Getting sales leads without losing the battle on costs

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Case study: AutomationDirect’s B2B sales lead generation strategy

Automationdirect.com had taken a unique approach to selling its goods, and because it has no direct sales force and no network of distributors, the company could sell at about half the prices of its competitors.

Trouble was, its marketing strategies were a little narrow. The Cumming, Georgia-based company, which supplies industrial automation products to a broad range of manufacturers, was relying almost exclusively on trade-publication ads to reach customers. When interested potential customers called for more information, they were sent a catalog. That was it.

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For a while, that approach worked fine, though the company’s lead-to-customer conversion rate remained static.

Three years ago, Automationdirect started to distribute products made by other companies, and its expansion into new market areas provided a basic challenge: Get the customers to notice. That, plus the fact that most of Automationdirect’s customers were small and medium-sized operations who were getting overlooked by other suppliers, made a new approach to marketing almost critical.

“After five years of advertising in the top trade magazines, you realize you may have reached a saturation point with those readers, and there might be a lot of your target base that don’t read those magazines,” said Joan Welty, director of marketing communications at Automationdirect.

The company brought in Mac McIntosh to help it develop several new methods for generating leads, develop those into customers and focus on other, smarter ways to market its products.

One thing the company didn’t want to do: Add cost, or layers of labor. After all, Automationdirect’s basic business model is about efficiency, and making processes easy to automate. That’s true not just for its products’ mission, but its internal mantra as well.

“We’d rather spend more money on equipment than just bring in more bodies,” said Welty. For example, the company needed to add more direct mail to its marketing efforts, but wanted to do so with a lot of automated mailings.

McIntosh quickly realized the challenge, and offered a list of ideas that could generate fresh business, and expand existing accounts without forcing the company to abandon its direct-to-customer approach, according to Welty.

“It really helped to have him come in and describe how [other] people had done some of these things, like direct mail,” she said. “It helped us focus on some of the areas that would work for us, in a way that would stay within our processes and keep our costs down.”

It also helped, said Welty, that McIntosh could show how alternative mailings and scheduled reminders about new products could meet a customer’s needs better than by simply sending a catalog once a year.

For example, in Automationdirect.com’s situation most leads don’t follow up with an order within the first six months of making an inquiry.

“If we didn’t remind them we were there, they could forget about us, and they’d end up buying from someone else,” said Welty.

Thus, the company started sending out postcards to follow up with leads, and now the lead-to-customer conversion rate has increased 33 percent.

Boosting existing customer orders was another challenge in which McIntosh suggested some fresh ideas.

Existing customers are now tracked for their product preferences and are regularly reminded about new products that might interest them. Also, they receive quarterly communications, newsletters and free samples of new products. Not only did the moves boost sales, but they “jump-started product sales that would’ve otherwise had to wait for new catalogs to get promoted,” said Welty.

With those processes in place, McIntosh has followed up with a few more visits to the company, each time making further suggestions. For example, a recent visit focused on using email as another way to contact prospects and customers, and exploring ways to boost results from the company’s trade advertising.

His visits, said Welty, serve as helpful checkups for Automationdirect’s marketing efforts.

“Automationdirect.com is a great company to work with.” Says McIntosh. “Joan and her team take the marketing strategies and tactics we develop and run with them. As a result they’ve significantly increased their company’s conversion of prospects to customers, and increased sales from existing customers. They’ve also saved money in many areas which they have re-invested in additional marketing, boosting results even further.

“We show Mac what we’ve done, see what he thinks, and we generate more ideas,” she said. “We’re almost looking at him now as a kind of an addition to our marketing team. Every year now, we’re in the habit of setting new goals for the year, and getting Mac in here to toss those around.”

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