CHALLENGE

Michael Lodato, Executive VP & Chief Marketing Officer for QAD Inc (Nasdaq: QADI), likes to tell the "72% horror story."

Here's how it goes - two years ago when Lodato joined QAD, he was dismayed that the existing database only had complete contact info for about 40% of QAD's customers and active prospects. But, he figured, it's better to have something than nothing at all.

So, he hired a telemarketing firm to run a quick data accuracy campaign, contacting names in the database to make sure they were still in their stated jobs, etc.

A week later the telemarketing firm turned in their results, "You have 72% data accuracy," they said. "Great!" said Lodato. "No, we mean that in a bad way. We couldn't confirm that 72% of the records in your database are still in that role in their company, or even if they are real people."

Lodato realized this must be one of the key factors behind the fact that the company had had declining profits and revenues for the previous four years. Building a useful, accurate customer and prospect database became his team's top priority.

However, it wouldn’t be easy. QAD had a large field sales force across four continents who weren't used to sharing contact data with marketing.

CAMPAIGN

First Lodato made the strategic decision that, despite the fact that QAD has regional marketing departments around the globe, all data would be housed in one central database.

Centralization was the key to success. "I can't stop every rep from keeping notes in their Palm Pilots, but bringing together the individual spreadsheets from marketing departments had to happen."

After choosing a new contact and marketing management platform that could handle both US and international addresses(see link below), Lodato began a three-step process to use it effectively.

-> Step #1. Prying contact info out of sales reps

Most marketers will agree, prying information about customers and prospects out of sales reps is a miserable process that's often doomed to failure.

"If you get enough beers into a rep on a Saturday night, he'll tell you exactly why he's not putting data in the database," says Lodato. His insights:

a. Build trust:

Sales reps often don't like or trust "those idiots at corporate." If they hand over their hard-won customer and prospect info, what's to stop you from firing them and hiring a cheaper guy? What if the marketing department abuses contacts, deluging them with too frequent campaigns? What if the rep is just about to close a deal he's worked on for months, and marketing confuses the decision-maker with a promotion for a different offering?

In addition to establishing warm diplomatic relations with sales, Lodato made an iron-clad promise that each rep would have a degree of control over their contacts. A rep could go into the database and flag a name "Do not promote" or "Only promote these items."

b. Make data entry super-easy:

"Sales reps have the highest percentage of attention deficit disorder of any career. It can make people incredibly productive in the right environment, but you have to work with them in small chunks. If you make a rep go through a 20-page survey of all the data about an account, they will learn to hate you, and they'll either start making it up or just not do it."

Lodato ruled that QAD's reps would only have to answer five basic questions about each contact they entered, including which vertical industry was the contact in? Is the contact at a decision-making location? What type of decision-influencer is the individual contact?

Plus the form reps had to fill out was simplified to require as few keystrokes as possible. Most reps had 20-100 accounts, so anything to make entry-time quicker really mattered.

For example, Lodato's team changed the client-meeting date field from eight keystrokes (mo/day/year) to three of radio buttons.

Once basic information is gathered for each contact name, you can ask the rep to add in more data a bit at a time each time he or she touches the database. Filling out a profile is "easier in bite-size chunks."

c. Back up your request with a "stick":

You're sunk from the get-go if the sales department is pretty sure the CEO will back them up instead of marketing in case of intramural disputes.

"It all falls back to your CEO. If your CEO says, 'Hey new rule, next week no paychecks unless you tell us who you're selling to,' it works."

Lodato started by requiring just three profiles per rep in a certain time period. That way no one felt overwhelmed, and the sales team didn't lose too much time to admin in any one month.

-> Step #2. Setting global marketing rules

Although QAD is US-based, they sell applications software to manufacturing companies. Which means that as manufacturing has moved offshore, so has QAD's customer-base. "The US is only 35% of our revenues now," notes Lodato.

Aside from the obvious challenges of making sure his database could handle international addresses, including Asian-language- characters, Lodato also had to set rules of international marketing engagement.

- Let regional marketers keep power

Just as the individual sales reps now had some control over what marketing would send to particular contacts, regional marketers had control in their own markets.

So, while all data was centralized in one place and corporate could request that certain campaigns and branding initiatives went forward, regional marketing departments made final campaign launch decisions and creative tweaks based on their intimate local knowledge.

Having copy translated was especially important. "In some countries, marketing in English speaks to your size. People assume you must not be very big if you don’t have a marketing department big enough to translate locally."

Lodato also learned that US-centric copy wasn't always a good thing. "Ever since the Iraq war we're getting the message that it's not a good idea to speak English in France these days. You have to be globally aware and locally relevant.

"Don't stick with 'I'm a big US corporation and I'm going to teach all these little countries the American Way.'"

Last but not least, he allowed the teams to vary QAD's brand image based on what worked in their area. "The brand you're putting across in America should be very professional, whereas in Japan they may have a smiling child waving a flag in an Microsoft business ad."

-> Step #3. Test, test, test

As they had more active contacts to reach, Lodato's team began testing marketing surveys, varying offers, and email campaigns to see what would work best for each nationality, vertical industry, and job function.

For example prior to sending out a user conference invitation to all the names in the database, the team sent emails with three different subject lines to test cells of 150-individuals in each major market to see what would get a higher open rate.

Then they rolled out to the whole list segmented with the winning subject line for each particular marketplace.



RESULTS

"QAD has posted a consistent profit, and the stock is up over 1000%. In the last 18 months, we've been the best performing stock in the entire applications software marketplace," says Lodato proudly. He notes the new marketing database was "clearly one of the main pillars of our corporate turn-around."

When Lodato started, the company had just over 5,000 contact names databased with 72% inaccuracy, now QAD has well over 7,000 contact names with nearly 100% accuracy. "I've tripled my reachable market," he crows.

The team have also learned through marketing tests that:

- In-person events are far more popular outside the US than they are inside. "In countries with lower job stability, personal networking with members of their own community is more important."

- Professors can be a big draw for events held in Asian countries, whereas in the US professionals may distain academia and flock to events featuring famous peers as speakers.

- There's no one perfect email subject line for all countries. For example, Lodato's team discovered that Asian executives were most likely to open an event invitation with the subject line mentioning Disney World. American execs were more interested in the famous-name speaker.

However some subject lines can bomb across all cultures. When Lodato's team tested a 20% off offer recently the open rate was bad for all marketplaces. Why? "I concluded we just looked like 'another person trying to sell me something' in their inbox."

- Technology that makes marketing easier can be dangerous. Lodato says, "I'm still embarrassed about the stuff we run into. We've had surveys go out where the form wasn't up because the IT department took the system down at 1am on a Sunday because they thought 'Nobody's working.'" Turns out people were working -- in Asia.

"You have to put very tight controls over who can press the big red button that causes email to go out. You can literally train someone in half an hour to blast 100,000 people -- they make one mistake and you never forget it. If something says, 'Test Message' you just equated your brand identity with something that doesn't work."

To help cope with these problems, QAD is now forming a Corporate Touch Council. The Council will help calendar campaigns so that no customer is deluged with things like three surveys in one week.

"This has net impact," says Lodato.

Useful links related to this article:

Aprimo, the technology that QAD uses to create its centralized database and send targeted emails
http://www.aprimo.com

QAD
http://www.qad.com