Like most b-to-b marketers, IBM's Small and Medium Business in the Americas three years ago was sending its extensive customer database monthly e-mail newsletters. But the company had a dismal 1% to 2% open rate. Of those, only 1.5% clicked through. At the same time, IBM executives started getting what Leslie Reiser, senior manager of relationship and interactive marketing for small and midsize business in the Americas, calls truly innovative e-mails from the competition. "We realized we needed to get an edge on the competition at that point," she said.
IBM tapped interactive agency IQ Interactive to create a rich media e-mail campaign. The agency came up with a new e-mail format, a video player that merges e-mail and a TV-like experience-with a twist.
Customers receive e-mails containing highlights of the current issue along with a link. When they click through, they are taken directly to a DVD-like player screen.
The programs, which are created by the marketing team with the help of 25 subject matter experts within IBM, tie business issues and industry trends back to IBM's current marketing campaigns. Each story is carefully crafted to not only entertain but engage, Reiser said.
"At every point, the newsletter isn't about watching a movie and going off," Reiser said. "It's a constant call to action; it's collecting more information, while still giving that viewer total control so they can flip from article to article, and link deeper into content."
The Flash-based newsletter was an almost instant success. Its open rate skyrocketed to 22.8%, from 1% before the relaunch. Click-through jumped to 11.1% from 1.5%. Customers stay with the newsletter, too, watching video for an average of five to seven minutes.
Some months the response is even more impressive.
"We ran a feature story last April and we had a 76% follow-through for those who watched the Web show; 76% of people filled out an electronic form so they could download a white paper," Reiser said.
The newsletter's budget is about $500,000 per year, some of which goes toward two agency fees (exclusive of salaries for the three full-time people who work on the product). However, the investment has paid off in a big way. For instance, the newsletters have also become a library of portable sales tools. IBM often reuses the video at trade shows and events, and salespeople use it as a sales enablement tool, Reiser said.
Most important, although the newsletter wasn't intended to generate direct sales-its objective was to create thought leadership, Reiser said-in the last year alone, IBM has gotten several large business opportunities directly from newsletter traffic, including one worth $12 million to $15 million. In fact, 15% of revenue generated through the Americas small and medium business Web site is influenced by the newsletter. The HTML version of the newsletter had no measurable Web revenue.
"In a perfect world, we'd have the resources and funding to send salespeople out to every client, but we don't," Reiser said. "This video newsletter does that for [us]. It connects us with the customer; it's a viewer-controlled virtual extension of the IBM sales force."