Download Building sales through DM

Case study: November 2009
Customer
Kalimex
Needs
Compete in a market dominated by automotive giants
with marketing budgets to match
Solution
Kalimex uses highly targeted and cost-effective direct
marketing campaigns to increase product sales by 25%
Building sales
through DM
When automotive products supplier Kalimex wanted to accelerate its
market presence it used skilful direct marketing to drive sales.
The background
For any small business competing
against big companies with huge
marketing budgets the question is,
how do you get your share of the
action? The answer is highly targeted
direct marketing campaigns that cost
little to produce.
Kalimex distributes and sells a range
of automotive products used by the
car repair trade and retail customers.
This is a market dominated by big
players like Unipart and Holts, yet
Kalimex has achieved some ambitious
sales targets with some of its products
now asked for by name. It has gone
from selling a single epoxy putty
called QuikSteel in the 1990s to a
dozen products and an annual
turnover of £1m. This has been
achieved through skilful direct
marketing tactics on a mere £40k
budget.
Communicate the benefits
Kalimex managing director, Mike
Schlup, says, ‘Aside from the big
stockists, most of our 2-3,000
customers are independents who buy
relatively small amounts. It could be a
father and son and a workshop or
someone with just a few shops.
‘Whoever it is, the challenge is to
communicate the features and
benefits of one of our products, over
and beyond a sales rep turning up to
take an order. We cannot logistically
phone up each and every one of them
and they don’t really use email. If you
put a piece of paper in their hand they
will read it, which is why we went
down the direct marketing route.’
For Schlup it has to be a twin
strategy of retaining and nurturing
existing stockists while seeking new
customers. He has been working with
Dee Blick from The Marketing Gym,
who has helped him develop a costeffective marketing programme.
VIP mail
Schlup focuses his heaviest marketing
spend on the bigger stockists who are
likely to order more product. This he
calls ‘targeted VIP direct mail’ and
typically includes a goody box of
branded promotional items, sales kits
and product literature. ‘Over 90% of
Direct Mail
[...] is much
more costeffective than
relying on PR
Mike Schlup,
Kalimex
Advice on marketing
new products
and generating
sales, by Dee
Blick, fellow of the
Chartered Institute
of Marketing and
founder of The
Marketing Gym
1. Knowledge is power
Gather all the data you
have about who you want
to reach and why and build
your sales pitch around that.
these businesses turn into new
customers with this approach,’ he
says.
Schlup explains his strategy for
building new customers or sectors:
‘We may focus on a specific
geographic area where we identify the
key stockists. We qualify those
prospects, find the best point of
contact, send a mailer, often with a
keepsake like a pen and then follow
up with a phone call or visit.
‘When we recently launched K-Seal
HD, a permanent coolant leak repair,
we used a combination of targeted
direct mail combined with press
releases. We had a fantastic response
to this campaign. Our goal was to
launch the product with a monthly
sales target of 500 units. We’re
currently averaging 900 units a
month,’ says Schlup.
In order to keep Kalimex top of mind
Schlup regularly sends a newsletter to
the entire database, crammed with
product news and promotions,
marketing tips and a competition.
Competitions always draw a strong
response.
As a further example, QuikSteel is
soon to have an image makeover with
newly designed packaging. News of
this will go out in the newsletter, as a
mailshot and in a press release to
trade journalists and trade
advertising.
‘The mailer will have some form of
response mechanism to provide as
much incentive as possible to come
back and find out more about the rest
of our range,’ says Schlup.
Reaching people directly
‘With direct marketing you have
something going directly to the person
you want to talk to,’ says Schlup.
‘There is a much higher chance of
them picking it up. You are reaching
the person you want to read the
information and it is much more
cost-effective than relying on PR or
advertising in a trade magazine.
Direct marketing really works for us.’
And the company’s results show
how successful its marketing has
been. The Kalimex stockist base now
exceeds 2000 and annual product
sales have grown by a whopping 25%
year-on-year.
2. Four steps forward
Go for the power of four:
1. Put out a press release,
2. Do a mailshot, 3. Send a
product sampler or teaser
mailshot, 4. Follow up by
phone.
3. Big fish and small fry
Spend the most money on
the biggest fish: segment
prospects into big or
small and focus on them
accordingly.
4. Read all about it
Create a monthly newsletter
around the brand and any
new products and include
testimonials and case
studies.
5. Hurry now while stocks
last
Incorporate a response
mechanism linked to an
incentive to purchase. This
could be anything from a
free t-shirt to a sales kit….
Royal Mail, the Cruciform and the colour red are registered trademarks of Royal Mail Group Ltd. Kalimex case study © Royal Mail Group Ltd 2009. All rights reserved.
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