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Oct 30, 2001
Case Study

Mixing Direct Mail, Web, Email, and Telemarketing to Gather

SUMMARY: While this is a useful Case Study for B-to-B marketers who are responsible for feeding their sales force high quality leads, we also recommend that B2C marketers and ad agencies read it as well. Why?  Because it reveals test results that affect everyone who publicizes a promotional URL using offline media such as space ads, TV or direct mail. After you learn the secret, you'll probably change the way you do promotional Web addresses forever! Read on.
Many B-to-B marketers are reducing the amount of money they spend on traditional marketing these days because it's simply more expensive than some types of online marketing (especially email.) Yet at the same time, they don't want to abandon their tried-and-true offline marketing tactics all together. How can you mix online and offline for campaigns that are both powerful and cost-effective? Here's a Case Study that may inspire you…


Web design firm eMagine LLC has a long sales cycle, running anywhere from 30 days to 36 months. So, as the economy faltered this summer, President Bill Gadless, couldn't stop marketing and wait for better days to come. Instead he needed to invest in a campaign that would generate sales leads, which in turn would generate new business for late 2001 through 2003.

His target are B-to-B companies in the New England area with at least $100 million annual revenues who would be interested in spending $100,000 on Web design and/or consulting. As you might guess, these folks are already inundated with pitches from competitors' firms.


Instead of rushing into a marketing campaign to generate leads, Gadless first started a spreadsheet to figure out how much a new customer was really worth -- and hence how much he could spend to acquire one.

He says, "We did a lifetime analysis. You plug in real world numbers of what they would spend in the next three years, including the initial engagement, licensing development and consulting, plus acquisition costs and end up with an average profit on an average customer." He based his initial figures on current customers, and plans to keep the spreadsheet constantly updated as he moves forward. He notes that when it comes to learning about lifetime value, you're never all the way through the process.

Next Gadless purchased a prospect list from the iMarket database. He was very picky, selecting names based on tough criteria including SIC codes, zip codes and company size. This meant the list was more expensive, but he figured he'd save money in the end by not marketing to unqualified names. So, the final list was fairly small but choice.

Although Gadless purchased company names, snail mail addresses and phone numbers, he did not purchase executives' names because it's often more cost effective and accurate to gather them yourself from companies' Web sites and by simply calling them. No matter how fresh the list you purchase is, business lists on the rental market (as well as directory listings) are usually outdated by at least 20% because people change jobs more quickly than list owners can keep up with efficiently. This doesn't mean the mailroom won't forward your postal mail to the new person in that position, but it can mean your campaign will be less effective -- especially if you plan to include telemarketing.

So, Gadless had his in-house telemarketing team gather and verify multiple contacts for each company. He explains, "Many individuals in an average company could contribute to the buying decision. One our case the CEO, the VP Marketing, the VP Sales, the head of IT and the webmaster." He adds, "Even though the Webmaster never writes a check, they do represent the potential to contribute to a marketing decision. He or she may raise their hand and get us in the door to give a presentation." And once you can get a foot in the door, the crack can be easily widened!

Gadless and his marketing team created a multi-step campaign to convert these names from cold prospects into hot sales leads:

Step #1 Direct Mail

Gadless stuck with a classic DM package that had done well in the past for eMagine. It included a #10 (business-sized) closed-face envelope with a live first-class stamp, a brief page-and-a-half letter focusing on a free offer, and a color flyer plus business reply card also focused on the same offer. He says, "Every piece of your direct mail should be focused on the offer. You can be briefly educational, but really geared towards the offer at all times."

His offer was a free search engine placement analysis. Respondents needed to send in five keywords and the names of a few competitors to get their report.

Like most classic direct marketers, Gadless believes you should never, ever drop a campaign without including a test or two to learn from. He's tested envelopes (white vs brown kraft, teaser copy vs no copy, and a company logo vs just a return address) and response options (postal mail, a toll-free phone number, and a special Web site.)

Step #2 Web Site Landing Page

Instead of sending prospects to eMagine's general home page, Gadless had a special landing page constructed for the site. This meant prospects wouldn't go 'off course' when confronted with the variety of options a general home page offers.

In the past, Gadless has tested promotional Web site URLs that start with the promotion code versus ending with it (i.e. vs. with astonishing results. Turns out people are lazy typists, and many will type in the ".com" address without sticking the extra "/promo" on the end. So they end up at your home page, even though you wanted them to go elsewhere. (**Note: this is very valuable information for all marketers!**) Therefore, Gadless used a URL that put the promo in front of the ".com" instead of after it.

Step #3 Outbound Telemarketing

Five business days after the first class mailing dropped, eMagine's in-house telemarketing team began to call each name on the prospect list that hadn't already responded. The mailing list was chopped into pieces and drops were staggered to make this easier to handle.

Like most business callers these days, they generally reached voicemail rather than an actual human. Gadless had already given them a voicemail script for this eventuality. He says, "It said they were simply calling to follow up on the free report offer. We'd like to run the report for them, and all they needed to do was call back and give a few keywords and competitor names."

Initially Gadless had his telemarketers make three attempts over a three-week period. Then, as he explains, "We had significant response on call three, so we went to four, and again got response. Recently we moved to five over five weeks, and we're still getting response! It's amazing. I want to exhaust the list until they're not interested in responding anymore."

Step #4 Seminar Presentations

All responders to the free report offer were immediately classified into four categories:

"a" leads - Hot, they are ready to buy site design services now.
"b" leads - Warm, a sale is not quite impending, but the lead is a pretty qualified decision-maker who seems interested.
"c" leads - Chilly, they simply accepted the offer out of curiosity but have no current plans to hire a Web design firm and no interest in being sold on it.
"d" leads - Don't bother, they are the same as "c" leads, only they reveal that they could never afford design services remotely near the $100k price point.

Instead of simply handing over the "a" and "b" leads to his sales reps to storm, Gadless invented another free educational offer.

He says, "Rather than just saying 'Let us sell you', you offer to conduct an executive workshop that's totally educationally focused on whatever service it is they're most interested in -- driving traffic, overall emarketing strategy, or just analyzing a site to see how well it engages visitors." Currently his team has a choice of four different workshops to offer hot and warm prospects for free. Although the workshops are "prepackaged" including Powerpoint slides, the sales rep will alter them slightly to match a prospect's needs.

The goal of each workshop is to get a sales rep into the building, meeting personally with a group of decision makers, and hopefully impressing them enough that they ask for a related proposal.

Step #5 Email Marketing

Gadless uses a non-aggressive email marketing campaign for the "c" leads that opt in to receive it. He says, "We only want to send anticipated, relevant, personal mail that they asked to receive. Email is a little more intrusive. You don't have to take a phone call or open direct mail. Email is in front of you, on your computer. If used intrusively, it's more inappropriate than telemarketing or direct mail."

Therefore, although both the initial direct mail campaign's business reply card and response Web site ask for email addresses, people had the choice to voluntarily check a separate, additional box to receive ongoing communications aside from their free report results.

The "c" leads who check that box then receive an ongoing series of email communications from eMagine every month or two with a new offer such as a free white paper or B-to-B online marketing tips. The goal is to use email to keep leads warm until they are ready to act. Then, hopefully eMagine will be top-of-mind and be invited to present along with other Web design firm candidates.

Step #6 Rinse and Repeat

Gadless feeds all the non-responder names to the first direct mail and outbound telemarketing campaigns back into the hopper and starts the process all over again eight weeks later. And so on, and so on.


Wow. eMagine's sales team are in the final rounds Dof closing more than half a million dollars in potential business from hot sales leads generated from the initial campaign which launched in late July 2001. (In fact -- knock wood -- Gadless expects to close on two new major accounts within the next 10 business days despite the slowdowns caused by Sept 11th.)

He says, "Our system today is not rocket science, but it's producing more leads for us than anybody I'm talking to; and, we talk to a lot of companies doing B-to-B business."

Here are some interesting stats from the campaign so far:

- The brown kraft envelope with urgent teaser copy (such as "Your domain name is in jeopardy") and plain white envelopes with just a typewritten address and eMagine's logo work the best. Previously handwritten notes on envelopes also boosted response, but due to recipients' anthrax concerns, Gadless doesn't use them anymore.

- Out of a total average 2% response rate from the direct mail piece, the majority, 2/3, respond using the special Web site. Just 1/3 respond via postal mail or phone.

- Outbound telemarketing efforts add another 3-4% response on top of direct mail responses.

- Almost 1/3 of initial respondents fell into the "hot" or "warm" categories and agreed to schedule an educational workshop with an eMagine sales rep.

- 60% of these workshops have turned into requests for proposals!

- 25% of the "chilly" leads that receive an emailed promotion click through to learn more.

- The sales leads from the "rinse and repeat" cycle are justas good as the leads generated by the first round.

- 95% of respondents who used the Web site or business reply card voluntarily opted in to receive additional emailed educational offers, so many cold leads may get warmer someday.

eMagine LLC
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