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Nov 14, 2000
Case Study

IBM Grows Sales by 30% a Year with Targeted Web Sites and Communications

SUMMARY: No summary available.
CHALLENGE

Back in 1995 IBM faced a major sales challenge. Gold Service Executive Dan Flack explains, "We primarily used face-to-face reps to cover most customers. But the market was changing. Our competitors were providing products and services without sales reps; so our customers were demanding more commodity-type pricing and a lower level of service. They asked 'How can these people do it at a better price than you can?'" IBM knew face-to-face sales reps brought a level of customer satisfaction their competitors couldn't beat; but the price was just too high.

CAMPAIGN

IBM's marketing team decided to test a new type of service. They named it "Gold Service" to imply customers getting it were special. At first a handful of customers were chosen, then over the next five years the program expanded to more than 300 corporate customers.

Each Gold Service corporate customer gets access to a special IBM Web site developed just for their organization. This password protected Web site has their company name on the home page, and can include a wide variety of useful account information, such as: technical data and user tips for the IBM products they've purchased; email and phone access to customer support reps who are well-versed in their particular account; news on special IBM offers just for their company; a product catalog with items specially selected for easy integration into their current systems; and more.

IBM's next challenge was to get clients to use their special Web sites. First the Gold Service team sends special Welcome packages to every executive and IT staffer at the client's facilities who might like access to the site. The contents of the Welcome package's oversize envelope are what you might expect -- a nice letter discussing their member benefits, a brochure, and a special membership card featuring Web site passwords and phone numbers. Plus, there's something extra -- a personal profile survey that everyone is encouraged to return so IBM can personalize all further communications to each staffer. Questions include whether they prefer to be contacted via mail or email, and what their specific areas of interest are. Interestingly, since the program started, virtually 100% of members have requested email correspondence instead of hard-copy mail.

Survey results are entered into a customer database, and IBM then sends a monthly communication to everyone enrolled in the program. Gold Service Manager Dianne Lucca explains, "We've really evolved to one-to-one messaging. We send monthly communications based on their area of interest. Depending on their profile one person could get information on printers and a person two floors down might get news on large enterprise storage. In the old days we sent everyone the same thing based on what was installed in the account. But people don't have time to get everything now!"



RESULTS

Average revenues for accounts enrolled in the Gold Service Program increase by more than 30% per year.

Part of this is due to the fact that since the program has begun, the contacts IBM has within each of these client companies have quadrupled. Flack explains, "We now reach 85% of decision makers. We have customers actually come to us saying 'We just signed a big PC deal, can you get the word out to all my users all over the country?'"

Personalized email communications have also contributed to bottom-line growth. Lucca notes response rates to special emailed offers can reach as high as 16% with up to 22% of responses coming from colleagues of users in the database who received pass-along email offers.

NOTE: The Gold Service Program hasn't caused a reduction in IBM's face-to-face sales force. Instead sales reps now focus their time on more complex, high value sales transactions that the client services team and Web site can't handle. As Flack explains, "You can offload some of that operations stuff and allow them to focus on big deals."

Interested in seeing what one of IBM's customized Gold Service Web sites looks like? Dan Flack has offered to give any marketers who contact him quick access to a sample. To reach him email dflack@us.ibm.com

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