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HP leverages deep customer insight with opt-in e-mail newsletter

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The "voice of the customer" means more to Hewlett-Packard Co. than just a marketing consulting catchphrase. It's the first step in an evolving opt-in marketing methodology that is showing big returns for the far-reaching $90 billion business technology giant.

HP has begun to undertake "voice of the customer" studies before managers even begin to craft e-mail communications to customers. Each case is different, but that research can include talking to current and prospective customers, and HP's sales reps, engineers and other departmental personnel, as well as crunching numbers and surfing the Web for insights.

"Do we use voice of the customer every time? No, but we want to," said Garry Dawson, marketing communications manager at HP. "We've found we always get better returns when we do it. It's a discipline we're really trying to institute."

The indoctrination began several years ago when HP began to shift marketing strategy away from a pure sales focus to that of a customer relationship one. While HP is still interested in making sales, the new thinking conveys that the best way to make sales is by building great relationships.

"We want to be trusted partners for our customers. In order to do that, we can't have transactional relationships," Dawson said. "We've developed a whole new way of thinking. One element of that is how we go to market."

That go-to-market strategy begins by looking at each customer's "pain points" and then developing products and solutions to address those problems, he said, versus "the old way, which was, `We've got a great product, let's go tell everyone about it.' "

The extra time and work have paid off. For HP, the specialized newsletter "Technology at Work" has been especially successful at targeting customers and building business. The e-mail newsletters go out monthly to more than 3 million HP customers and prospects who have answered some or many questions about their business needs to get an individually tailored message.

Forrester Research analyst Shar VanBoskirk estimates that "Technology at Work" influences some $100 million in revenue. She profiled "Technology at Work" as an e-mail marketing best practices case study and said it is a "good model for b-to-b marketers" with its "emphasis on deep customer research, relentless testing and continual improvement."

"It's important to differentiate between permission marketing and consensual opt-in marketing," said Ernan Ronan, president of HP agency Ernan Ronan Direct Marketing. "The empowerment of the customer to define the terms of engagement is a huge differentiator. … [For HP], it's a very intimate profiling of the needs that engage customers, and differentiates HP for even asking. It also puts the burden back on HP to honor that … and sustain it."

Other smaller, and more targeted e-mail marketing efforts at HP have also met with success using "voice of the customer." One standout example began some 18 months ago when HP executives asked sales representatives in its health care division to put together a list of potential client companies and the executive there with whom they would most like to meet. The marketing department used targeted data to craft a compelling e-mail with a wry (and literal) description of industry pain points to about 100 of those executives. Forty-four agreed to an initial face-to-face meeting with a sales representative. Even more positive, those meetings and ensuing relationships resulted in $15 million worth of new business, Dawson said.

Opt-in no longer enough

While e-mail marketing is thriving for b-to-b marketers—Jupiter Research analyst David Daniels forecasts growth from $192 million in 2006 to $206 million in 2010—HP is finding out, like many others, that the traditional practice of opt-in marketing is no longer enough. Daniels said a passive agreement to accept e-mail or newsletters from a company will not create the kind of give-and-take customer relationship that successful businesses need to differentiate themselves.

Marketers that use advanced tactics, such as dynamic content and segmentation by user data, report higher click-through rates—more than 10% for two-thirds of those surveyed by MarketSherpa in an October study.

"We're going for that deeper understanding, like a sales rep who's been calling on a business for years, might have," Dawson said. "In every communication, you have to earn the right to have another one. You can't abuse that." M

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