HP Gets It Right, Part 2

In my last column, I shared with you how Hewlett-Packard set about designing a truly successful email customer relationship program, one that managed to accomplish the seemingly impossible task of generating over $300 million in sales per year, with an almost nonexistent unsubscribe rate and spam complaints hovering just above zero.

Previously, Paul Horstmeier, HP’s North American e-marketing manager, shared in great detail the process by which HP built that “e-relationship engine” to better communicate with a diverse set of customers and add profit to the bottom line. Let’s get into the heart of the story: implementation and results.

Creating the Content

HP recognized the email newsletters it planned to send to customers needed to appeal to two primary audiences: business people, whose main interest is “how-to” content offering tips, answered questions, and so on, and IT people, who are more interested in detailed information on specifications, benefits, features, and the like. Content needed to include links to Web sites and product offerings, as well as personalized material it terms “downtime content.”

Horstmeier’s team created a process by which content would flow from each division into “newsletter” engines it created. Each division could submit custom content based on its own specific product lines.

According to Dave Kleinberg, Digital Impact’s senior VP of marking, newsletter content would need to be based on a combination of elements such as products owned, customer profiles, and click-through activity on the various Web sites and on information and offers division managers submitted to “personalization engines.”

Those engines work like this:

• Each piece of content has a “descriptor” that identifies and categorizes the content according to a standard set of codes. Content descriptors, or “keys,” were created to match another set of personally identifiable keys about the customer.
• A set of rules was created to match content with the customer.
• A newsletter template was developed to display the content.
• A “dating factor” was developed so messages could be further timed by length of product ownership.

Handling that final piece — the creative design of the email newsletters that would display the content created by these personalization engines — was placed in the hands of the Curiosity Group.

Email newsletters created by these content engines were designed based on customer surveys that determined optimal length and frequency. For example, the IT newsletter features a cleaner design. Articles are shorter and packed with information and links. The business professional newsletter features a different look and feel characterized by easy-to-understand tips and hints.

Attention to unique wants and needs of the recipient is key. Too often, email content is convoluted, confusing, and developed with no earthly idea of recipient needs. Care in writing and presentation were a big part of the overall success of the program.

End Results and Lessons Learned

Based on the metrics outlined at the start of the project, Horstmeier and his team determined:

• Customers who received the newsletters influenced $26 million dollars in revenue per month, or about $100 per subscriber per year.
• Content and links to FAQ pages and Web sites reduced expenses associated with support by $250,000 and helped customers get answers to questions faster.
• Subscribers had an 88 percent satisfaction rate.
• HP enjoyed a 42 percent loyalty rate among subscribers.
• The unsubscribe rate (an excellent indicator of the quality and relevance of content) was below 1 percent a month — well below the average for most other email lists.
• The spam complaint rate was (and remains) just about zero.

But what about the rest of us? Most of us don’t have the financial and human resources available to HP. Can we duplicate its success?

The answer is a resounding “yes.” Reduce the scale and mimic the process.

So, you haven’t sold 220 million printers. So you don’t have 3 million names in your database. Heck, maybe you don’t have any customers at all. None of that matters. You simply need to apply what HP did to your own business in the most relevant way:

1. Identify your customers and the content they want/need.
2. Determine how you can best provide that content to create ongoing e-relationships.
3. Determine how you can present relevant offers that lead to sales while reducing costs.
4. Figure out how you can use technology to make all this happen.

I hope you found this case study to be as packed with valuable lessons as I did, and I hope you’ll share with me other examples of excellence in email marketing. Keep reading!