CMO Close-Up: Tell us a bit about your technology, the market and the development of the xPrintServer.
Tullio: Historically, we're a "silent ingredient" company. We connect stuff in the machine-to-machine space, such as a vending machine that might talk back to headquarters when it's out of Coke, or a glucose monitor in a hospital that sends information to a physician's iPad. As a company, we've had our ups and downs and almost a complete management change last year—I'm one of the ones still standing. The first week after Kurt came in, he said we needed a quick win, something to put us on the map. He had an iPad in his hand, noted he couldn't print with it, and that perhaps our core technology could do something like that. He challenged our chief technical architect to do that, and he came back with a prototype in October 2011.
CMO Close-Up: Why did you choose to first market the xPrintServer's use in office environments?
Tullio: We started with our business solution because of the "bring your own device" phenomenon. IT people hate it when employees walk in with any device and say they want it to work. And we are a b-to-b company, so we decided to start there. After the launch, we got a lot of interest from consumers, however, so we launched a consumer edition in June. One difference is that the enterprise edition supports unlimited users and printers.
Now there are a number of software solutions to printing with an iPad, and many new consumer printers come equipped with that capability. But there aren't many business printers that are so enabled. Printing is more difficult than it seems.
CMO Close-Up: How did you develop your plan to market the new device?
Tullio: Our budget was severely limited, maybe $50,000 or $60,000, and we had to launch in December. The iPad was experiencing rapid adoption and we felt we could exploit the opportunity, but the challenge was on us to create this category. Mobile printing wasn't much at that time. We had to establish the market.
We tried a first phase concentrating on buzz, inspiring a groundswell of early adopters and influencers to get the word out. We did live demos at our official launch at the Consumer Electronics Show, the Macworld conference and many little events, where we volunteered to put up a print station that allowed people to print things from their iPads.
Our message was tightly controlled, focusing on ease and simplicity. You just open the box and plug it in. We laid out what the product did and the competitive set, and let the reviewers and influencers take it from there.
CMO Close-Up: What other marketing elements did you employ?
Tullio: Our online marketing consisted of SEO and Adwords. And we began seeding other influencers, such as Apple sales reps, resellers, analysts and IT consultants by sending units to them to try. And we took a funny approach with a launch video that spiked interest in the product. We saw that we needed to convey that people can use it at work. Everybody in the video filmed in our own office is a Lantronix employee except the IT guy.
CMO Close-Up: What will the next phase of the campaign be like?
Tullio: We're scaling on a bigger level, educating people about the problems of setting up printers. And we're looking at recruiting printing companies, such as Okidata, to embed the solution in their printers. Also, social media will be the new core of our strategy, now that we've identified 50 or 60 key influencers of all types and across several verticals.
The xPrintServer is our must successful product in 20 years. The marketing ROI after just about a year is over 1,000% and, even if you factor in development costs, it's still a few hundred percent.