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May 22, 2001
Case Study

PaperExchange Gets Non-Tech Savvy Execs to Return to Its Online B-to-B Marketplace Frequently

SUMMARY: Summer 2000 saw a boom in B-to-B marketplaces, or as some people called them, B-to-B exchanges. These Web sites were launched for almost every industry you can imagine - from coffee distributors to retail overstock liquidators. They hoped procurement professionals would visit in droves to do business online.

But business buyers proved resistant. No one doubted that an enormous amount of business would end up being conducted online someday. However, it takes time, a certain comfort factor, and a lot of persuasive marketing to bring buyers online. Many B-to-B marketplaces faltered and crashed before they could persuade enough of them....

Executives in the paper and pulp industry are not what you would call "early adopters" of new technology. In fact, Rowland Hobbs of PR firm RFBinder says, "These people are not checking their emails daily. You're talking about an old school industry."

Hobbs would know because he spent this past winter helping PaperExchange (PEx), the B-to-B marketplace for the paper and pulp industry. The site had a membership base of 6,000; but many members had visited once or twice, signed on and never come back. PEx needed to find a cost-effective way to get these 6,000 members to actively use the site to conduct business.


Hobbs hoped that email, if used properly, could be both cost-effective and successful. PEx had not been sending any email to members on a regular basis. So, Hobbs took precautions to avoid annoying members with what they might consider spam.

First of all, he had an expert review PEx's privacy policy to make sure it met regulatory standards in the US, Canada and Europe. Hobbs says, "We have a privacy manager on our staff who looks into this, and then we also encourage our clients' lawyers to look over policies as well."

Next, in order to get PEx's members used to receiving emailed communication Hobbs started them off slowly with a general introductory letter from PEx's CEO. He says, "It was purely an announcement piece, not a direct marketing piece. There was no call to action." Naturally it included an opt-out (how to unsubscribe) section. The politely worded note was fairly short and sent in text-only.

Then after carefully waiting 30 days, PEx sent a second note. This one featured a free offer for an emailed summarized version of the AMEC newsletter. AMEC is $1200 brand-name publication this marketplace was very familiar with. By offering the free version, PEx was taking advantage of the strength of the older brand name, along with offering members something of high perceived value that would give PEx an excuse to enter their email boxes on a regular basis.

Thirty days later PEx sent a third emailed membership note. This one offered "Fast Track Sales Emails." Members were told they could set their preferences at the site, and get automatic emails whenever products came up for sale that matched their requirements.

Lots of companies, whose marketers are scrupulous about not spamming, still get in trouble for it when their sales department innocently sends out unsolicited emails. So Hobbs set up "process tip sheets" to educate PEx's sales team about how to use email for communicating with members and prospects properly. Every time a sales person wants to send an email to more than one person (i.e. something that's not a true one-to-one communication) they first have to get the list and copy approved by both their sales head and the marketing team. Although this seems unwieldy, it's set up as a regular business process so it takes less than 10 hours on average.


PEx's email communications programs have proven very popular with members. The site gets an average 15% click through rate on the notes it sends every 30 days. Every two weeks, an average of 100 more industry executives sign up for the AMEC newsletter offer as they hear about it virally through copies colleagues forward to them.

Proving that adjusting an offer to a businessperson's explicit desires really does work, the Fast Track Sales Emails have proven most effective, with an average 25-35% click through rate!

In addition, PEx's site has seen a substantial increase in returning member traffic, which in turn increases members' comfort level with the idea of doing business online. As Hobbs points out, this comfort factor is critical to encourage sales "of large magnitude."

VENDOR NOTES: PEx uses FloNetwork to manage its email campaigns and email marketing database.

NOTE: Interested in learning more about successful B-to-B online exchange marketing? Here are four past B-to-B MarketingBiz articles you may find helpful:

1. VerticalNet Marketers Reveal Market Research, Integrated Marketing and Storefront Success Tips

2. How Verida Uses Telemarketing to Hand-Hold Farmers Online

3. Gets 200 Business Clients Around the World to Open Accounts in Less than 60 Days

4. Has Tested Almost Every Online Marketing Tactic -- Here's What Worked
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