure their organisation is not lumbered with the cost of insolvencies or bad debt."

Pre-screened data
The company says that pre-screening prospect data (using services such as those provided by Experian) can help marketers avoid unnecessary sales resources being wasted on high-risk prospects, and can significantly improve conversion rates, Experian reports. When the stakes are high enough, there is no reason why B2B marketers should not use credit scoring information to spot prospects that are unlikely to be able to fulfil their obligations, pay their invoices, or become bankrupt.

Regional failures
During 2006, only the North East (-15.2%), the City of London (-11.9%), and Northern Ireland (-4.2%) showed a decline in business failures over the previous year. By contrast, business failures increased in the following regions:
·  London (+29.2%);
·  Wales (+22.8%);
·  Scotland (+16.7%);
·  South West (+9.6%);
·  East Anglia (+9.1%);
·  North West (+7.9%);
·  East Midlands (+7.2%);
·  West Midlands (+6.6%);
·  South East (+2.9%);
·  Yorkshire and the Humber (+2.1%).

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