Email Sponsorships Outperform Broadcast Campaigns to Rented Lists

CHALLENGE
Like many technology marketers, Greg Govatos, VP of Marketing for Chutney Technologies, had a complicated product to explain, "We need to educate customers about a problem they're probably not even aware of."

To complicate matters, his target audience was busy executives in charge of multi-million dollar investments. "How do you get the attention of someone who gets a hundred voice mails a day from vendors?" Plus Chutney's product costs $150,000. It would take more than a single contact to convert prospects into customers.

Traditionally, Govatos had spent the majority of his budget on offline marketing tactics; however, two traditional big-ticket tactics just were not working anymore. Road show face-to-face seminars in hotels did not draw eager prospects the way they used to, and the costs were growing prohibitive. Exhibiting at trade shows was also less cost effective than it used to be. Govatos says, "We have really cut back. We only use them to launch new products."

Govatos needed to find new cost-effective tactics to gather highly qualified leads and educate them.

CAMPAIGN
After reading up on the possibilities of email marketing, Govatos committed to a three-point plan to build an opt-in list for Chutney, so he could educate prospects via email instead of at expensive in-person events.

Step #1. A Web site makeover to gather opt-ins

Although Chutney Technologies Web site had been up since 1999, like many B2B sites, it was not specifically designed as an opt-in lead generation vehicle. Govatos took three steps to remedy this:

a. First, he created a company privacy policy, which was written in plain English and clearly explained that visitors' contact information would not be distributed. (See link below.)

b. Then he added an opt-in box to the home page, so visitors could join the list immediately without digging deeper into the site. He also placed a link to a sample newsletter issue under the opt-in box, because many newsletter marketers say prospects are more likely to sign up if they have access to a sample.

c. Finally, he had a campaign-landing page created, that he could link to in all of his outbound marketing efforts, so prospects would click directly to a page specifically built to collect opt-in sales leads rather than Chutney's home page, which has a variety of purposes and navigation options.

This landing page (link below) collects prospects' basic contact information in exchange for offering an informational piece, white paper, or a Webcast. The page also includes an opt-in box for the email newsletter and a reassuring link to Chutney's privacy policy.

Govatos consciously decided against requiring contact information that might annoy a prospect. He explains, "The phone number was not required. I don't want to think that if I'm replying to an offer I have to expect a phone call the next day. We asked for company, title, name, and email address. These would help us rank this lead as a prospect."

Step #2. Email broadcast campaigns to rented opt-in lists

Govatos decided to test renting opt-in lists from both big-name publishers of offline periodicals and specialty content providers.

His creative included an educational angle, as well as a soft offer. He explains, "With email blasts, you can deliver in HTML, which is nice, because you can include a diagram of where the product fits - which is essential when the customer doesn't even know that he needs your product." (These useful diagrams are also now a part of Chutney's redesigned Web site so all visitors can learn from them.)

Govatos' emailed offers were for informational materials, a free Webcast, or a white paper, which readers could receive by clicking on the link and entering their data on the landing page. Interestingly, although these campaigns were 100% electronic, Govatos' offers were sometimes for real-world items, such as reprinted hard copy articles from related technical journals.

Step #3. Email newsletter sponsorships.

Govatos carefully tested newsletter media buys, running his ads in a variety of newsletters including news-of-the-day from big-name offline publishers and niche newsletters from specialty content providers. He notes, "I never do any campaign with a newsletter until I subscribe to it first. I ask our own engineers which publications they read."

Again his creative, in each case written specifically to target each particular newsletter's readers, mixed an educational angle with an appealing soft offer, "In our ads we tell a story to get people more interested in getting more information." Here is a sample of one of Govato's actual ads:

---- Sample ad -------
SOLVING WEB SERVICES PERFORMANCE AND SCALABILITY PROBLEMS
How will a Web services app perform? How will it scale? - The
buzz about interoperability standards (SOAP, etc.) has put these
operational questions on the back burner. - But don't take your
eye off the ball. Web services transactions contain overhead that
*will* cause bottlenecks. - Build the proper infrastructure
today, so your application doesn't suffer tomorrow. - Click below
for a FREE TECHNICAL GUIDE:
http://www.chutneytech.com/resources/index.html
---------------------

Aside from testing newsletters and creative tactics, Govatos also tested the position of the ad, top versus middle of the newsletter, since the middle position is typically only 70% of the price of the top position.

As Govatos' opt-in list grew from on the sign-up form on the home page, the email blasts, and the newsletter sponsorships, he was ready to start sending follow-up email campaigns to it. However, unlike many marketers who send their opt-in lists a one-size-fits-all series of communications, Govatos targeted by niche audience and timed his communications for greater impact.

He explains, "If I have some relevant information or something of interest, I'll send it. I'm not looking at regularity, looking at relevance of the content. I send targeted messages based on where they opted-in from; we track the source of the opt-in when they respond to an offer in an email blast or a newsletter sponsorship."

He adds, "There's always an offer included. I never send an attachment. I always have them request it. This also helps us measure response. We can look at the opt-in list and segment it. It's those people who have enough information who get sales offers. If the subscriber has requested multiple offers, then they get a sales offer."

RESULTS
More than 1200 highly qualified big company executives with budget authority for Chutney's $150,000 product have voluntarily added their names to the Company's opt-in database to continue receiving educational materials.

This opt-in list performs extremely well as a continuing marketing communications vehicle. "When you start making offers to this list, the response rate skyrockets," says Govatos. "We offered a free copy of an article about us published in IEEE magazine. We got a 25% response rate. When we offered an executive conference call with our CEO, we got an over-20% response rate to that offer."

He summarizes, "Building this opt-in list is well worth the effort and dollars, because it's all free from now on. That's the Holy Grail."

Here are some more results from Govatos' marketing tests:

- Broadcast (aka "blast") email campaigns

Govatos says, "In custom email blasts, we have seen HTML draw 2- to-1 better." He's also found Thursdays are his best day of week to send an email campaign out on. "Early in the week, people are trying to focus on getting ramped up. People have checked out on Friday. On Thursday they still have focus. It's the day I typically catch up on email."

- Email newsletters

Unlike broadcast campaigns, Govatos has noticed no or little difference between the success of HTML versus text for newsletter sponsorships. "It doesn't seem to matter." This may be because prospects are reading email newsletters for content, not pretty graphics.

Newsletter sponsorships have proven to be more cost-effective than renting broadcast lists. Govatos says, "Email blasts work well, but newsletters are better for the money. I typically pay four times the CPM on the email blast, but I don't get four times the click through or four times the opt-in. With the newsletter, I get the exposure even if I don't get the click through. I also know how many get to the form, but don't fill it out. At least half who get to form fill it out. I end up with about the same absolute number."

The niche newsletters significantly out-performed more general newsletters, partially because Govatos made the effort to tailor creative to each vehicle.

He explains, "Specialty content providers did much better. You can align the product with the specific audience - with very highly targeted content in a specific tech area. It's much more effective than news-of-the-day from a big-name magazine. The message can fit in with editorial content being offered - because I know what that's going to be on a narrowly targeted newsletter - so we don't stick out like an ad."

Although lower ad positions seemed more cost effective than top positions, results showed the top was worth paying extra for.

Govatos says, "I will fight tooth and nail to get the top position. At minimum, get the table of contents, which everyone will read. That's much better than middle or at bottom. We've gotten middle positions a couple of times, and response rates were about half of the top position, which doesn't make sense when you're paying 70% of the top position. I'll only do that if there's a newsletter that's infrequent, and the top position is sold out, and only until I can get the top position."

He adds, "When you find something that works, buy in advance. I've locked up the top position every Thursday for the next four months in my favorite newsletter. That's where I'm getting the highest response rates. The other cool thing about locking up prices and space is that it's based on current subscribership. All their growth is free for us."

In conclusion Govatos notes, "Basic fundamentals don't lie. A lot of the things I'm doing I gleaned from a Case Study I read in MarketingSherpa about Seattle Lab. I took notes and saw what worked and what didn't. They've worked the same way for me."

Links:
Chutney Technologies: http://www.chutneytech.com

Landing page:
http://www.chutneytech.com/resources/index.html

Privacy Policy:
http://www.chutneytech.com/registration/privacy.cfm

Seattle Lab Case Study:
http://www.marketingsherpa.com/sample.cfm?contentID=1800