13 Percent Growth in B-to-B Marketing Transactions in 2005

There was a 13 percent increase in business-to-business transactions in 2005, led by small businesses that accounted for 81 percent of revenue and a 16 percent increase in Web sales, according to Abacus.

Based on information from a sample set of 0-12 month multi-buyers from the Abacus Alliance database, 6.2 million B-to-B contacts made 14 million purchases last year, resulting in $2.8 billion in sales. These numbers indicate a 13 percent increase in transactions and a two percent increase in buyers. Despite the double-digit growth in transactions, B-to-B sales rose only nine percent due to a three percent decrease in the average sale value, which dipped to $200 in 2005 from $207 in 2004.

Small businesses continued to be the largest sector for direct marketers, claiming 81 percent of 2005 revenue — an increase of 11 percent year over year. 1.1 million contacts at small businesses made a B-to-B purchase last year, spending a total of $566 million. Large business followed by spending $77 million, with medium businesses spending $52 million.

Although they purchased more frequently, small businesses spent an average of 32 percent less per contact than large businesses.

This year’s report shows that 40 percent of B-to-B sales occurred via the Web in 2005, a 16 percent increase year over year. These results indicate that B-to-B customers purchase online nearly 10 percent more than B-to-C consumers, who chose to purchase over the Web 31 percent of the time in 2005. The differences between business and consumer purchasing habits support what most marketers have long recognized: business purchases exhibit a different dynamic than consumer purchases.

Furniture saw the greatest jump in revenue in 2005, up 116 percent from 2004. Institutional Educational and Telecommunications followed, with 56 percent and 55 percent growth, respectively.