A First-Class Ticket to ROI
What could be more helpful when planning a cruise than a colorful, glossy brochure depicting white sand beaches and sunlit turquoise seas? And, in addition to pictures of a luxury ocean liner, each information-rich page gives prices and dates for that tropical get away. It is perfect--unless of course the customer really wants to cruise to Alaska.
This was the dilemma of Vantage Deluxe World Travel, a Boston-based provider of travel services for some half a million senior vacationers. In its nearly 20 years of operation the company has had ongoing success with direct mail campaigns like brochures. However, these paper promotions are expensive--as much as $7 total cost per piece, per customer. To save money and make mailings more effective the key would be to ensure that clients only received material about trip packages that they would likely take.
"We wanted to achieve more targeted campaigns and share package information with thousands of customers at once--at a moment's notice and at a lower cost," says Tracy Emerick, senior vice president of marketing at Vantage. "Email blasts seemed the way to go, and we hired an outside company to start the ball rolling."
The email blast service was rolled out in the spring of 2001. Although it reached thousands of customers, Vantage soon discovered that targeting the right customers at the right time was an issue. Also, Emerick says, the cost was beginning to outweigh the benefit.
"We found it increasingly difficult using an outside player because, like most companies, the vendor's business cycles are biweekly and monthly, but our internal business cycles aren't built around that. Between the approval process and going back and forth, it just took too long to get a campaign going," Emerick says.
Vantage then began to examine the variable cost of staying with outside vendors or buying a CRM marketing package and bringing the work in-house.
"If you were going to only do 10,000 emails, outside vendors are a better alternative. If you are going to do a million blasts or so a week, it gets to be fairly pricey," Emerick says.
To bring its e-marketing business inside, Vantage chose MarketFirst, a Mountain View, Calif.--based company specializing in delivering CRM applications for use primarily in marketing endeavors. Built on an enterprise-level marketing automation platform, MarketFirst's product comprises components for lead management, direct management, and event management.
MarketFirst's approach is to encourage clients to implement modules that address their immediate "source of pain." For Vantage that was the ability to do better market segmentation, and to use that information to conduct more sophisticated campaigns, and to ultimately realize better lead generation for both email and telephone sales.
Vantage began its MarketFirst rollout in the summer of 2001 to first manage its own email marketing programs. Within a week the company had the service up and running. The next step was to address how to use its Web site to not only market to customers, but also to survey customers. Vantage now uses the survey data to create more effective direct mail campaigns.
Within six months the MarketFirst program paid for itself and Vantage generated profits from its email campaigns, Emerick says. Today Vantage's email campaign costs are nearly nothing, and by using the program to test customers' interest in a particular campaign, sales numbers have increased. Today each campaign garners an average 35 bookings of trips costing between $1,500 and $4,000, he says.
Vantage's future plans include integrating multiple databases in its fund-raising division with marketing files created with MarketFirst, as well as providing local divisions the ability to customize their own campaigns.
"This will allow the company to do a lot of ad hoc research through Web surveys generated by someone in a division using gathered data to rapidly develop online forms using the preapproved templates we can develop in the MarketFirst program," Emerick says. "Ultimately that will result in even more tailored campaigns and more sales."
To target customers at the right time with the right information
Ongoing $1.1 million per month in bookings from outbound email campaigns alone
6 percent increase in overall revenue
$1 million in profit in the first six months of using the software
ROI six months ahead of schedule
Improved market segmentation, which enables Vantage to conduct more sophisticated campaigns and to improved its lead generation