Palm Launches New Product with 5-Step Email Campaign

CHALLENGE

Usually when Palm ™ launches a new version, they use
a wide variety of media -- TV, print, radio and online -- to
build awareness. But this January they were on an unusually
tight deadline.

The new Palm i705 was initially supposed to be launched in August
2001. But, typical of high tech deadlines (if not usually
Palm's), the date slipped by almost six months. Palm wanted
both to recognize revenues from the launch extra-quickly, and to
get maximum impact from a quick marketing campaign before the
rest of Palm's Spring 2002 product launches could overshadow it.

Together with Palm's agency of record AKQA, David Westendorf Palm
Inc. Director of Wireless Service Marketing, decided to diverge
from the usual multi-channel campaign and go 100% online instead.

The team at Carat Interactive (formerly Lot21) who had been working
with Palm's relationship marketing group to build the Palm online
store, manage the Company’s customer database, and streamline
CRM, pitched for a role in the launch. Carat's VP Relationship
Marketing & Emerging Media Barry Peters says, "We came in and
said, 'You've got a great, very, very solid responsive user base
that this product is targeted perfectly for.'"

Westendorf agreed to let Carat test an email and online direct
response campaign to users. The new Palm was priced at $449.
Now Carat had to prove they could sell it with email.

CAMPAIGN

First Westendorf carefully delineated the roles that
each of the two agencies would play and helped both teams
coordinate messaging and media buys. AKQA was to build awareness
by rolling out a branding campaign across the Web. Carat was to
handle online direct response and leverage the installed user
base.

Peters says of working in conjunction with other agencies, "You
need to get in the same room as soon as possible and lay down
ground rules. It's very easy to butt heads, even when you do
identify territories. For example, 25% of our campaign was
online media buying and we were very careful not to step on AKQA
buys both for cost reasons, and because you don't want two
agencies both calling CNET with two different messages.
Technically with pre-launch products if we were both to call and
we didn't have the same story line, it could be problematic with
non-disclosure agreements."

He adds that in this case, "We had very good communications
conduits within Palm. Palm lead that charge and gave very clear
direction."

Next the Carat team developed a five-part campaign. (Link to
creative samples of all five parts at the end of this Case
Study):

Part #1: Pre-launch excitement generation email

Palm users tend to be very passionate about the product. Last
summer when the i705 was initially supposed to launch, the user
community had been frothing with excitement. After things
were delayed, that excitement had died down. Peters says, "The
big marketing challenge was that the hype had subsided. The fear
was they'd now say, 'So what?' We needed to re-stimulate
interest."

More than 3 million of Palm's over 15 million customers had
already opted in to receive email news and notes from the
company. In early January, a couple of weeks before the
official product launch, Carat sent these customers an email from
Palm reading:

"Psssst.

Dear [firstname],
All we can say is that the newest Palm™ handheld
is coming. Very soon. Stay tuned for more details.

Tell a (discreet) friend."

A week later, the list received a second follow-up email offering
them a chance to reserve a new Palm at the store.


Part #2: Day-of-Launch personalized, direct response email

On January 29th, all Palm registered user opt-ins received a
personalized email with a very elegantly photographed image of an
i705 at top, and the headline "When you're done being speechless
you can communicate like never before."

The customers who had responded to the reservation offer in the
previous email were told also, "And since you were one of the
first to reserve one, you'll get FREE overnight shipping when you
place your order before 11:59 PST on January 31, 2002. That's
right, you'll have it in your hands tomorrow!"

This emailed letter also contained a list of the benefits of the
new product -- especially its 24/7 access to email -- however,
rather than send every Palm owner the same generic list of
benefits, Peters' team split out Palm's registered user database
into multiple groups. Each group received a slightly different
benefits description depending on which Palm or Palms they
currently owned.

Peters explains, "We targeted messages based on the upgrade
benefits. The primary indicator was the current product owned,
although we also talked differently if you were a multiple buyer.
It was a lot of fun. The general message is about always having
instant access to email, however for example if you own a Palm 3
they require triple A batteries so we said, this has a
rechargeable battery. Palm 5 has a rechargeable battery already
so that was not a key differentiator."

Peters also notes that the campaign's copy could "cut to the
chase" more than a typical branding campaign would simply because
installed users do not need education on general Palm issues such
as how the operating system works. They know this stuff already.

This does not mean the copy was super-short. The letter was a
solid two-pages long with plenty of detailed bullet points.
Peters explains, "We loaded the email with everything you needed
to make a purchase decision. We didn't need to drive you to a
more information page. Rather than making that extra click
through a marketing page, we just drove directly to the order
page."

The email also featured a toll-free 800 number for those users
who did not want to order online.

Part #3: Post-launch follow-up email

Peters' team then sent out a series of three successive emailed
follow-ups, one per week. Again, they created multiple versions
of each follow-up catering to different types of owners.

Each follow-up focused on a different specific feature and offer.
The first talked about "instant email", the second spot lit the
best way to access Web content via the i705, and the third
discussed software add-ons such as dictionary, digital image, and
games cards.

Again, each email presented a limited time offer -- for example a
discounted Palm mini-keyboard and free ground shipping with your
new i705 if you act now.

Again, the copy was long and detailed, and included a toll-free
phone number as well as a link directly to an online order form.

Part #4: A mention in Palm's customer email newsletter

According to Peters, Palm's regular newsletters for customers
who have opted-in, get an "abnormally high" open rate because the
customer base is so enthusiastic, and the customer stories about
how Palms made their lives easier are fun to read.

His team then coordinated with the newsletter editor to make sure
the i705 got four fat mentions scattered through the February 6,
2002 issue. Each mention included a link to the store.

Part #5: Online outreach to non-registered Palm customers

In conjunction with the email marketing campaigns, Carat spent
about 25% of their allotted budget in a direct response outreach
campaign on sites likely to have a high population of current
Palm owners, and via the Vindigo wireless network.

While banners were included (carefully designed to maintain brand
image while being more direct response oriented than AKQA's
branding banner campaign), much of Carat's investment focused on
co-registration offers, whereby Palm owners registering at sites
such as The New York Times, were invited to check a box to join
the Palm owner opt-in list.

Whenever possible, Carat included Palm's logo next to the offer
check box to raise brand awareness and response.

As names joined the list from these efforts, they were dropped
into the flow of email messages currently being sent in steps
#1-4.



RESULTS

Palm's Westendorf is happy to report that 13,000 Palm i705's were sold in the first ten days of the launch.
This includes retail sales, however, about a third of the 13,000
came through ecommerce. In fact, the Palm online store set a
single day sales record by lunch-time on the Pacific Coast on
launch day.

Westendorf also notes that due to special accessories and
services offers, the average purchase was around $479, $30 higher
than the i705 base price. "That's a pretty good average!"

Interestingly, about 60% of the orders generated by the direct
response campaign came in online, while 40% came in on the toll-
free phone line. Peters says, "Offering an 800 number always
dramatically increases response. It is classic direct marketing -
- offer users the ability to order any way they want."
Link to samples of the campaigns:
http://www.marketingsherpa1.com/palm/sherpa_palm.html
http://www.caratinteractive.com
http://www.palm.com