Takes Giant Step in Improved Customer Targeting, a company that offers e-business services to small businesses, is finding that a business intelligence, database warehousing and e-mail marketing program it instituted last year is saving the company time, increasing productivity and improving its business performance.

The system has allowed, San Francisco, to target segments of its member base more precisely and send them direct e-mail campaigns with the right message at the right time in their life cycle with Bigstep.

For example, Bigstep averages a 1 percent to 2 percent click-through rate for e-mail campaigns that go to its entire member base. But the company has seen rates as high as 8 percent to 10 percent on campaigns where it targets members more likely to respond to the message.

In 1999, the company, which has 10,000 subscribers, evaluated its reporting environment and realized that it needed to update its data-gathering processes to get a better handle on its customers. Bigstep realized it needed to conduct better target marketing.

“We did customer e-mail marketing campaigns since we started on July 4, 1999, but they were not at all targeted,” said Josh Jacobs, vice president of sales and marketing. “We basically had a monthly newsletter that went out to all of our members and a monthly letter from our CEO that went out to all of our members. However, we did absolutely nothing with these letters except send them.”

For example, Jacobs said, “We didn't track things like open rate. We didn't even use HTML in the early days. … We were really just using them as a way to build a community of trust with our members, not as a marketing tool.”

As a result, the company later that year began building a customer data warehouse and searching for a data reporting solution that would enable its marketing and customer service departments to monitor customers' Web-browsing patterns, thereby placing Bigstep in a better position to adjust marketing campaigns to the changing attitudes of its customer base.

After reviewing seven companies, Bigstep chose the Business Objects reporting solution. Then in August 2000, a few months after Bigstep launched its data warehouse and began working with Business Objects, it signed with Responsys, Palo Alto, CA, as its e-mail marketing partner.

Bigstep now can do things like find out what types of products particular customers buy, then send targeted messages to them.

One successful campaign was Bigstep's promotion of its Search Engine Manager service, which, lets small businesses list their Web sites on more than 400 search engines.

Using Business Objects “we looked at the buying patterns on when people buy Search Engine Manager,” Jacobs said. “And what we found is that on average, [customers] take a couple of months before they are really happy with their site and are ready to spend extra money to market it. … It tends to be a purchase that the vast majority of customers make in the third month of membership.”

Bigstep generated a targeted list of members that had been with the company for at least three months, that logged onto the service at least once every two months, have published Web sites and have used some of the traffic-generating tasks within the service. It sets up an automated promotion that goes to those customers.

Bigstep said it sent the same message to the targeted group and a random sample of its members and saw sales-conversion results 33 percent higher than the random group.

In general, the new system lets Bigstep “have an integrated marketing framework that is entirely data-driven, that is very flexible and easy to continue to expand as we launch new products, learn more about a particular segment or group and then use this information to influence behavior,” Jacobs said.

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