EC-Gate recently began sending walnuts, enclosed in cardboard boxes sans a return address, to some 400 food-service companies throughout the U.S. (It specializes in e-hubs for that industry.) A few days later it sent another box, this time enclosing a silver nutcracker and a pamphlet resembling an annual report that described EC-Gate’s services.
The company intended to convey that building an e-marketplace needn’t be daunting and complex, but instead could be as simple as, well, cracking a nut.
Seeking to stand out
The idea, said EC-Gate VP-marketing Lynne Kilpatrick, was to stand out in the teeming U.S. exchange-building space. Notably, it chose offline direct marketing to do so, instead of running ads in technology magazines.
"It’s impossible to stand out in the industry magazines unless you have the wherewithal to purchase significant weight," Kilpatrick said. "We are a small company and not big enough to focus our marketing dollars on brand awareness. So we started to think about direct marketing because it’s an inexpensive and great way to grab your audience."
Kilpatrick declined to say how much EC-Gate spent on its walnut campaign. But industry experts estimated the cost in the $100,000 to $200,000 range.
Greg Bassine, CEO of Portland, Ore.-based consultancy DMG Direct Inc., said that campaigns such as EC-Gate’s are particularly good for micro-targeted efforts aimed at highly desired clients. "You’re targeting ‘A’ clients," Bassine said. "For something that costs you $15 or $20 to mail out, the return rate is excellent. You’re going to convert three or four of those."
Kilpatrick said it was too early to know how many of the campaign’s recipients had been sold on EC-Gate. But she said that the campaign has proven to be a door opener for its 10 North American salespeople.
"We’re focused on generating leads," Kilpatrick said. "The goal is to open the door for salespeople. People are telling them, ‘Oh, you sent the nut. Sure.’ "
Cracking the competition
Its direct marketing campaign notwithstanding, EC-Gate faces a harsh battle in its effort to draw food-service clients away from better-known e-business enablers. The food-service industry was seen early on as being in dire need of the cost savings that can be had through e-procurement.
Many players have long been targeting this industry. Among the standouts: Accel-KKR Internet Co., which with Cargill Inc., Tyson Foods Inc., McDonald’s Corp. and others is building the eFS Network expected to be the food-service industry’s top hub.
Still, Kilpatrick contends EC-Gate’s campaign can help it compete. "We are an unknown company and it’s hard to get at the decision-makers who have never heard of us," she said. "Direct marketing has been good for us."