DM Techniques to Sell Hi-Tech Products

You cannot see it, smell it, taste it or touch it — how in the world are you going to sell it? That is the challenge facing software companies, especially those that sell “behind the scenes” business-to-business software — what is called middleware — that helps companies transform into successful e-businesses.

A company can use a variety of techniques, including direct marketing, to sell its products, just as BTB and business-to-consumer companies do to sell their wares. As with other segments of the hi-tech industry, the software business is extremely competitive, and effective direct marketing campaigns are an essential ingredient in the marketing mix. Below are some issues that hi-tech companies should keep in mind when considering direct marketing options.

Know Your Audience

As a direct marketer of hi-tech products, a critical success factor involves knowing your target audience and the type of messages and delivery tools that work best with that audience. One particular segment may respond well to e-mail, another to print and others to a Web interface, where they can have direct access to information. Understanding what resonates with prospective customers will enable companies to generate more and better quality leads.

Also, reach prospects when they are listening. For marketers, contacting a target audience at a time it is willing to listen is as important as the message you are trying to deliver. Attaining maximum saturation in a target audience may involve having a presence in its professional or vertical trade publications, banner advertisements in a Web environment, direct mail, e-mail, radio and/or television advertising, or some combination of all of these. The bottom line is that the success of your direct marketing activities is directly dependent on how well you understand how your target audiences like to receive information.

In addition to providing information to customers when they want it and in a format they prefer, it is important to provide them with the proper type of information. There are two ways a company can do this. First, when they respond to outbound direct marketing, you can request information that enables you to be more specific when conducting follow-up. The initial information they provide will enable you to highlight the type of offering that you think would be of most interest. This is done based on a set of logic that is designed into the campaign, enabling automated electronic response to customers who have shown interest in your initial offering.

Another way to personalize information is via a customer relationship program targeted to top customers. IBM uses one called the IBM SW Premier Club. Members have provided our company with information about their areas of interest, so when we send them periodic e-mails, the content is customized to each member’s requirements. These e-mails provide links to the Premier Club Web site where members who have profiled themselves can see additional information, but only on topics for which they have indicated an interest.

Impact of the Internet

Though the Internet is but one component available to a company’s marketing team, it does offer unique benefits to both marketers and customers.

Benefits to the marketer include:

• Accelerating the speed to market. Launches take weeks, rather than months.

• Lowering the cost of outreach for both acquisition and customer service.

• Receiving response data instantly.

• Enabling the marketer to optimize the media mix daily, based on how sites are performing.

Benefits to the customer include:

• Allowing them to choose the information they are interested in, rather than receiving the information the marketer thinks they are interested in.

• Accessing anything the marketer offers. Any time.

• Enabling customers to solve more basic problems on their own.

When using direct marketing techniques to market hi-tech products, remember a few basic rules.

First, maintain strict list hygiene and protect customer privacy.

Define your goals before you begin. Have quantifiable goals and ensure everyone up and down the organization has bought into them before you begin.

Segment your audience. Know your database inside and out. Understand what data you currently capture about your customers.

Define value. It varies in every organization. Make sure you understand what behavior you want to drive.

Within your database, get to know your “good” customers, and what separates them from “bad” customers. Append third-party data to obtain a better picture of your customers.

Segment your customers based on value. Strive for distinct, actionable segments.

Set aside the largest portion of your budget to communicate with the highest-value segments. But do not discard low-value customers. Focus a small portion of your budget on moving them up the ladder.

Develop breakthrough communications. Spend as much time, attention and love on your direct marketing communications as you would on designing your logo or creating a full page spread for The Wall Street Journal.

Understand the different direct media and think through how your brand should translate into these media. Ensure that every communication has a strong call to action.

Always evaluate creative materials from a customer’s perspective.

Test breakthrough communications to your different segments. Also test offers, messaging, timing, creative concepts, channels (telemarketing vs. mail vs. e-mail), formats (self-mailer vs. letter) and sequence (mail then e-mail or vice versa). Keep your testing simple at first, then increase complexity as you sharpen your focus.

Make sure your tests are valid (statistical significance, only one variable, etc.). Only test things you can eventually execute (e.g., do not test an expensive dimensional mailer if you cannot afford to roll it out).

Develop a detailed contact strategy that illustrates your different tests and clearly shows the data flow.

Measure and refine. Make sure every communication can be measured against your goals.

Before you launch, ensure your database is capable of housing the data you will receive. Gather data quickly and efficiently. Avoid superfluous data.

Strive for continual process improvement – use each piece of learning to become more efficient and profitable. If you find a profitable segment, purchase lists of prospects who might mirror their traits.

Gear your entire infrastructure around results. Infrastructure means people, process and technology.

Become a direct marketing organization, rather than an organization that does direct marketing.

Marketing in an Economic Slowdown

There are different schools of thought about whether companies should expand or contract marketing efforts during an economic slowdown.

Regardless of the philosophy your company adapts, it will doubtless continue to pursue at least some marketing initiatives, and it is important to emphasize ways that your company’s products and services can help customers improve productivity and efficiency. These will be most companies’ priorities, and to the extent you can help them achieve their goals, you will continue to generate sales. In an economic slowdown, the difference between closing and losing a sale may simply be finding ways to help your customers cut costs, improve revenue and improve their overall return on investment.

Not all direct marketing strategies and tactics work for all audiences; different products may require unique approaches. Direct marketing of hi-tech products is an evolutionary process, where strategies and tactics are constantly being refined to better identify and serve customers.

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