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May 11, 2011
Case Study

Direct Mail Marketing: Getting outside the comfort zone leads to 31% increase in sales

SUMMARY: Marketing can be a balancing act. A conservative, traditional and well-established industry may have certain expectations in how it's marketed to, and how the marketer's sales team perceives campaigns. The balancing act comes from not completely breaking the mold, but still managing to stand out.

Read on to find out how an established industrial parts business went a little outside its comfort zone to target a new market for its product with a box mailer direct mail campaign that was a little, well, "outside the box."
by David Kirkpatrick, Reporter

CHALLENGE

When marketing to a well-established, mature and conservative industry, a little creativity can go a long way. Companies, sales teams and especially customers can fall into the trap of, "this is just the way we do business." Clever marketing that makes use of the traditional methods, but provides an unexpected element is capable of standing out in a crowd of otherwise similar messages.

CRP Industries is a 60-year-old, privately held company that represents European manufacturers and brands in the NAFTA (United States, Canada and Mexico) marketplace. Its two areas of business are general industrial products and industrial products for the automotive industry.

Looking at one specific product category -- industrial hoses -- the company realized its customer mix was heavily oriented to one market area for the product, paint spray. It was very successful in this market, but the team knew there was more opportunity for its industrial hose product.

"For the past three years we have been pushing hard to diversify that customer mix," said Michael Palm, Vice President of Sales and Marketing." He added that CRP was looking to find new customers for industrial hoses for, "long-term revenue gain and growth for us, and a more stable portfolio of customers."

Learn how CRP was able to successfully enter a new industrial hose market by executing a traditional direct mail campaign with a bit of a twist.

CAMPAIGN

Because CRP's selling cycle is typically very long -- anywhere from three to 24 months -- the overall goal of the campaign was not to close sales, but to create awareness of CRP in the new market, create a lead pipeline and promote CRP's three-part value proposition:

o Provide a high-quality product
o Provide a high level of service for that product
o Be a trustworthy business partner

After 60 years serving industrial markets, CRP had developed a strong reputation. The marketing campaign needed to stand out without being too radical in order to allow CRP to gain traction in a new market.

Step #1. Identify the new target market

CRP was well-established in the paint spray market for its industrial hoses. It sold to large paint chain distribution partners that in turn sold to painting contractors. After serving that market for 25 years, Palm decided CRP needed to penetrate a new customer group and determined the industrial hose distribution customer segment was the target audience.

Where paint spray offered one basic application for the hoses, the new market offered many applications, including:

o Fluid transfer operations
o General hydraulics
o Pharmaceutical applications

The company had pursued this market for a number of years without expending much effort aside from being a member of an industry trade association, and without seeing much success.

CRP wasn't able to get the industrial hose distribution segment to engage with the company, partially because the product it was offering was specialized and even though there were many applications, prospective customers required education on the different solutions CRP's products offered.

Another challenge was these customers were typically owner-operators. They were very busy individuals who were often running family-owned business and doing sales, purchasing, inventory control, accounting and more.

Palm explained, "How do you get their time? Are you going to visit them, or are you going to mail them something, or try to email them something to get their time and attention. That was basically our challenge. Getting them to raise their hand and say, 'Hey, I want to know more about you guys.'"

Once the new market was targeted, the next stage was to educate that market that there are application and industries those companies might not be looking at, but are places where CRP's products can produce a new revenue stream for the customer.

Step #2. Get outside your comfort zone

To reach this new market, CRP took two steps:

- Cleaned its database to target a highly qualified profile

- Identified a target audience of 250 distributors of industrial hoses

Because the typical target was a very busy owner-operator in an established, traditional business sector, a direct mail campaign was the chosen delivery method for CRP's message.

CRP uses a number of marketing methods from hand-delivered marketing collateral to email, but direct mail is a staple of its efforts. Direct mail takes a number of different forms:

o A traditional letter with an offer, or call-to-action, with a fax-back form or a time-sensitive price offer

o A letter with a spec sheet

o Branching out, the company added four-color postcards to the mix

The postcards were a departure from the typical direct mail effort, and took some getting used to within the traditionalist company, and with the sales team.

The direct mail campaign to reach out to the industrial hose distributor market took the company even further out of its comfort zone.

This campaign involved three mailings of a box with different contents, and added a humor element to catch the attention of the recipient. A conventional mailer with a twist.

Step #3. Grab your audience's attention in an unconventional way

The three-part mailers took the audience through a sequence designed to stand out from the crowd of marketing collateral, and still convey CRP's core message of educating the prospective customer and conveying its value prop.

- Mailing #1 was an essentially empty box with a product catalog in the form of a mini-brochure. The message headlining the brochure was, "If you had ordered a hose from us yesterday, it would have been inside this box."

- Mailing #2 was a box with three "sorry" cards included along with a mini-brochure. The message headlining the brochure was, "A few words about CRP hoses. Sorry isn't one of them." The "sorry" cards were included for prospects to give their customers if they sold them a non-CRP hose.

- Mailing #3 included a full disguise kit with glasses, a funny nose and mustache and a mini-brochure.

The message headlining the brochure in this mailing was, "A few facts that can help you save face the next time you sell a hose." The idea behind the disguise kit was for prospects to be able to save face for not selling their customers CRP hoses.

The concept behind adding the humor element to the mailing was to grab the attention of busy recipients and maybe "stop them in their tracks," as Palm put it, and allow them to absorb the message.

At a trade show after this campaign, CRP's sales director for industrial products ran into the president of a buying group that represents the hose industry and was told, "I wanted to tell you, you guys have some of the more innovative, creative marketing campaigns that I have seen in a long time." And then the buying group president specifically mentioned, "Like that campaign where you sent me the glasses. I remember that."

On grabbing the attention of the target audience, Palm stated, "I felt that the recipient was having a very unique experience and one that was memorable, and that would allow us to (get) further along our sales development goal."

Step #4. Make good use of the valuable attention you’ve won

Grabbing the attention of a busy audience is great, but if all they take away from the campaign is an empty box and funny glasses the effort is wasted. CRP made sure to convey the core message in the campaign with the mini-brochure collateral included with each mailing.

In this case the headline of the brochures included with the mailings tied into the humor element of the campaign, while the body of the collateral covered CRP's value prop -- the quality of its products, its quick turnaround time, the technical support the company offers its customers.

The collateral also included sell sheets and several mini-cards that covered specific applications of CRP's hoses, how to sell the hoses and how to uncover the applications, such as asking the prospect if they've thought of sewer jetting hose as an opportunity, or food transfer applications for the hoses.

After the direct mail campaign, CRP leveraged these mini-cards as a leave-behind for its sales staff after customer visits. Palm said the cards provide a valued-added service for customers to help them understand different revenue streams for the products within the customer's marketplace.

Step #5. Continue the touches

About two months after the direct mail campaign ran, CRP implemented a follow-up campaign as a continuation of the effort. The follow-up consisted of post cards rather than boxes, and was part of a larger effort to maximize the effect of the first direct mail campaign.

Palm stated, "I am a big believer in multiple touches with the customer. I just believe that you've got to get your message in front of them on a repeated basis, and I also believe in it being integrated marketing in that we implemented direct mail here, but we also had a website we created with pages that supported (the direct mail campaign) and we utilized the message in our sales presentations."

The direct mail message came up in sales presentations with the sales team visiting prospects and mentioning the mailings for further discussion.


RESULTS


Palm stated, "People actually reacted to the call-to-action that we had in the piece. We started with a highly defined target list, and we were very happy with the response rate." When recipients were prompted if they remembered receiving the mailing, the recall rate was more than 50 percent.

Palm was pleased with this figure because the overall goal of the campaign was to raise awareness in CRP within the industrial hose distributor market segment.

Other metrics include:

o 15 percent response rate on the call-to-action

o The campaign generated sales quotes, and within months of the end of the effort CRP closed three new customers. CRP's typical sales cycle ranges from three to six months all the way up to 12 to 24 months. The new customers from the campaign initiated opening orders within a three-month window, dramatically cutting CRP's sales cycle.

o CRP saw an increase of 31 percent in 2010 sales over 2009 in the targeted market segment. Palm said he can't attribute all that growth to the campaign, but added the effort "had a significant impact" on driving that growth.

Useful links related to this article

CREATIVE SAMPLES:

1. The three boxes

2a. Box one brochure #1
2b. Box one brochure #2

3a. Box two brochure #1
3b. Box two brochure #2

4a. Box three brochure #1
4b. Box three brochure #2

5a. Example of mini-card insert #1
5b. Example of mini-card insert #2

CRP Industries

Mint Advertising -- agency for the direct mail campaign

Members Library -- Direct Mail and SMS Combo Lifts Rewards Program Membership 5%: 5 Steps

Members Library -- Marketing Research Chart: Direct mail rated as an effective tactic by many B2B organizations

Pennies in Direct Mail

38% Decline in Direct Mail Predicted


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