Case Study: Pinpoint aim brings success for Perlico
By John Murray Brown
Published: November 24 2006 02:00 | Last updated: November 24 2006 02:00
In Perlico's Dublin headquarters, top executives of the telecoms company are assessing the impact of their latest marketing campaign - on a big computer screen in real time.
As the advert promoting its latest broadband offering goes out on national television, the company's grandly named "comms room" captures the moment the first potential customer's call comes in at one of its two call centres in Donegal and Dingle in county Kerry.
When telesales staff start to input the caller's inquiry, a separate software programme begins to profile the caller as a potential customer. As the pace of inquiries increases, the directors in Dublin are also able to see which of the call centres - and which operators - are doing the best job of converting calls into customers, and then redirect the business accordingly.
"These are all potential customers for us. It's very important we're making the most effective use of them. These are the gold for our business," says Iain MacDonald, the chief executive.
Perlico's innovations in sales show how the disciplined use of technology can help even the smallest companies to reach and retain customers.
It backs up the company's marketing mantra - that it only uses campaigns whose results can be properly measured - with the claim that it can evaluate the impact of every euro spent.
The company says it can identify where a caller saw an advertisement - whether it is a TV advert at a particular time of day, on a particular channel, or a newspaper ad, an insert or a piece of direct mail - by the use of freephone telephone numbers, a technique first used by the PC maker Dell in its direct marketing approach.
Perlico not only borrowed heavily from the direct sales model perfected by Dell, it even poached the core members of its marketing team from Dell's Irish-based European sales headquarters.
It was trial and error before Perlico changed its approach in 2005. "Some of our first campaigns weredisasters, where it cost us thousands to acquire one customer. But that is what our competitors keep on doing and they do not even know it is costing them thousands of euros," says Mr MacDonald.
He says Perlico can predict to within 5 per cent the number of customers that a campaign will generate.
"When we spend €1m on advertising we're not guessing about how many customers we are going to get. We have precedent. We know that if we use these marketing channels we will get this amount of a response."
Perlico is currently spending €1m ($1.3m) a month, making it one of the biggest media spenders in Ireland. With 90,000 customers, it is the second-largest broadband provider after Eircom, the former state company, and is adding 10,000 more a month - 90 per cent of them defectors from Eircom rather than first-time users.
Ireland, in spite of the country's technology-savvy business image, has been poorly served by the broadband industry: just 8 per cent of the country's homes are signed up, compared with 15-20 per cent across the European Union and 30-40 per cent in London.
Eircom currently has an 80 per cent market share, but it is forbidden by the country's regulator from undercutting prices. Perlico has no such constraint.
Moreover, any customer that Eircom loses to a competitor cannot be contacted for a three-month period.
That said, not all the new arrivals are making money. Smart, an Aim-listed broadband rival, was sold to its largest shareholder for €1 last month, after Eircom cut off its fixed-line customers over an unpaid debt. Smart had spent millions on big ticket marketing, including sponsoring the Rose of Tralee beauty contest, with few results.
Perlico's costed approach to marketing could not be more different. "We will sometimes tell TV stations we will market on their channel, if they put our ads on for free for a period of a week. We'll then look at how many calls we get and then we can work out how much we will pay them," says Mr MacDonald.
He says there are areas of Dublin where Perlico tends to make a loss on its customers, because many fail to pay their bills and eventually switch to a competitor, which then ends up resorting to debt collectors.
Perlico's ideal customer is typically middle-aged and middle class, unlikely to move house, and has teenage children who use the internet a lot. By deploying the company's analytical skills, Mr MacDonald says he knows exactly where to find that customer.
"We have identified that certain parts of Ireland, certain streets are much more attractive than others. We are only targeting people who we want to buy our products, and we know exactly how much we are getting them for."
Copyright The Financial Times Limited 2006
Comments