August 27, 2008
Case Study
SUMMARY:
Marketers for companies that sell through distributors and resellers have a hard time forging relationships with end users. They often don’t know who is buying their products or which prospects are open to receiving marketing materials.
Read how a marketer used a direct mail campaign to promote a specific product line and capture names and email addresses for nurturing. The campaign more than tripled sales of one product and added more than 100 names to their prospect list.
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CHALLENGE
IMC Networks, a networking equipment company, sells exclusively through distributors and resellers. This constrained the efforts of Tim Templeton, Director, Marketing, who must abide by an IMC policy that prevents channel conflict by using a single pricing strategy with discounts based on volume of sales.
Templeton can’t engage in widespread channel marketing with systems integrators and resellers. So, this makes it difficult to forge direct relationships with customers and prospects. His team uses search marketing and industry trade shows to reach out to customers, but that tactic also has limitations.
“I’m trying to find [a] way to drive people to our products that may not be looking for a new vendor,” says Templeton. “When you do Google or Yahoo! ads, you’re only going to get people looking for a change. You’re not going to reach people who are happy with their product.”
A major distributor for IMC offered a direct mail program that allowed vendors to send mailings to up to 5,000 customers who had purchased the same or similar products in the past. Templeton liked the idea, but the one-time list rental service still did not let him see who was on the mailing list.
Templeton needed a tactic that would reach prospects not actively searching for a new vendor. His goals were to boost sales for certain product lines and collect email addresses from prospects to enter them into a lead nurturing process.
CAMPAIGN
Templeton used a simple postcard with two goals: promote one of the company’s lower-cost products; invite recipients to go to a landing page to register for a related white paper and download more product information. Here are six steps they took:
-> Step #1. Choose product line to promote
The team built the campaign around the company’s SFP products – electronic transceivers that plug into network switches to accommodate fiber capacity upgrades. Without an SFP, network operators may have to replace all their switches when they upgrade their networks.
They chose this product line for several reasons:
- Relatively low price point, which meant they could see an immediate sales impact from their promotion. SFPs cost between $37 and $300.
- IMC’s SFPs tend to be cheaper than their competitors, providing an easy value proposition to convey in a direct mail piece.
- IMC wasn’t well known in the SFP category. Templeton wasn’t seeing strong sales for that product line through the distributor providing the mailing list. “That was really a flag to me that we were not reaching the market and they were not aware that we’re selling these products.”
-> Step #2. Use list of similar SKUs to assemble mailing list.
To assemble a mailing list, the distributor provided up to 5,000 customers who had purchased a similar product, based on SKU. Templeton had a problem, though: The distributor didn’t have a unique category for SFPs.
Instead, Templeton targeted:
- Customers who had bought network switches with SFP ports, figuring they may also be in the market for SFPs.
- Customers who had bought similar products from competitors. This required manually analyzing SKU numbers and having the distributor collect names from their database.
-> Step #3. Mail postcard promoting SFP product line
Templeton’s team created a theme for their postcard that highlighted the company’s larger choice of SFP products than its competitors. The campaign’s tagline was “Cast Your Vote for Choice.” Imagery on the card resembled a ballot, showing checked boxes next to bullet points detailing product capabilities.
Key elements of the card also included:
- Prominent text noting that SFPs start at $37 to underscore the company’s price advantage.
- Table listing the four most popular SFPs, along with product numbers and a brief description of capabilities.
-> Step #4. White paper offer to capture email addresses
On the back page of the postcard, the team added a note about a “Bonus” offer – the opportunity to download a relevant white paper by visiting a unique URL.
- They chose a white paper that detailed the benefits of a type of networking technology called single-strand fiber, because the company’s SFPs support that technology.
- They created a new landing page for the campaign that included:
o Same photo used on the postcard, with additional ballot imagery to match the tagline
o Registration form, requiring name and email address and with optional fields for company name, phone number and promotional code
o Link to a PDF of complete SFP product information, with product numbers for easy ordering
o Pre-checked opt-in box to request additional email communications
Visitors who registered for the white paper were sent an email with a link to download the PDF. That way, Templeton’s team could verify whether they had submitted a valid address. Bounce-backs were not added to the company’s marketing database.
-> Step #5. Nurture names collected in white paper registration
The team added the valid names and email addresses collected during the campaign to the company’s CRM system. From there, they could engage in further nurturing of those prospects.
- The inside sales team could periodically call prospects to ask qualifying questions, such as whether they had any upcoming projects requiring SFPs or other equipment.
- Registrants who opted in to receive additional email were sent:
o NetNews, the company’s email newsletter that features new product information and technical articles
o Announcements of new white papers available
o Announcements of company appearances at trade shows
-> Step #6. Monitor sales through distributor to gauge impact
To determine ROI, Templeton’s team had to monitor sales of SFPs through the distributor. Because this was the only ongoing marketing at the time that drove prospects to that distributor, the team could be confident of attributing sales increases to the campaign.
RESULTS
The campaign achieved both of Templeton’s goals: There was an immediate impact on sales, and they added new names to their marketing database.
- SFP sales jumped in one month to 14% from 4% of overall revenue from the distributor.
- Overall revenue from that distributor also went up 30%.
“We’re pretty excited about that, because this tends to be a recurring purchase,” he says. “Every switch that’s sold, you need an SFP, and when you need to upgrade your networks, you need new SFPs.”
Initial sales allowed the campaign to break even.
The white paper attracted more than 100 registrations for lead nurturing – or roughly a 2% conversion rate, about average, according to MarketingSherpa benchmark data on direct mail to third-party lists. But Templeton expects their new, direct relationship with end users will continue to pay dividends.
“We’re getting some nice results and are already at breakeven for what costs are,” he says. “We figure we’ve got mind share with these people, and expect to see recurring revenue down the road.”
Useful links related to this article:
IMC Networks Creative Samples
http://www.marketingsherpa.com/cs/imcnetworks/study.html
IngramMicro provided the mailing list:
http://www.ingrammicro.com/
IMC Networks
http://www.imcnetworks.com/
