Cultivating A Loyal Following
One strategy is to nurture client relationships
By Carol Ellison, VARBusiness
Two years ago, Andy Vabulas was pulled from a technology orientation at the Microsoft Fusion conference
by a co-worker muttering, "You've got to see this." Down the hall in a marketing session, a speaker was touting the merits of a common-sense customer relationship strategy based, literally, on "drips" of kindness.
James P. Cecil, a marketing specialist and father of a strategy called "nurture marketing," was presenting his approach as an easy-to-implement, low-entry-cost marketing solution focuses on the simple act of writing letters. Cecil focused his strategy on the notion that the company that keeps in touch with a client with quality communications is the company that will win that customer's loyalty for life.
The approach was just what Vabulas, founder and president of Norcross, Ga.-based IBIS Inc., a Microsoft Corp. and Great Plains Software Inc. solution provider that Internet-enables small and midsize businesses, was looking for. "We do the infrastructure work, messaging, front office, financials," says Vabulas. But within its own corporate structure, the company lacked a single, concerted marketing strategy.
"We had a sales strategy, but we had no formal process for demand generation and no brand awareness," says Vabulas.
Nurturing Clients
Nurture marketing builds on the notion that if you don't have a client's permission to pitch business its way, you'll never capture its attention. Nurture techniques focus on what it takes to earn that permission. Cecil, who discusses his strategies at Solution Provider University (www.solutionprovideru.com) this week, says the basic premise is keeping in touch with the right people at a meaningful level and on a regular basis. Cecil refers to this as the drip-irrigation approach. "All communications that touch your clients or your sales channel are going to be either nurturing, toxic or a waste of money," he says. "You'll either make them happy, irritate them or leave them wondering why you bothered."
Vabulas came away from the Fusion Conference with ideas about how to start his own nurture program. "It helped us identify who we were targeting and what we were trying to accomplish. We modified his letter campaign to suit our needs. It was like a just-add-water kit to get started" says Vabulas.
"Cecil's whole theory is that if you have a product for a particular type of client, that client is not going to buy just because you call up and say, 'Hey, are you ready to buy?' You have to identify their needs and stay in touch using the drip-market approach to build up what I call an 'intellectual bank account.'"
IBIS' letters were accompanied by promotional gift boxes aimed at capturing and holding executives' attention,another technique in Cecil's drip-irrigation approach. For instance, IBIS included a Guatemalan "worry doll" reputed to make worries go away if you put one under your pillow at night. In the accompanying letter, IBIS urged the executive recipient to "talk to us about your infrastructure and e-mail us to take those worries away from you because that's what we do."
What began with a $500 investment to launch that initial mail campaign has grown to a $50,000 investment in this year's marketing effort, as IBIS takes the strategy to the next level: custom electronic mailings targeted demographically to key accounts. Targeting CEOs is key, says Vabulas, "because they're the ones who write the checks."
Vabulas is confident the results justify the 100-fold increase in marketing expenses. IBIS expects to achieve more than $8 million in sales this year,a 25 percent to 35 percent increase over 1999 that he credits directly to the marketing effort. "We know it works because we've got people calling us, and we're the only people in the deal," he says. "Executives now know who we are and they already trust us."
Nurturing Personnel
Eric Rabinowitz, president and founder of IHS Helpdesk Service, implemented a nurture campaign more than a decade ago. Since then, he has seen business grow from one client in 1989,Johnson & Johnson, where he placed about 10 temporary help-desk workers,to the more than 200 employees it staffs today.
Back then, says Rabinowitz, IHS, a subsidiary of New York-based CRM consultants Leveraged Technology Inc., was a start-up with "no marketing and no sales force at all; everything was done through personal relationships." Revenue stood at roughly $250,000. This year, IHS expects to top $15 million.
Nurture marketing proved so successful that Rabinowitz decided to apply it elsewhere. "It became an important tool in retaining our people," he says. With its professional team assigned to help desks on remote corporate premises, IHS was experiencing an annual turnover rate of some 300 percent. In 1996, the company hired a consultant to investigate the problem and found that its employees were identifying with the companies to which they were assigned,not with IHS.
IHS responded using Cecil's drip-irrigation approach, instituting a daily fax campaign that sent a single-page newsletter to every IHS employee at a remote work site. Called The Daily Helping, the newsletter included help-desk tips, contests, games and announcements about what was happening back at headquarters. The company also brought on a full-time employee advocate to implement another drip-irrigation technique: a structured telephone campaign of daily calls to employees to be sure things were going well.
While Rabinowitz describes the nurturing results as "magic," Cecil insists it's nothing so mysterious.
Adds Vabulas: "It's treating people the way you want to be treated,so that your clients say, 'This is the kind of company I want to do business with.'"