Monday, May 12, 2008

Case Study: Verizon Targets Small Businesses with Direct Mail

It's Monday and that means it's time to focus on a marketing case study. This week we've chosen Verizon and their successful direct marketing program that targeted small businesses. The full case study can be found here, published by Deliver Magazine. We liked this one because it goes back to the basics of using traditional direct marketing tactics, such as significant testing, a creative package that will get opened and proper data targeting.

Pushing the Envelope - Verizon Reaches Out to Small Businesses

It’s no secret that big companies often don’t do well when making overtures to small businesses. In many instances, their outreach efforts fail not because big businesses don’t have anything worthwhile to offer but because major marketers aren’t very good at holding the attention of small entrepreneurs.

In fall 2006, the telecom giant began sending out a test mailing of direct mail pieces that bore a striking resemblance to an all-too-familiar office-supply staple — the interoffice envelope. Verizon targeted 11,851 small businesses with the envelopes, which featured the words “INTERNET NOTICE” stripped across the top and the crossed-out names of fictitious previous recipients. A final “name” — “Cable User” — was unobscured, a cue for business owners to “cross out” their cable provider and switch to a high-speed digital subscriber line (DSL) provided by Verizon.

The envelope was accompanied by a cover letter — with the heading “For Speed, For Features, For Price … Verizon Business DSL” — that was signed by Verizon small business marketing director Marquita Carter.

In an interview, Carter explains that Verizon officials settled on the three-month “Interoffice Envelope” campaign after tests suggested its simple familiarity stood a strong chance of cutting through the promotional clutter that confronts many small businesses.

“The iconic look of an interoffice envelope — who’s going to just toss that out?” asks Carter rhetorically. “We tested this approach and got some really strong results. It bettered our control number by 30 percent.

Carter says a test is part of every direct mail campaign at Verizon. The company sends out two or more different pieces of direct mail and measures which one generates the most calls and conversions to sales. The responses are benchmarked against the control campaign, which is the best campaign from the last direct mail cycle.

“We put a lot of time, energy and research into understanding what makes them (small businesses) tick, what keeps owners up at night and what are the approaches that are really going to get their attention,” explains Carter. “We’re always testing and trying to find ways using direct mail to get the attention of a small business owner.”

Such research is what helped Verizon’s business marketing team decide to target a select group of businesses with the Interoffice Envelope campaign. Rather than take a scattershot approach, Verizon targeted small businesses with particular connectivity needs, promoting services like its rapid FiOS Internet connection to companies that handle matters such as engineering designs, financial documents, X-rays, legal files and data backups.

“Our focus is on what we consider a sweet spot — small businesses with fewer than 10 employees, businesses that really form the backbone of the U.S. economy, businesses that really have a need for high-speed Internet,” says Carter.

And while Carter says that Verizon uses a variety of media to get the attention of small business owners, direct mail will remain a constant in its messaging efforts. “It may vary from quarter to quarter, but we always have a constant stream of direct mail going to small businesses,” Carter notes. “It’s one of the most efficient ways to reach them.”

There you have it--the classic direct mail success story!

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