The Many Paths of Direct Marketing
A look at multichannel marketing strategies with results
March 2006
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Speaking in Broad Terms
Ensuring that all channels—online and offline—support each other is one of the ways HP Home & Home Office Store, the direct-to-
consumer e-commerce business of technology solutions provider HP, drives sales and ROI, two of its most important metrics. These dual objectives were the main motivators behind HP Home & Home Office Store’s back-to-school initiative, which tied search engine optimization (SEO) to e-mail and offline direct marketing efforts. The campaign, which ran during July and August of 2005, combined aggressive bidding on broad category keywords with relevant, timely, event-oriented ad copy throughout HP’s catalog, inserts and e-mail, as well as print and TV advertising.
Typically, brand- and product-specific terms, such as “HP Pavilion” or “Compaq Presario,” convert better than broader terms such as “laptop,” “notebook,” “computer” and “printer,” which also cost more and convert at a lower rate. However, optimizing paid search on these broader terms during the back-to-school program allowed HP to reach consumers much earlier in the purchase process. “We already had been using the broader category terms, but … if we were going to try to drive growth of search, we really needed to increase our presence on these terms,” explains Catherine Paschkewitz, manager of consumer marketing for HP Home & Home Office Store.
To attain the kind of ROI the company sought, the search component was optimized to take into account the messaging of HP’s advertising campaign, including the products and promotions that were featured as part of that initiative. “All of those [elements] were linked together from a back-to-school perspective, in terms of key products, key promos, key messages,” describes Paschkewitz. “We had a number of catalog drops during the back-to-school season, and likewise with e-mail, so it was very much tied into the key hot products that we thought were essential to focus on during that time period,” she adds. “The hottest promos were then featured in the advertising campaign. The advertising in the July time period was particularly focused on the desktops and notebooks. There was also a significant campaign that HP ran during the August time frame focusing on printers.”
HP worked with its online marketing services provider Performics, the performance-based marketing division of digital marketing services provider DoubleClick, to optimize its search campaign. An average search result position of two or higher was maintained for a short list of broad keywords on priority search engines. A broad search term such as “laptop” on Google would bring up the title, “HP Back-to-School Laptops,” followed by the copy, “Free Shipping on HP Notebook PCs. Shop Back-to-School at HPshopping!” On Yahoo!, the same term (“laptop”) would bring up the title, “HP Notebook PCs - HPshopping.com,” followed by the description, “Back-to-school deals at HPshopping.com. Free shipping at the official Hewlett-Packard store. Save on HP Pavilion and Compaq Presario desktop PCs and more.” Terms such as “free shipping” and “free financing” also were heavily featured in the search program and throughout the catalog messaging during the initiative.
To measure the program’s success, two goals had been put in place: to grow click volume while minimizing decline in conversion rates, and to increase total transactions by at least 30 percent. The results of the campaign exceeded these metrics, with a 45 percent boost in click volume over the previous year, and an increase of 13 percent in conversion rates. Total transactions for the period increased by 64 percent, more than twice the target, according to Performics.
For HP, the success of the program has led to more testing and subsequently incorporating a more holistic approach to its direct marketing programs. “In terms of having the greatest impact possible from a sales and ROI perspective, the more we integrate, the better,” says Paschkewitz. “Every time we try to coordinate these things, we definitely see a benefit for search specifically, because search is increasingly part of people’s shopping behavior. So you really have to think any time you launch these campaigns, ‘What am I doing on my search campaign, and is this taking my other activities into account?’
A Sales Force Goes Multichannel
Creating more powerful, involving direct communications between its field sales force and its customers has led Option One Mortgage Corp. to deploy techniques that link its e-mail marketing, Web and multimedia content. A division of H&R Block, the Irvine, Calif.-based wholesale mortgage lender serves loan officers and brokers nationwide. Each of those customers potentially is worth up to hundreds of millions of dollars in revenue value, depending on the size of its business. Working with direct marketing agency The Hacker Group, Option One deployed a solution that empowers its decentralized sales force to
create a variety of direct marketing materials, including e-mail campaigns and collateral, that’s targeted and customized for each individual customer—all directly from the field.
Deployed as a pilot in July 2005, the company began rolling out the solution at the end of September 2005. A library of topic-specific and generic e-mail message templates and flash content was created—four templates initially—to address the different points in the customer life cycle, from prospect through lapsed. Company account executives use the tool to create timely and relevant e-mail communications that include attachments and default links to Web sites that reinforce the template message or allow the recipient to take the next step toward the desired outcome. “These attachments can include customized marketing collateral pieces created through a print-on-demand tool we also make available to the account executives and their regional sales assistants,” describes Dale Jelinek, vice president of marketing services at Option One. The customized HTML messages can be sent out
to individual recipients or to distribution lists from a desktop computer, laptop or handheld device such as a BlackBerry or Treo, and can be received via any of these devices, as well. “The recipient—even those included in a distribution list—receives what appears to be a one-to-one message sent solely to them,” says Jelinek.
The messages are sent using polite delivery, which means the actual
e-mail sent out is relatively small, but it holds links to the additional content, driving recipients to Web pages, streaming video or flash—anything from videos that present features and benefits of new products to voice messages from account executives, slide presentations, and product-specific flyers. Meanwhile, the tool allows Option One to track how recipients interact with the message, including if the message was opened, whether the links were clicked, as well as if the message was forwarded to, and opened by, other recipients. Jelinek describes one example of how the
system works: “One of our field account executives … decided to use it for her first application to address a particularly challenging opportunity, which was to help convert the brokers in her territory to sign up for, and begin using, what we call our automated, online pre-qualification system,” he says. “On a Monday evening she sat down and created a distribution list of 35 active brokers, and sent out [a] pre-formatted template addressing this topic.” The message included embedded links to portions of Option One’s Web site where the brokers could learn about, and sign up for, the pre-qualification system. “When she got up the next morning, she was able to see that all of her brokers had received it, opened it, and of the 35 recipients … seven had already clicked through the link and signed up,” Jelinek adds.
Sending e-mail messages that go far beyond the standard text format most sales forces use and that direct customers to relevant and timely information on the Web has proven effective, thus far. “The distinctive look, feel and rich content of these messages provides higher open and pass-along rates for the account executives than achieved via normal e-mail,” says Jelinek. “We have received testimonials reporting immediate results converting prospects into customers.” The goal going forward is to ensure that the system is adopted throughout the busy sales force and to continue to expand Option One’s document and messaging versatility to better serve clients. yy
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