Microsoft 'pain point' campaign gets boost from segmentation

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Microsoft Corp. last week deployed the latest part of an ongoing direct response campaign that relies on database segmentation to more effectively target small businesses. The campaign, which is designed to show how the company’s XP Desktop applications can address small businesses’ "pain points," included 2 million pieces of direct mail and 5 million e-mails.

San Francisco-based MRM Gould, a division of MRM Partners Worldwide, created the campaign for Microsoft’s small-business division.

"We needed to fine-tune our messaging strategies to small businesses around the world," said Lisa Lix, Microsoft direct marketing manager-U.S. small business marketing.

To assist Microsoft’s direct marketing and retail resellers, MRM Gould created global "go-to-market campaign kits" for each stage of the campaign. These included templates for direct mail, e-mail, banner ads, letterhead and other collateral materials. The kit helps Microsoft maintain consistent yet relevant messages for a host of media and for specific customer segments.

Microsoft divided its target audience into four segments: business owners, business decision-makers, technical decision-makers and women-owned businesses. The company further segmented those categories, sorting companies by vertical industry, number of employees and number of PCs.

MRM Gould created nine versions of the creative material. Mail to technical decision-makers, for example, focused on XP’s ability to simplify technical issues within corporations, while a package to business owners concentrated on corporate revenue benefits. Vertical industries received packages that addressed specific needs within that particular industry.

All direct mail pieces included an offer for a Gateway Inc. notebook computer pre-loaded with Windows or Office software. The tri-fold pieces included suggestions on how to connect with customers and colleagues using Windows XP and Office XP.

Lix said Microsoft’s strategy also used "RFM" (recency/frequency/
monetary) segmentation, a tactic used to determine best customers based on recent purchases, how frequently purchases are made and total monetary value. "We learned legal and accounting [segments] were two very strong verticals for us," she said.

Microsoft applied a similar segmentation strategy to the e-mail marketing portion of the campaign, for which it rented opt-in e-mail names from Yesmail Inc. The campaign also included banner ads, which will run through June on a variety of Web sites.

The initial segmentation strategies have paid off so well that Microsoft is now refining the process further, Lix said. "We’re going beyond just the number of PCs and number of employees to looking at several demographics, as well as firmographic information [such as number of employees or revenue] and combining that with our own transactional history," Lix said.

That more mature segmentation approach will roll out in the company’s next fiscal year, which begins in July.

Lix said Microsoft is always trying to improve its response rates, but she indicated that return on investment is considered the most meaningful metric. "We’re working toward more precision in our marketing efforts with the goal of maximizing our ROI," she said.

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