The Challenge :

Consistent, targeted customer communications, across numerous product teams.

HP's multiple product teams were independently sending emails to their IT and non-IT customers with low knowledge of their customers' communication or product needs. Each team offered its customers only product promotions, as opposed to a comprehensive HP solution. HP envisioned a consolidated email marketing program to gather and analyze useful data about new and current customers, then offer personalized and relevant communications on a consistent schedule. Initial research showed that customers wanted support information rather than marketing information. IT customers indicated the types of content they wished to receive, whereas non-IT customers expected HP to "figure out" what they wanted.

The Solution:

A One-to-One Personalization Engine That Sends Uniquely Personalized Content to Each Individual 

HP realized that they needed two types of communications for each main audience, IT and non-IT professionals. They asked Digital Impact to come up with a solution to the problem.

Digital Impact recommended a One-to-One email personalization "engine" to send uniquely personalized email messages based on the customer's product ownership, IT professionals, and content preferences.

HP signed on, and the result was one-to-one marketing. The personalization engine micro-segments HP's customers (rather than just segmenting the audience into large clusters), sending out 50,000 to 100,000 different content combinations each month. The engine draws information from HP's customer and content profiles, and places the content in templates to create a customized monthly newsletter, known as Incoming. Customers receive only information that is relevant to them, with no overlap or duplication from other HP product teams.

Most subscribers sign-up for the newsletter by completing a registration card online after their company purchases an HP product. The newsletter -- sent to half a million companies -- draws from a content pool that includes about 100 items, including all HP printers, PCs and computer-storage products. Each content item in the message includes a link to a web page, which enables Digital Impact to track the customer's activity. Over-time, their click-through behavior is recorded, and added to the information they provide when they subscribe to the newsletter. It takes about six months of sending the newsletter and analyzing the click-through data to produce truly specialized content.

"We collect all the data, and then a calculation is done on each person: Do they have a product, and what is the life-cycle messaging? What do we know about them?" says Paul Horstmeier, North American e-marketing manager in HP's Boise, ID office. "Over time, everybody gets a different newsletter."

The newsletter was designed to provide usage tips at the right time (life-cycle message), assist with business problems, help the customer understand HP's offerings, and encourage the customer to continue ordering from HP. About half the newsletter's content relates to where the customer is in the product life-cycle at that time.

Results:

Increased Revenue, Decreased Costs, and Greater Customer Lifetime Value.

After engaging in integrated, targeted marketing, HP witnessed immediate increases in revenue, and outstanding cost savings. For the house lists, HP realized annualized sales of over $300 million, as well as:

1. Nearly $3.6 million annually in total marketing cost savings. A test comparing direct mail to the online Incoming newsletter showed that email costs only $7 per lead, while direct mail costs $163. "That made email 27 times more efficient than direct mail," says Paul Horstmeier. "We no longer use direct mail to drive people to the Web."
2. Almost $4.2 million annually in support cost avoidance. By driving customers to direct inquiries to HP via email rather than by phone, HP spent only 3 to 8 cents per inquiry, rather than $15 for a phone call.

Based on these results, Horstmeier concluded that one to-one marketing "almost pays for itself in cost-avoidance alone".

Long term, HP will realize greater customer lifetime value as they continue to meet their customers' changing needs with the customized messages one-to-one marketing delivers.

At Acxiom Digital we strive to make every client engagement a successful one. From winning creative to industry-leading enterprise technology, read more about how our efforts and expertise can solve your problems.

About HP:

Hewlett-Packard is a technology solutions provider to consumers, businesses and institutions globally. The company’s offerings span IT infrastructure, global services, business and home computing, and imaging & printing.