HP Gets It Right, Part 1

One of my goals with this column is to identify examples of email marketing programs that are truly revolutionary in their processes, content, and results. I’ve found one in Hewlett Packard’s (HP’s) customer “e-relationship” program. It’s a great example of doing it right.

In fact, HP’s e-marketing team has built an email system that not only generates more than $300 million in sales per year but also has an unsubscribe rate that is virtually nonexistent and — most impressive of all — generates nearly zero spam complaints.

Sound too good to be true? Sound beyond the financial reach of those of us without HP’s marketing budget? It did to me, too.

But it’s not. In fact, as I quickly learned, HP didn’t need to put major bucks behind its solution. Best of all, it’s a process that can be replicated by the rest of us.

Paul Horstmeier, HP’s North American e-marketing manager, shared with me the nitty-gritty details about how his team built two databases and email “personalization” engines capable of integrating content and offers from more than 30 company Web sites and newsletters — through the application of technology developed by Digital Impact.

The Challenge

Horstmeier’s group was charged with using the Web and email to establish e-relationships with HP’s customers — and the results had to have a measurable impact on the bottom line.

The first challenge was that though HP has sold more than 220 million printers, most of its customers’ identities remained a mystery because purchases were made via resellers. In fact, the group had about 100,000 customer email addresses, just a tiny fraction of its total customer list, to start with.

Translation: They not only had to design the email system, but they also had to create an email database pretty much from scratch, making sure it contained the level of detail needed to drive the program.

The team also had to deal with multiple Web sites, newsletters, and other communication vehicles, all under the auspices of multiple division managers, as well as the duplication of customers in division databases. (It’s an easy guess that someone who bought an HP computer, an HP printer, and HP software is going to appear in at least three different databases.) And that’s not even considering the added complications brought by the merger with Compaq.

That near-zero spam statistic is looking pretty darned miraculous at this point, isn’t it?

Further complicating the assignment — particularly since personalization and customization of the email campaign was going to play a huge role in the success of the final system — were HP’s two customer types — business buyers and IT buyers — each demanding different information upon which to base their purchasing decisions.

Some challenge, huh?

Designing the Solution

Undaunted, Horstmeier and his team tackled the project while keeping sight of concerns so critical in today’s email environment: privacy, spam, and email overload. Here’s how they did it in five “easy” steps.

First, the team clearly and concisely defined HP’s objectives:

• Streamline communications with customers.
• Develop long-term e-relationships.
• Generate sales that can be tracked and measured.
• Reduce costs associated with customer service by phone.

Second, they identified the top-level methodology:

• Identify all HP business groups.
• Define and analyze the messages those groups send to customers.
• Identify the types of customers and the most appropriate messages.
• Determine what customers want from the company.
• Determine how to effectively obtain content from the company’s divisions.
• Determine the role of personalization and customization of email messages.
• Build the database of email addresses and pertinent individual data.
• Determine metrics for measurement of the program.
• Determine the most appropriate presentation of the material.

Third, they conducted internal and external surveys to learn that:

• “Product life cycle messaging” can be accomplished based on the products purchased and how long those products have been in use by the purchaser.
• Different customers want different information at different times.
• Customer profiles can be enriched based on click-through information from HP’s Web sites.
• Customers want to be in control of the relationship.

Fourth, they set about designing the system. For this, they brought in Digital Impact to design a system based on the above steps and with the following features:

• It had to be scalable to millions of records.
• It had to have a high degree of personalization.
• It had to be able to generate highly customized email messages and newsletters.
• It had to be easy to use.
• It had to be completed on time and within budget.
• It had to work.

Fifth, they had to build that email database, adding tens of millions of individual, unduplicated HP customers to the few thousand they already had. They opted to combine two methods:

• Collect subscriber information from HP’s Web sites and existing publications, which, by May, accounted for about 35 percent of the 2 million names they had added.
• Buy names from third-party vendors, which made up the other 65 percent.

My next column will pick up here. Keep reading.

Join us at ClickZ E-Mail Strategies in Chicago on Thursday, August 8.