Xerox, like other printer and copier vendors, doesn't make a lot of money selling hardware. However, the company more than makes up for this by selling supplies such as toner or ink. The trick, of course, is getting businesses to commit to buy those supplies directly from Xerox rather than the local office supply store.
In 2002, the company decided to try and do just that by introducing an e-mail marketing campaign targeted to those prospects that couldn't afford to purchase Xerox hardware outright but did have a monthly office supplies budget.
Prospects received an e-mail offer for a free printer and, not surprisingly, only a handful responded, said Mike Milligan, VP-marketing communications for the office group at Xerox. The offer just wasn't good enough, he said.
"We were trying to drive the largest volume of people through the front door, but that wasn't the best strategy because we were driving the wrong types of customers—people who weren't going to print enough," he said.
The campaign needed some tweaking. There were a number of problems with the program. Frequency was definitely an issue, so Xerox increased the number of messages going out from about one each quarter to one every other week.
Another roadblock for Xerox was not solidifying the overall marketing message early on. For example, the company realized that, although an important piece of the campaign, its brand shouldn't be displayed prominently in the e-mail's subject line. The campaign experienced better results with generic subject lines such as "special color printer offer."
"We found that oftentimes, using the word 'Xerox' in the subject did not compel people to open or respond to the e-mail because using 'Xerox' conjured up conventional perceptions about what kind of product they might be investigating," he said. "In other words, we've found the people think Xerox equals expensive, big products for big companies. By not even using the company name in the e-mail, they investigated what the offer was and when they then discovered it was from Xerox, that came as a surprise, in a positive way."
Another messaging problem arose because, in initial e-mails, Xerox wasn't forthcoming about what people were signing up for when they got their free printer. Today, however, the campaign creative has been changed so recipients know immediately that in exchange for the free printer they must promise to print a specific amount of pages each month and purchase printing supplies from Xerox in the form of a three-year supplies contract.
"Because we're completely open we're getting better customers and we're more profitable," Milligan said.
He's also added campaign components—additional e-mails—for those who either don't qualify for a free printer, who are accepted but don't follow through and those who express interest but don't provide good contact information. Customers at the end of the three-year term are also targeted. In the past, these prospect segments didn't receive anything from the company.
"We're remarketing to all of these people," Milligan said.
All of these strategy elements have taken the campaign's results from a flat market share to that of a significant boost. Last year, Xerox surpassed its unit sales plan by 12%, Milligan said.
"This is still quite substantial given the challenges of this free color printer program," he said.