In 1995, when office products manufacturer Avery Dennison Corp. decided to label its customers, it was starting with a blank slate. Six years later, the Pasadena, Calif.-based specialist in labels, papers, films, foils and pens is among the most sophisticated b-to-b manufacturers in using campaign management to manage one-to-one relationships.
As a manufacturer, Avery Dennison is unusual, said Bill Chambers, principal analyst with Doculabs Inc. Many b-to-b manufacturers are just starting to build the customer databases and other campaign management applications necessary to run effective marketing campaigns, he said.
"B-to-b marketing departments are being required to do more than direct marketing and telemarketing campaigns, but I don’t think most marketers are yet convinced of the value," said Chambers, who estimates that b-to-b marketers should budget at least $500,000 for a campaign management system. "CEOs and CFOs, who are responsible for ROI [return on investment], are the ones demanding and pressuring for campaign management."
Leader of the pack
Avery Dennison was ahead of the game. In 1995, the company began building a customer database of secretaries, office managers and small offices/home offices through its Office Products division.
The idea was to find as many of the 5.5 million secretaries and office managers—Avery Dennison’s most valuable customers—in the U.S. Leads were collected via responses to the company’s 800 number customer service line, and surveys included in products and on the Internet. More than 2.8 million names have been collected to date.
Avery Dennison uses those lists along with marketing, e-mail and data cleansing services to manage campaigns, said Hossein Hosseini, database marketing manager for Avery Dennison.
"Prior to developing a customer database, and because we sold direct to retailers, we were removed from our end-user consumers," Hosseini said. "Our campaign management had to start with a database."
Customer information was spread throughout Avery Dennison’s enterprise—a global operation that generated $963.2 million in sales for the first quarter, ended March 31. That made it impossible to promote multiple Avery Dennison products to individual customers, he said.
"Marketing departments had their own little boxes of information," Hosseini said. "With the introduction of the Web, we saw an opportunity for collecting information centrally."
A few years later, Avery Dennison began collecting Web addresses. It sent out a special mailing to its list to see whether recipients would agree to online marketing. Of its 2.8 million names, more than 600,000 people have granted permission to be marketed via e-mail, Hosseini said. Now, the company frequently uses e-mail campaigns to test and launch new products.
For example, Avery Dennison in December sent 180,000 e-mails to corporate secretaries and office assistants in support of a new product called Index Maker. Between 25% and 35% of respondents accepted the trial offer. And Avery Dennison’s follow-up through telemarketing and campaign management showed that 40% of respondents to the campaign were likely to buy Index Maker.
Avery Dennison maintains its customer database—based on software from Oracle Corp., Redwood City, Calif.—in-house. However, it uses third-party firms to manage many of the campaign management functions.
Gage Marketing Group L.L.C., Minneapolis, develops creative materials for e-mail and direct marketing campaigns. Responsys, Palo Alto, Calif., handles outbound e-mail and analysis of Internet campaigns. Customer lists are cleansed quarterly by Lee Marketing Services, Dallas, Hosseini said.
"In some areas, it made more sense for us to rely on companies that specialize in doing this for a living," Hosseini said. "Our IT department wasn’t as well equipped as the specialists to handle some direct marketing requirements."
Avery Dennison’s contract with Responsys calls for delivery and campaign management for 100,000 e-mails monthly, at a rate between 4 cents and 15 cents apiece, Hosseini said. Avery Dennison uses its own lists to run its campaigns about 90% of the time and buys e-mail lists about 10% of the time, he said.
The purchase of e-mail lists is troublesome because e-mail addresses are often not as sophisticated as direct mail addresses. For example, e-mail lists often lack job titles, magazine interests or other criteria.
As important, e-mail brokers often require that outbound campaigns go through their servers. That makes it impossible for Avery Dennison to verify whether respondents to costly free offers are the intended targets.
"In some cases, the program would get out of hand because a recipient would forward an offer to a bunch of other people for free samples," Hosseini said. "Obviously, that was not the intention of the campaign.
Avery Dennison also uses its campaign management software to identify such problems. Third-party sites have used Internet hot links to direct people to the Web location of free offers. That’s a no-no by Avery Dennison’s standards. When its campaign management analysis software, provided by Responsys, shows a greater than 10% response to an offer, it is a red flag that something may have gone awry, Hosseini said.
Avery Dennison still has some room to grow. Eventually, the company will seek a customer relationship management system that responds in real-time to customers regardless of their point of contact. Today, with lists cleansed on a quarterly basis, information is not that fresh.
"The challenge was, and still is, to decide what makes a unique customer," Hosseini said. "We’ll have more of a CRM solution going forward."