CASE STUDY OVERVIEW
The IBM Software Premier Club is a relationship direct marketing initiative targeted toward senior software decision makers and influencers in IBM’s largest accounts worldwide. The program regularly communicates with 21,000 members in 49 countries and in 13 languages. Members represent over 90% of IBM’s software revenue.
The Club keeps members informed and educated regarding the IBM Software Group’s strategies, brands and offerings. Central to its success is a robust preference strategy, creating highly personalized conversations around specific business issues.
The objectives of the IBM Software Premier Club include:
• Maximize revenue from IBM’s best software customers—grow revenue by 10% per year versus 2% annual growth for the overall customer base
• Maintain value-based relationships with IBM’s best software customers and increase loyalty
• Improve executives’ perception of IBM as a leader in software solutions by delivering the right message to the right customer at the right time.
In order to ensure that the IBM Software Premier Club was successful at achieving its objectives, IBM solicited input directly from potential Club members, so they conducted voice of customer (VOC) depth research. Following is the guidance IBM received, which included data from 32 countries. A significant question was, “What can IBM do to strengthen its relationships with you?” And, the results point to the importance of highly targeted and relevant communications based on specific customer interests.
Voice of the Customer input:
• Stop sending large volumes of untargeted communications.
• Be responsive to our complex and media-specific needs and preferences.
• Help us evaluate optimal solutions to critical business problems.
• Provide opportunities for participants to interact with each other.
The IBM Software Premier Club promised customers that it would be a single point of contact into IBM for anything they need. Members would be recognized for their value to IBM and receive special treatment. And, the program would deploy the appropriate IBM resources to assist customers in immediately addressing mission-critical opportunities.
To perform and respond at this level, IBM needed to understand each person’s preferences. So, they asked each customer to complete and update a comprehensive preference profile.
THE CUSTOMER PROFILE
The IBM Software Premier Club customer profile was broken into four components in order to map IBM’s unique regional services to relevant customer interests and preferred communication channels. The goal was to eliminate irrelevant communication noise so that relevant messages would be enthusiastically received by the recipient.
• Level 1: Regional. Support content was relevant to the customer’s physical location (e.g., the IBM services available locally).
• Level 2: Language. IBM’s goal was to support its global audience in its own language and dialect.
• Level 3: Areas of Interest. IBM created conversations with customers based on their specific areas of interest as well as pressing business issues.
• Level 4: Industry. IBM promoted discussions based not just on technological innovation, but how that innovation relates to an industry, a company and an individual’s job responsibilities.
STRATEGIES AND TACTICS
Armed with the customer profile information, communications are customized to the individual’s preferences and contain technology information, special events, webcasts, and special offers such as try and buy software. Product information is immediate and timely and communicated via the desired channel.
Additional communication offerings deployed in this multi-touch/multi-channel program include:
• Customized Web Page: Customers said they wanted access to the right information—fast. Thus, a customized web page was set up for each IBM Software Premier Club member built per the customer profile.
• Trend News: Research showed that there was strong demand from customers for IT-related information going beyond products to give business-oriented information, trends, strategies and solutions-based news.
• Customer-Focused Seminars & Events: For some customers and cultures, in-person contact is critical, so they are invited to local seminars and events that are of interest to them.
• Webcasts: For customers who are more time-sensitive, IBM offers webcasts. Content and subject matter is varied by individual preferences.
• Software Seed Program: The research also indicated that technical executives liked having access to early examples of leading edge technology before they recommended it to their companies. On the profile, customers indicated whether they wished to receive advanced copies of software and, if so, the type of products that were of interest.
• Web-based User Groups: Many customers wanted to be able to interact with peers at other companies.
IBM set up user groups aimed at three differentsegments: Technical influencers, IT managers, and IT executives. The spectrum of discussions ranged from purely technical to business-oriented applications of the technology.
Personalization is critical to breaking through the noise and achieving marketing success. By asking their customers what content they are interested in and through which channel they prefer to receive that content, IBM is able to personalize their communications to each customer. Now, each customer receives only the information (e.g. products, industry news, events) that they are interested in receiving and through their communication channel of preference (e.g. personal web site, email, direct mail, and phone).
In fact, the average number of communications that an IBM Software Premier Club receives has dropped dramatically since rolling out the preference management approach. And while the thought of cutting the average number of marketing communications causes most marketing professionals to assume qualified leads and revenue will decrease, the opposite is true.
The results speak for themselves:
• $310 million in incremental revenue
• 35% of members said they made purchases of IBMsoftware products they would not have otherwise considered
• 28% increase in opt-in membership while the opt-out rate is less than 1%
• Web traffic increase of 179% since the web site’s inception
• Average annual Click Through Rate is 19.7% worldwide versus single digits for other non-opt-in implementations
• 90% member satisfaction