Direct recently talked with Bill Mirbach, vice president of direct marketing for business and financial management software developer Intuit. About 70% of the Mountain View, CA-based company’s sales are through direct channels, with 30-40% of the company’s $1.35 million in annual revenues generated online. Intuit maintains a housefile of over 20 million names, many of which are small businesses in vertical markets like real estate, construction and the non-profit sector. Mirbach discussed how the current state of the economy has affected the software firm and how Intuit interacts with its diverse customer base. For more of this conversation, see the May 15 issue of Direct.
DIRECT: What impact has the economic downturn had on Intuit’s business?
MIRBACH: It’s an interesting question. I’d have to say that we’d probably be doing better if the economy was booming. But we don’t react to the same cues as the rest of the world. In a good economy, about 800,000 new businesses start every year. And in a bad economy, about 800,000 new businesses start. In a bad year, the entrepreneur’s age tends to go up. In a good economy, there are younger people starting businesses out of optimism.
In a bad economy, the buyer is looking for value and willing to take a no name. In a good economy, everybody is rushing around so in some ways it’s harder for small businesses to find customers.
DIRECT: Who is a typical Intuit customer?
MIRBACH: I suppose you could find one for each of our categories. In small business, we sell to people who are below everybody else’s radar. A QuickBooks customer has between zero and five employees. There aren’t a lot of classic high tech companies that aim right there. Small business is in the eye of the beholder. If you go to a big bank and say ‘what’s a small business?’ they’ll say ‘oh, anything under $100 million’. To us, it’s really small.
DIRECT: Where do the bulk of the company’s promotional dollars go?
MIRBACH: We support retail to the extent we can. The rest goes into activities aimed at our housefile. We spend as much as we can in e-mail, but you reach an upper limit. We do so in a way consistent with users preferences, and we’re pretty careful about respecting their privacy and preferred methods of contact.
DIRECT: What kinds of e-mail promotions do you do? Anything customer relationship management related?
MIRBACH: Upgrades and cross sells. And we have some very successful newsletters. But just talking to somebody for the sake of talking to them, we don’t do. We like to give them information that’s useful or tell them about a product or service that will help them or maybe a little of both.
DIRECT: Are you a big believer in CRM?
MIRBACH: It depends by what you mean by CRM. We’re pretty heavily invested in improving the way we track and maintain our database and information about our customers. We have somewhere north of 4,000 people who wear headsets between sales, customer service and support. We try and give them as much information as we can about the people they’re talking with. That to me is CRM. We want to be able to give the right information about the right product at the right time every chance we get.
DIRECT: What is the lifetime value of a customer to Intuit?
MIRBACH: Twenty years ago, I wrote the upgrade for Quicken Version 1 to Version 2, and I meet people who responded to that. So there are Quicken users who have been using [the product] consistently. But we haven’t gone around and seen what the average lifespan of a customer is. My impression is that once we get a customer who likes what we do they stay with us.
DIRECT: Do you think a high tech audience is more savvy about marketing techniques?
MIRBACH: I don’t know if I could say that. The eternal verities still work, persuasive, hard-hitting, provocative copy that talks to directly to a user and answers the question ‘what’s in it for me’, in clear unequivocal terms with a real person on the other end who is signing the letter and is believable. All that’s the same stuff.
Some things that don’t work in high tech are the real cons. You don’t see a lot of big sweepstakes in high tech marketing. The user is younger and busier. They’re more willing to read pages and pages of detail on what the product is, but they’re less willing to get wrapped up with some shtick on the front of it.
You can’t con them, but it’s hard to con anybody anymore. The last people who thought they were more likely to win if they subscribed to a magazine, well, they got shut down. I don’t know where you can go for an easy mark anymore (laughs). I don’t think those exist.
Network
