Doing More for Less Money…Without Going Broke

The Problem:
How do you reduce the cost of developing sales leads among upper-level decision makers without sacrificing communication quality?

The Company:
Softrax, an enterprise software company based in Canton, Massachusetts, sells its revenue cycle automation program to top-level corporate executives.

The Technology Solution:
By offering prospective customers access to free online seminars, businesses can simultaneously attract and educate highly targeted audiences. At one time, conducting a presentation via the Internet (also referred to as webcasting) was an extremely complicated and expensive proposition.  But all that has changed with the growing availability of broadband communications, faster computers, and the widespread use of such multimedia accessories as cameras, headphones, and microphones.

In fact, many industry experts have declared that webcasting is poised to utterly eliminate physical world conferences and seminars.  Besides the simple convenience of gaining access to the top decision-makers in multiple companies with a single presentation, webcasts also reduce travel, printing, and communication expenses.

The Outcome:
Instead of handling the webcasting task in-house, Softrax decided to rely on the expertise of ON24, a webcasting company that provides full video production and data capture capabilities. The collaboration allows Softrax to concentrate on providing cutting edge content, delivered by industry experts that the targeted executives want to hear. Meanwhile, ON24 ensures a seamless technical experience to enhance Softrax’s image as a sophisticated industry leader.

As a result, Softrax has found that the webinars it produces several times a month have become valuable generators for highly targeted and motivated sales leads.

Tune in tomorrow when DataDocsDailyDose.com will see how borrowing ideas from the past and updating them with today’s technology turned an ordinary retailer into a marketing powerhouse.

–J.D. Mosley-Matchett, Ph.D.
“The Data Doc“
You have questions? She has answers!

Turning Readers into Doers

The Problem:
Mailing lists are great, but how do you change the people who read your company’s e-mails into an interactive and responsive audience of fans anxious to pass your message along to their friends?

The Company:
Garden Fresh Restaurant Corp. has served made-from-scratch menu items since 1978 and now operates 100 company-owned, buffet-style restaurants. Garden Fresh offers fresh, healthy meals under the restaurant chain names of Souplantation and Sweet Tomatoes.

The Technology Solution:
In March 2005, Garden Fresh created its Club Veg program to provide interested customers with e-mailed information about special offers and monthly food themes. The program became a hit with more than half a million people registered. In 2006, the company began using its e-mail communications to direct club members to the website.

In 2007, the company launched an eight-week “Passport Promotion” that provided club members with two-week promotions for each of four cuisines reminiscent of Greece, Italy, Mexico, and Asia. This time, an interactive website activity allowed members to personalize themed postcards and electronically send them to friends as invitations to dine at a Garden Fresh restaurant together.

The Outcome:
When the company first tried using the Club Veg mailing list in August 2006 to direct members to the website, the site’s traffic nearly doubled. The Passport Promotion showed the value of frequent theme changes that keep customers’ interest levels high and response rates lively. But most important, the interactivity boosts customer loyalty and promotes open communication.

Garden Fresh uses the Club Veg program to reward its most loyal guests with coupons, chances to win free meals, and recipes. Tomorrow DataDocsDailyDose.com will see what online seminars can do to boost your bottom line.

–J.D. Mosley-Matchett, Ph.D.
“The Data Doc“
You have questions? She has answers!

Tapping the Facebook Audience

The Problem:
How can a small, start-up company with a miniscule advertising budget target a limited-edition product to an elusive demographic without breaking its bank?

The Company:
Bonobos, selling trendy athletic-cut pants online since October 2007.

The Technology Solution:
Andy Dunn, the Chief Executive at Bonobos has a Stanford MBA and a jaundiced opinion of advertising. But when his business partner designed a limited edition line of pants for Chicago Cubs baseball fans, Dunn knew he’d have to do some innovative marketing to locate men willing to spend $120 to wear bright blue pants with baseballs decorating the lining material and pocket edges.

Dunn decided the best approach would be to try a new Facebook self-service display ad system that had just been introduced in November 2007. Taking its cue from Google’s economic rise via self-service text ads, Facebook designed its Social Ads to be simple to create and deploy. Dunn figures that it took only a few minutes to create an ad only seen by Chicago-area men whose Facebook profiles stated they were Cubs fans.

The Outcome:
Dunn’s quickly launched ad ended up costing the company a total cost of $63. The ad was seen more than 250,000 times. And Bonobos sold out the entire line of pants.

Still, despite the obvious marketing potential offered by Social Ads, there are many Facebook members who consider them problematic. Because Social Ads are based on Facebook’s Beacon technology, there are recurring concerns about real and imagined privacy violations.

Facebook’s introduction of Beacon instantly met with resistance from its community members because there was no mechanism for its 50-million users to opt out of the system’s activity posts. The result was advertiser-sponsored stories being spread to each community member’s circle of friends in a manner that was generally considered an unacceptable form of spam.

Then in October 2007, retailing giant Target further soured the sponsorship possibilities and scored a widely publicized black eye with its misguided attempt to control the actions of its Facebook group dubbed the Target Rounders. The bad publicity made members even more reluctant to trust Facebook’s monetization efforts. Although Social Ads now allow members to prevent any public Facebook display of their private transactions made on other websites, there still remains no way for them to permanently block Beacon ads.

For now, Bonobos’ success proves that Social Ads can provide a win-win-win situation for small-budget advertisers, social network sites, and their online communities. Tomorrow DataDocsDailyDose.com will examine how one company used e-mail to transform its customers into advocates.

–J.D. Mosley-Matchett, Ph.D.
“The Data Doc“
You have questions? She has answers!

Gather a Passionate Community

The Problem:
With rapidly falling barriers to entry, competition among online businesses is more intense than ever. How does a new company in an established market gain the trust and customer volume needed to succeed?

The Company:
TradeKing, an online discount brokerage site that launched in late 2005.

The Technology Solution:
As a new company entering a seemingly saturated market for online stock trading, founder and CEO Donato A. Montanaro, Jr. launched TradeKing in 2005 with the tag line: “No Minimums, No Catches, No, Seriously.” Taking a low-price approach ($4.95 per trade and 65 cents per option contract) combined with high-tech online tools, TradeKing provides do-it-yourself investors with the power to efficiently and economically “work the Street” with market snapshots, volatility charts, technical analysis based on pattern recognition technology, and research reports on a 24/7 basis.

However, Montanaro didn’t rely on the “if you build it, they will come” philosophy that snares so many budding Internet entrepreneurs. Instead, he used the TradeKing site as a hosting point for multiple blogs, discussion lists, chatrooms, and trading clubs. As he stated in an August 2007 video interview for the Reuters international news service, “Clients who socially network more, trade more.” Montanaro’s premise must be correct, because the site has been dubbed the fastest growing company in its industry.

The Outcome:
For two years in a row, TradeKing has been rated the #1 discount broker by the editors of the Wall Street Journal’s SmartMoney magazine. The Dow Jones magazine Barron’s listed TradeKing among the top five in its March 2007 online broker survey. And if imitation is indeed the sincerest form of flattery, then newcomers such as Zecco.com provide further proof that TradeKing’s community-based business formula is worthy of duplication.

But such mimicry forces TradeKing to embrace continuous technology development to stay one step ahead of its competition. With new product offerings, such as the May 8th, 2008 introduction of Fixed Return Options heralded by Montanaro ringing the opening bell at the New York Stock Exchange, TradeKing appears ready to meet its challengers head on…because resting on one’s laurels is not an option in the age of social networking.

TradeKing is only one company that has tapped into the power of online communities. Tomorrow’s mini-case at DataDocsDailyDose.com will provide you with a look at a very different start-up company that leveraged social networking in a very different way.

–J.D. Mosley-Matchett, Ph.D.
“The Data Doc“
You have questions? She has answers!

Don’t Overlook the Personal Element

The Problem:
Software is not a magic wand. If a company adopts a program that is designed to integrate its various functional areas, the managers must ensure that the company’s people are provided with adequate incentives to take advantage of the anticipated efficiencies. Unless the company’s managers help their staff embrace new technology, the result can become a communication blockade with inefficiencies spanning the organization.

The Company:
Researchers Majed Al-Mashari and Mohamed Zairi at the University of Bradford in the United Kingdom examined the efforts of a major Middle-Eastern manufacturing company that they code-named Manco.

The Technology Solution:
These researchers investigated Manco’s failed efforts to implement SAP, a sophisticated enterprise resource planning (ERP) system. SAP is a computer-based system that unites the information used throughout a company. In that way, diverse departments such as accounting, inventory, sales, and distribution can tap into a single, integrated data model and boost efficiency across the company.

The Outcome:
Although the promise of seamless information sharing throughout a company makes perfect sense on paper, turning the concept into reality may not be a simple effort when the company’s culture isn’t flexible enough to accommodate new and interactive procedures. As the researchers noted, “Unlike many software installations, SAP R/3 installation is a difficult undertaking in that its success necessitates managing adequately a complex context, which involves organizational changes across various key areas related to strategy, technology, culture, management systems, human resources, and structure.” Unfortunately, Manco focused on the technical aspects of the software implementation without adequate attention paid to the other managerial issues.

As a result, instead of using SAP to become a more customer-focused, efficient, and cost-effective competitor in its market, Manco discovered that its responsiveness, reliability, and manufacturing effectiveness plummeted.

The first decision that triggered Manco’s problems occurred when the company Manco tapped for its SAP support recommended a more robust IT infrastructure to facilitate SAP’s complex applications. The company spent $2.8 million to implement SAP, only to achieve a negative return on its investment (ROI).

The key factor underlying the failure stemmed from Manco’s management team underestimating the impact of employee anxiety. When top management first evaluated the expected ROI, much of the savings offered by SAP was based on a resulting reduction in Manco’s labor force. In other words, the people who were expected to help integrate SAP were the very people the software would eventually make redundant. Although there were other issues that further contributed to the failure of Manco’s SAP adoption, it was this initial misstep that represented the fatal flaw.

This was a clear case of how a lack of internal communication can cost a company dearly. The next case study at DataDocsDailyDose.com will show you how communication improvements not only improve employee morale, but also improve the corporate bottom line.

–J.D. Mosley-Matchett, Ph.D.
“The Data Doc“
You have questions? She has answers!

Market Segmentation Lets You KISS Your Customers

I’ve decided to try a different medium/ So, here’s the latest post in a video format:

Thanks for listening to this “Daily Dose” of marketing science!