Cost-cutting leads eRoom to e-mail efficiency

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Last summer, the employees of online collaboration tool provider eRoom Technology Inc. were given a directive: Cut the fat. The company had recently achieved cash-flow break-even, and executives hoped that, with a little extra effort, results could wander into the black.

In the marketing department, that meant cutting eRoom’s advertising budget in half; direct mail and print advertising were the first campaigns to go. The company turned to e-mail marketing as a replacement for offline collateral.

ERoom partnered with e-mail marketing provider e-Dialog to boost brand recognition and acquire new customers. All customer communications would go out via e-mail, using a combination of the company’s 65,000-name e-mail address list and qualified lists bought from outside providers.

Even with the added cost of purchased lists, the move reduced marketing expenses by 50% right away.

"We cut the budget in half and were still able to see the same amount of leads coming in," said Jennifer Richardson, director of events and partner marketing for Cambridge, Mass.-based eRoom.

ERoom analyzed its success using e-Dialog’s reporting tools. Immediately after a campaign went out, eRoom watched to see how many people opened the e-mail. At first, it measured its return on investment by comparing the number of e-mails it sent out to the number of leads it received from its mailings. Click-through was also important.

"At the time, we were looking for awareness—gaining awareness across a large audience," Richardson said.

But, she said, the company quickly learned that click-through isn’t the end-all. Even if everyone opens a specific e-mail, it doesn’t mean that the right people saw the message, she said.

Cognizant of this, Richardson is working on a new e-mail program that may bring in fewer leads but translate into more sales. "We’re implementing a new plan to map our e-mail program and penetrate into vertical markets," she said.

To that end, Richardson and e-Dialog are using a survey that will ask recipients for information about their companies. Only customers who fall into the target customer profile will receive future mailings.

Database cleansing

ERoom is also paring down its e-mail lists. E-Dialog will clean out eRoom’s database, removing duplicate entries and dead addresses. For example, the company’s largest customer is Hewlett-Packard Co. Because eRoom’s database was cobbled together from a variety of sources, one customer might have two or more entries.

Once the database is clean, eRoom will start analyzing the results of its campaigns. Again, click-through will be important, but it won’t exist in a vacuum. Richardson plans to send surveys to everyone who opens her marketing message so she can find out which ones are making the best impact. She’s also following leads through the entire customer cycle.

A customer will count as a return on the company’s investment only if he or she actually makes a purchase, which requires additional tracking using offline customer relationship management (CRM) metrics as well.

"We are small enough—200 people—that we should be working closely with sales so we can better understand how to get people into the sales pipeline," Richardson said.

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