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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. Royal Mail Group Ltd, registered in England and Wales, number 4138203, registered office 100 Victoria Embankment, London EC4Y 0HQ