Like many marketers working for sales-driven organizations, Fred Richards knows what it is like to be a red-headed stepchild.
As MicroStrategy's Director of Marketing Strategies & Lead Development, he is responsible for campaigns targeting executives in the Global 500 who might purchase enterprise software with a starting ticket price of $85,000.
After MicroStrategy lost millions in 2000 and 2001, the marketing department was hard hit. "We took it on the chin during cutbacks," says Richards. "Our marketing staff was reduced by more than a third."
In 2001, in an effort to trim more expenses, the Company's management team also laid down a new rule: No more heavy offline marketing. No more TV ads, print ads in glossy magazines, or direct postal mail. They told Richard's team to focus on email because it was cheaper and more measurable.
A self-confessed geek, Richards was delighted with the opportunity to focus on such a measurable medium, but frustrated by the data collected in past efforts.
"Just because you emailed two lists and one gets a higher click rate, it doesn't mean it's best in terms of leads or revenue. But, at the time that's all we had to go on."CAMPAIGN
Inspired by an article on experimental design that he read in the Harvard Business Review (link to article below), Richards decided to build a new marketing and sales database.
First he and the team fed in every bit of data from past campaigns. "We put in two years worth of data in excruciating detail." It included not only what got prospects to click, but which campaign landing pages worked the best, and ultimately which clicks converted into sales.
The goal was to be able to perform regression analysis on the database to determine which marketing factors resulted in the best leads. Plus, each incoming lead could be scientifically scored as to if and when it was worthy of being passed to sales (or not).
Detailed regression analysis is very unusual in B2B marketing because the numbers in test cells are necessarily so small. "If we were to bring a traditional PhD statistician in here, he would probably quake at the size of some of the cells we were using," notes Richards.
However, Richards also notes that the medical community relies on similarly small test cells to test stuff like new drugs. "They don't have millions and millions of cases to test things on. They have to theorize what things will work from the results of hundreds. There's a science behind this."
Among the many things Richards learned from this regression analysis (see results below), one of the most critical was the fact that a lot of otherwise perfectly-good leads simply were not ready to be passed off to sales.
They might be the right person at the right company, but perhaps they were not in a decision cycle at the moment, or they needed a lot more education before buying.
MicroStrategy already published a monthly email newsletter to keep prospects warm; but Richards now had the database and scientific backend to go far beyond that basic communication.
He and the direct response team developed dozens of different email messages that would be sent out in addition to the regular newsletter. It was enormously complicated to set up at first, but with the wonders of automation, it would be easy to maintain in the long run. Here is how the system worked:
As many other high tech marketers have discovered, Richards noticed that leads to some extent self-sorted by the type of offer they responded to. People responding to a white paper offer were at the start of a sales cycle; those responding to a Webinar offer were often a bit warmer and readier to buy; and those accepting a trial software download offer were the hottest leads of all.
Therefore, the direct response team decided that instead of setting up one series of automated follow-up emails, they would set up four different series; each one based on what type of offer the lead had responded to.
They put the biggest effort into the automated email series targeting trial downloaders, because those are the leads most worth investing further in. Here is a basic outline of the messages sent over a six month period, starting with the first day a prospect entered the system.
Notes: Day 0 is the day the prospect responds to the offer.
Emails were staggered on Day 0 and during weeks with multiple messages so prospects did not get more than one in their inbox at once.
All emails marked with an asterisk* were interactive, requesting the prospect to interact in some way beyond opening them. Results from these were fed back into the database, and each prospect's "lead warmth indicator" adjusted accordingly. The sales team could begin to see which leads were highly interested and which might just be tire kickers.
Day 0: Thank you from MicroStrategy's CEO
Day 0: Greetings from tech support; including phone number to call for no-cost help during the 30 days of the trial
Day 0: Special welcome messages if you indicated you were an OEM or systems integrator in the download form
Week 0: Shipping and logistics confirmation email. Indicates when a CD ROM has been shipped, or if the prospect requested an online download, note on how it works.
Week 1: "Horizontal Solutions Email." The prospect receives an email with sales points copywritten to their job function as noted in the download form, such as financial or marketing. There were six different versions in all (link to samples below).
Week 1: Reminder to attend a no-cost Webinar on how to install the download. This Webinar is held weekly to help new prospects.*
Week 2: "Vertical Solutions Email." The prospect receives an email with sales points copywritten to match the industry they said they were in on the download form, such as retail or telecom. There were about a dozen in all.
Week 2: "Competitive email." If the prospect answered the question on the download form asking if they were currently using a competitor's product, this email is sent detailing on a point-by-point basis why MicroStrategy's solution is better.
Week 2: "5 Tips of Competitive Intelligence Best Practices" report offer. Rather than sending this useful educational article to prospects, the system sends prospects a no-cost offer to receive the article via return email. Why? To figure out which prospects are really burning for more info.*
Week 2: Special messages to OEMs and systems integrators. OEMs hear about affordability; integrators get a features overview.
Week 3: Technical support information on how MicroStrategy works with databases that prospects are currently running, such as Oracle. This is meant to be as much reassuring marketing copy as it is to provide tech help.
Week 3: Special email just to systems integrators outlining features in a more detailed way than the week before.
Week 4: Special email just to systems integrators proposing a marketing partnership whereby the integrator will pitch
MicroStrategy's solution to clients.*
Week 4: Alert. Your trial evaluation period is over at the end of this week.*
Week 4: "Business benefits email." Outlines the typical return on investment a Microstrategy client can expect
Week 4: Educational programs. Details upcoming MicroStrategy training sessions being held around the Country which clients can attend for a reasonable fee.
Week 4: Survey. Requests feedback on the trial process.*
-- Trial Ends --
Week 6: Consulting services offer*
Week 6: No-cost tech support farewell, and offer to restart service once you buy.
Week 26: "New evaluation edition is now available!" An offer to remaining prospects to do another trial with the updated software. (Note: MicroStrategies updates its software frequently enough that Richards felt safe putting this offer into the automated system at the six-month mark for all prospects no matter when they started.)
The customized automated emails get "at least double the open rates of our traditional email newsletters," notes Richards. And his traditional newsletters are already getting a fairly respectable open rate around 30%, so this doubled rate is exceptionally high.
The Company as a whole is now profitable; and while the direct response department is only one factor in that success, they are proud to be an acknowledged factor. "Our CFO said his biggest pleasure was that marketing is now accountable. We emerged as not the red-headed stepchild, but a key driver to help out sales," says Richards happily.
- Biggest wow: The database proved that email acquisition costs went up almost by 40% when the Company stopped offline advertising, even when the advertising was not truly direct response.
Richards is one of several marketers from a variety of industries including entertainment and financial to share data with MarketingSherpa recently showing that offline and online campaigns often affect each other's ROI.
- As Richards studies which media channel provides good sales leads at the best price, he has been surprised by how variable results are. There is no one right answer you can stick to for longer than a few months. You must constantly measure cost per lead and then tweak your spending accordingly.
- White paper offers generally got the highest response rates, but the least qualified to buy-now respondents. (However, you already knew that.)
- Richards learned he could add more questions to response forms if the offer had a higher perceived value. For a white paper offer, he might only be able to ask for email, permission to email, name, title and company without reducing response.
For a webinar offer (which has a higher perceived value in prospect's minds) he could ask a few more questions without reducing response. For a trial download he could ask two-full pages of questions (now around 18 questions) without reducing response.
Richards left us with one final thought that may rock some marketers' worlds, "The fact that one email campaign gets a higher click than another is just so much noise." What matters is whether that click will ever pay off.Useful links:
#1. Samples of MicroStrategy's email follow-up letter varied by recipient's job function:
#2. Past MarketingSherpa Case Study on another B2B marketer using automated email follow-ups: "How to Use Autoresponder Emails to Turn Sales Leads Into Profitable Accounts"
#3. Harvard Business School article on Experimental Design that inspired Richards in 2001 (note: Harvard charges a $6 fee to view; this is a long link you may need to cut and paste):
#4. MicroStrategy: http://www.microstrategy.com