Cover Story: HP's Email at Work
"Based on the cost of our email program, we're probably saving four times what we spend," says Daryl Nielson about one loop of HP's serpentine email strategy: Support Alerts. And, "revenue-wise ... we actually generate close to 20 times our costs."
Nielson is the worldwide email marketing manager of HP. With 1 billion customers across 170 countries, HP's $127 billion in revenue makes it the largest IT company in the world and the 28th largest company overall according to the Fortune Global 500 List of the world's largest corporations. The email files for Nielson's programs include millions of recipients each.
You will not find a corporate environment where it would be easier to rely on untargeted mass mailing and spam. Yet, the Support Alerts drives its impressive response precisely because the program leverages everything Nielson and company know about the specific customers receiving them, and the flagship HP Technology at Work e-newsletter has won multiple awards for its use of personalization.
A focus on recipient data and preferences allows HP to surround its subscribers—be they customers, prospects or just the curious—with messaging they're happy to open and buy from. It's a tactic that runs across all of HP's email programs. Support Alerts, e-newsletters and promotional emails use information provided by the subscribers, drawn from order histories and even inferred through Web analytics to figure out what the recipient wants. HP then provides exactly that in its content and, especially, in its marketing.
The Voice of
a Million Customers
"The main differentiator with HP email programs is the fact the HP is constantly improving its programs to deliver the most relevant information to its end-customers in the most convenient and accessible fashion for the recipient," says Bradley Dornick, account director of Chicago-based Pepper North America, the U.S. arm of an international integrated marketing and communications agency that has worked with HP for more than a decade and supported its B-to-B email programs since 2004.
Dornick says Nielson's programs stand out because of their "continuous testing, analysis and on-going improvements in design, content and user experience. Their flagship communication, the HP Technology at Work e-newsletter, is a two-time Marketing Sherpa award-winning email program which provides highly relevant, personalized content."
As you've already seen, there's more than one email in HP's fleet. But elements of personalization and customer intelligence are leveraged in just about all of them.
"We have emails that are associated with more awareness and relationship building, where we have newsletters and the Support Alerts … and we have the demand generation emails," explains Nielson. "Then we also have sales email types, where it's more one-to-one. The sales reps get to send out direct communications to their contacts [for which] marketing will create information or collateral or offers that then can be directly sent from the sales rep to their accounts."
HP encourages customers to use its preference center to set their own choices for delivery frequency and topics of interest. But it also uses Web visitor analytics to help tailor what it sends. "Sridhar Shankar [HP's digital marketing analyst] is our analytics person, and he's done some great things with Web analytics to be able to have follow-up information on customers … where we target customers based on their Web activity with follow up offers, like abandoned shopping cart emails, or offers if they're visiting certain Web pages."
There's more to it than just the Support Alerts and Technology at Work, but those are good places to start.
Customer Self Service
"We started [emailing Support Alerts] probably seven years ago to notify customers that there is new support for their HP products," explains Jared Hansen, program manager for HP Support Alerts. "It's a very light email. We include the link to HP.com to get the support content with a small description of the support."
Recipients register for these Support Alerts—they opt-in and profile their HP products in a preference center—to have product news and updates for their specific products pushed to them. For many users, especially IT managers responsible for keeping many devices running and up-to-date, Nielson says the service is a lifesaver.
"The kind of content we're sending out is really across all HP products," explains Hansen. "So really, everybody should have this one profile that they just maintain, and through this program we send any support that they're going to get for their HP products. They would receive customer advisories, driver downloads, bulletins, bios, product change notifications and so forth."
Support Alerts is highly customized to each recipient, allowing them to set the frequency of products to be supported. "They tell us how often they want to receive it," says Hansen. "If they want it on a monthly basis, we'll just aggregate everything for their set of products and send it at once. We'll also do it weekly, or as quickly as available—there are some IT managers tracking 50 products for their companies, and they want it immediately to act on it—and we'll tell them which [alerts] are critical, and which are routine notifications."
The primary goal of the program is to save costs on support. "If we can help customers find the answers themselves and stay ahead of any issues they might encounter," says Hansen, "total customer experience is going to be better and their satisfaction's going to be better. We're going to avoid calls to our call centers, which is going to save us some money."
Support Alerts has become HP's highest performing email program, with open rates around 20 percent. "Because we know what products they have and this communication is so relevant," says Hansen, "it performs better than any of our other communications." Recipients see Support Alerts as a value-added service. "It's a high customer satisfaction program," says Nielson. "They like to see that in their inboxes—particularly IT managers."
Beyond the customer service benefits, Support Alerts also creates revenue through small ads Nielson's team calls "Chiclets." These are targeted to the recipients' particular HP products and run unobtrusively in the lower left column of the Support Alerts emails.
"We will get different promotions submitted by the different business units on the backend—printers, software, PC, etc.," explains Hansen. They'll run up to six in each recipient's email. But the specific number and promotions are determined by an algorithm based on the customer's preferences and engagement with recent emails or HP's website. "We handle all that targeting in the logic of the email engine, and as such they are highly targeted to the recipients' specific needs and wants."
A less obvious benefit of Support Alerts is that it allows HP to fill in a known blind spot in its customer data: connecting with customers who bought through partner channels and thus never came into HP's database.
"It's amazing how it works," says Nielson. "We sell a large percentage of our hardware products through the channel [retail, partner channels, non-direct sales, etc.] and we don't really know those customers. So, with this service, they come and tell us who they are, what products they own, and then we have to deliver what it is."
It all adds up to a program that increases customer satisfaction and support, which leads to better opt-in customer data for HP and more sales.
Technology at Work Fills in the Blanks
Where HP Support Alerts are strictly business, the HP Technology at Work e-newsletter is Nielson's primary relationship-nurturing tool.
The monthly e-newsletter is aimed at HP customers and has two main versions, one for small and medium businesses, and the other for enterprise customers. Between the two, Technology at Work goes out to several million subscribers. Nielson says those subscribers get a mix of about 60 percent articles (short teasers that click through to the full article on HP's site), 20 percent HP promotions, 10 percent webinars and another 10 percent "super shorts" (tips and knowledge pieces, buzz words, surveys, etc.).
"We want to have the content, more the relational awareness, be the main factor" of the HP Technology at Work e-newsletter, says Nielson. "We don't want to be too promotionally heavy there. ... The articles are featured at the top, and the promotion and the webinars are down toward the bottom."
As Dornick mentioned earlier, HP uses what it knows about its subscribers to personalize and "target the information to their interests," says Nielson. "If they're interested in PCs or printers or servers, [we're] trying to get content that's relevant" in the e-newsletter to them.
Where possible, HP personalizes the emails based on product and interest information subscribers provided through the preference center. However, HP only collects so much information in the registration forms: usually just name, email address and opt-in, says Nielson. This keeps conversion rates on the registration forms high—about 37 percent according to Shankar, compared with 10 percent for older forms that asked many questions. But it also means HP passes up on a lot of self-profiled information from those subscribers.
"Our perspective is that we ask as few questions as possible, and then try and use other means to learn more," says Nielson, "because every time you ask an additional question, your conversion rate's going to go down."
HP tries to fill in those blanks using other tools after the sign-up. According to Nielson, "if we can identify they're coming from a company, using Web analytics to identify their company—no personal information or anything—and just what they're relative company size would be, that helps us be more relevant."
It's a judgment of value between initial depth of profile and conversion rate. "What we feel is, you try and get [customers] to opt in, and then you use their experiences—those that are engaged and use your website or read your emails—to target your information based on that behavior," explains Nielson. "If customers are browsing certain Web pages and so forth, then we'll make [that content and] those promotions more prominent for those customers that have been active on those Web pages and have been clicking on those product categories."
This means recipients get four to eight articles a month in their Technology at Work e-newsletters, depending on what's available for the areas they've shown such interest in. And they can change the factors determining that through HP's email preference center.
The emails discussed so far have been designed to increase customer engagement, service and loyalty, while delivering a small amount of promotion. However, HP also uses several kinds of email to overtly direct market to customers and prospects. One such program, an opt-in promotional e-newsletter aimed at small businesses, is headed up by Krisha Andrew, HP's promotional email program manager.
"Krisha [Andrew's] newsletter," explains Nielson, "is really focused on promotions. Just putting the promotion out there and seeing if customers are interested in it, but then doing follow-up targeting if they click on offers."
A few years ago, the promotional small and medium business (SMB) e-newsletter was blasting out five emails a month, and that ran into trouble. "We were basically trying to keep up with the cadence that a competitor was sending out," says Andrew. "So we were sending out five times per month to the full subscriber base. And you know, that was initially OK. But then we found that there was a softening with our metrics … [for example] our clickthrough rates were declining."
In late 2010, this led to a total overhaul of the program. "From a look and feel standpoint, we basically committed to changing up the template, changing up the look and feel, making sure that we weren't pigeon-holing products into certain areas of the template," says Andrew. Instead of letting sales dictate what promotions ran and when, the email marketing team took on "making sure that where it made sense, to add a cross-sell or an accessory … [and] we started to remove a lot of the verbiage."
Around that time, Nielson's team also began applying the same sort of targeting previously mentioned from HP's other email programs to this e-newsletter. Instead of sending five times a month, all subscribers would get a baseline of three emails each month, "because at the end of the day, we have offers and products that we need to get out there and sell," explains Andrew.
Those three emails each contain all three SMB product groups Andrew works with—servers and storage, imaging and printing, and commercial notebooks and desktops. "When we send out those three [emails], we look to see within the three different product groups … who clicked on which offers," she says. "We'll combine that with the intelligence we get from [Shankar] in the way customers may have come to HP.com who all subscribe to the promotional newsletter, and have been sitting on what types of product pages and looking at which product pages. And so we use that information to then send the other three newsletters each month."
The other three newsletters are specifically geared to servers and storage, imaging and printing, or commercial notebooks and desktops. And any subscriber who clicked on that content in one of the earlier three e-newsletters, or visited those pages on HP.com, will get the corresponding product group email. "Those sends are much smaller," says Andrew, but "they're relevant then, because they're based on those customers' behavior."
What HP has done with this program is "move from a scenario where we were sending out blasts after blast and hoping for the best results," explains Andrew, "to sending out an email, watching to see how our customers respond to that, and using that information to then send them more relevant offers moving forward. And that's been really good for the program."
Those changes have increased clickthrough rates 20 percent, according to Andrew. Direct Web traffic is up 60 percent, and in the first nine months of the 2010 fiscal year, the program had already achieved 97 percent of the previous year's full 12-month sales. HP's cost-per-click on that program has dropped 29 percent.
Now Andrew's e-newsletter has begun offering "options to download a data sheet tied to a particular offer or product." The content in those downloads is essentially support information and content repurposed from the other e-newsletters. "When they're [downloading] that, we're taking that as an interest in the product, and then we're retargeting them for additional related offers in future emails. Kind of continuing the conversation, so to speak."
Email as Conversation
Across the board, HP has shown a remarkable ability to continue any conversation in email. After years of working on the program, Dornick still marvels at the factors of its success.
"HP has the ability to provide personalized content across its email programs via editorial content, promotional offers, Support Alerts, product-lifecycle messaging, etc., ensuring it consistently delivers high value communications and maintains a very high-level of customer satisfaction and positive marketing ROI," says Dornick. Their "key ingredients for success are: relevant, individual content for all customers globally and across HP's business units; efficient communication delivery processes; a 360-degree approach to testing, analysis and learning; along with accurate performance measurement to show the monetary and non-monetary impact of its email programs."
For a company that does that, email really is technology that works.