HP’s Services Define The Company
The problem – compounded in business-to-business direct marketing by the high degree of job mobility and the fact that the end users and the buyers are often not the same people – is Judith Kincaid’s to overcome.
Ms. Kincaid is worldwide customer information manager for HP, the Palo Alto, Calif.based computer company that had $38.4 billion in sales last year and that last month announced its goal of jumping from the No. 3 PC maker to No. 1 by the year 2001.
Ms. Kincaid, a 19-year company veteran who oversaw the construction of the company’s U.S. marketing database when she was U.S. database marketing manager from 1990 to 1995, is now charged with building the company’s global database marketing capabilities and managing the quality of the information.
Getting to the end-user
In developing the company’s b-to-b database marketing programs, a constant challenge – and one faced by just about every high-tech direct marketer – is identifying who at a business is the end user of an HP product.
In consumer marketing, it is much easier to identify the individual who is using the products, says Ms. Kincaid, a member of the Direct Marketing Association’s Business-to-Business Council Operating Committee.
But in b-to-b marketing, the person who buys the product is often not the end user. And HP products are often sold through an indirect sales channel, further separating the company from its end users.
“We want to build a relationship with customers to upsell and cross-sell, but it is so hard to determine the actual customer. Trying to identify the name of the user is the biggest problem,” she says.
Some work, others don’t
Warranty cards are one traditional way to get customer names, but they work better for the consumer market. In a corporate environment, warranty cards often don’t get into the hands of end users, she says.
Other ways to get end-user names is to offer training programs and to offer newsletters with information and tips about using the products.
“A lot of b-to-b executives are very productivity-focused, so the best incentives are [tips about] how to do the job better, rather than giving away mouse pads,” Ms. Kincaid says.
Customers can also be identified through other points of contact – if they contact the call center or post-sale support personnel. For key corporate clients, HP conducts telemarketing to obtain customer names and other customer information, she says.
B-to-b executives often change jobs frequently, another threat to the quality of the information on the customer database.
In consumer marketing, “If a household moves you can go through [National Change of Address] and that information will be updated. In b-to-b, there is a minimal amount of NCOA,” she says.
HP has separate consumer and business databases, each with more than 7 million names. The business category makes up a larger portion of HP business, with five of HP’s seven product lines catering to it.
A database marketing veteran
Under Ms. Kincaid, HP began building its database in 1990.
With a bachelor’s degree in psychology and a master’s in industrial engineering from Stanford University, she says, her strength is in the statistical side of marketing.
Ms. Kincaid has been instrumental in HP’s database marketing for 10 years and has specialized in identifying the architecture and data standards needed to build a marketing database.
As U.S. database marketing manager for HP’s direct marketing organization, Ms. Kincaid supervised efforts to pull customer information from existing internal systems – sales, support, customer feedback, inquiries – into one knowledge base and link it to the company’s external sources of data.
When a business becomes an HP customer, it is assigned an identification number and every transaction and interaction is tracked.
The primary information now linked to the customer database is registration data (sometimes filed electronically via HP products equipped with modems), data that indicates how the customers use the products, their titles and departments, shipment data, some support data and some leasing data, Ms. Kincaid says.
As soon as a business receives its order, HP begins its welcoming program.
“We do telemarketing first to identify the person, send welcoming information, and begin an ongoing relationship-building program to describe what we offer as well as information on upgrades and accessories,” Ms. Kincaid says.
“It’s a way to begin a dialogue and have customers recognize that we are happy they are part of the HP family and give them the opportunity to ask questions and get response.”
That, she says, is an effective way to get initial customer information, but it is also to keep that data up to date. To do that, HP developed a program to validate the information in its databases.
“We created a personalized mailing of every name in the database for each product line and asked specific questions and gave customers an opportunity to say, ‘Here is my title and here is what I do,'” she says.
The program achieved a response rate in the high 30s, which is strong for a validation program that offered no incentives, Ms. Kincaid says.
Marketing efforts include upsell and cross-sell opportunities. HP calculates the support costs for a product; as a product ages, the cost is higher, and HP communicates that to the customer.
“We do upsells and cross-sells in that way. We do a program for a total replacement product and also an upgrade for an existing product,” she says.
B-to-b customers are likely to replace lower-end products, such as printers. For big computers, customers are more likely to buy upgrades for the existing product, Ms. Kincaid says.
Onto the Web
The Internet has been a source of information for getting to know customers, and has been a strong source of leads. HP is planning to offer online ordering at http://www.hp.com in the near future.
“Electronic commerce will have a big impact on the Web and on what information we collect and how we collect it,” Ms. Kincaid says. “Privacy is a big deal on the Internet. We manage customer information country-by-country. There are different privacy laws in different countries. The Web means customers surf from all over in the world and as our database becomes more global there are major implications for privacy.”
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