B-to-B DataBase in Brasil ... a 14 year case
Some of us today do not yet have an active, working database of our clients. Intral, S.A., began theirs 14 years ago. Initially in a couple of states...eventually it grew country wide. In Brasil.
Sure, the decade of the '90s found the Brasil marketplace heating up for Direct Marketers. The Brasilian Direct Marketing Association was formed and active. Business-to-Business and Consumer marketers by the score flocked to Congresses through-out the Americas.
Inflation went away. Well, for all practical purposes inflation went away. When 3000% gets reduced to under 20% the impact on the marketplace is tremendous. And Direct Marketing as a discipline, and DataBase Marketing as an arm to make it work, were "discovered".
Intral discovered DataBase Marketing
a decade and a half ago
Here's the story. The company is based in the southern most State of Brasil Rio Grande do Sul. The "Cowboy part of South America"...where, just as in close by Uruguay and Argentina, the local men are called "Gauchos".
Intral products are high quality electrical "widgets", used by electricians working with large discharge lamps of sodium, fluorescent and mercury.
The competition is strong...mostly international companies with recognizable names from the Netherlands, Japan, Mexico and the USA. Names like Philips, Silvania, Helfont, Eletromar, Peterco and others. The Brasilian competition are small players in a big field.
This description fit Intral, too. Small, in a big field. Yes, they were and are strong in their southern state. At home. Yet, 60% of the Brasilian market is in Sao Paulo and Rio de Janeiro...1000 miles away. Even in their own country, Intral was not a big player.
They decided to reach out. To grow. And to begin to build a DataBase of their customers. The start was to be in Rio. Big, yet, not too big. Intral had a branch in Rio...responsible for 9-10% of the corporate sales. Not bad...certainly nothing great.
The sales area for the Rio Branch covered the states of Espirito Santo, Rio de Janeiro, and the eastern part of Minas Gerais. The geography was huge in one of the largest countries on earth.
New ideas, old gear
Computers were another challenge. If you're going to build a useful DataBase it is best done with a friendly computer system. Intral did not have a friendly computer system!
Personal computers were not available (the Brasilian government imposed import restrictions, and none were being manufactured in Brasil at the time). The corporate office had a huge Labo, assembled in Brasil, using German technology.
The long and short of all this is the headquarters and branches did not talk to each other. And it might not have mattered much anyway, as their was no software. Everything had to be developed from scratch.
Still, objectives were set and a plan was developed.
The goal for the Rio branch was to double their marketshare within 4 years. Move it to 20%. With so much competition prices are competitive. Not much chance with pricing to increase sales or share. Certainly not profit.
On the flip side, manufacturing was able to fulfill almost any order immediately. The flow from manufacturing to the branch distribution network to the end user was quick. The outside sales team knew this and used this obvious benefit in their new business presentations.
Quality and reputation were not under dispute. The problem was getting in to places where Intral was not the preferred product. The old time competition had built a relationship with 90% of the market, and was not about to give it up. At least not without a fight.
Reaching out to lots of small clients
Most of the prospects were small or independent contractors. Regulation in Brasil for such crafts is "loose" meaning it does not take much to go into business. And standards are weak. This is the good news! The bad news is it is almost impossible to find end users. It is very difficult to pinpoint the target audience by name.
Broad based media is not the answer. Radio, television, newspapers reach too far, and at too high a cost. So, the idea to be different, to "innovate" was obvious.
What was, and is still today, the answer, is equally obvious. You work with the distributors 1:1. You spend time in the stores and distribution centers and warehouses. You talk with the owners, managers and sales people. You meet their customers.
Soon you learn the key end user is an electrician. This is the person who buys and installs the product. Intral products are not the type that appeal to "do it yourselfers". So, it is the electrician who is the audience for Intral. He is the one who will make the buying decision. He will decide the brand.
And he will do this based on the knowledge of his local supplier. The construction or electrical supply store or warehouse or center where he buys for use and re-sale. This means "the audience" for Intral are the owners, managers and sales people at the store, or wholesale, level. Names for these people can be obtained.
A select area within the Rio branch territory Minas Gerais was chosen as the place to begin the DataBase building process. In the beginning there was "total" ignorance of the Intral brand. The marketplace did not know...did not care ...what Intral had to offer.
The opening tactics were brilliant. Technical data sheets, product brochures and support literature, every so often a direct mail letter or telephone call, were aimed at the audience at the distribution level. Even birthday cards were included in the contact mix.
Four months into the initial program, Intral showed up in person. A technical engineer or two, a sales rep, and a marketing pro began a series of city-by-city lunch or dinner presentations in local restaurants.
This staged special event was designed to convince the "sellers" that Intral had what their buyers needed. The handouts included all the expected. "Churrasco" a Brasilian barbecue, was the meal.
Invitations to those in the distribution process, plus as many electricians as could be contacted, were issued. Each session began with a short video on the company. Followed by explanations of who Intral is and what they bring to the marketplace. Each attendee was given an Advertising Specialty as a departing gift.
Building on repetition
Every 6 months the process is repeated for all the newcomers. And as a reminder to those who have not yet bought into the Intral product category. This is important, as it is the distributor who has the most information on the total product line. And, he still very much influences the buying decision.
Also, every 6 months there is an evaluation of each market. Those working with Intral are separated from those who are not. The DataBase is segmented according to action. As all customers are not created equal.
If a contact has not bought within 2 years, they are moved to another level and asked if they'd like to remain on the contact list.
Today, 14 years after the launch, the results remain incredible. In Minas Gerais Intral owns over 90% of the market. From a "nobody" to a monopoly position. They have such a lock on the marketplace, it is virtually impossible for any competitor to make a stand.
Intral enjoys success throughout Brasil. Even with todays more sophisticated (yet simple!) process, results similar to those in Minas Gerais are experienced everywhere.
When the true fruits of success are recognized by your peers and competitors, you know you have done well. Less than a year ago in the capital city of Minas Gerais an Electrical Exposition was held. Many from Intral attended several were on the program. Intral is now recognized as a leading player in their specialized niche.
People make success
So far I have not talked about the people involved. And of course, without people, nothing good happens.
The key player in this transition from a manufacturer to a marketer is Marcus D'Arrigo, Executive Vice-President, Marketing. Marcus was involved with the changes from day one...way back 14 years ago. I met Marcus at a DataBase Marketing congress in Sao Paulo...and immediately asked him for permission to share his story.
Sure, Marcus had lots of help. Technical Engineer Dalcir Tauifer and Sales Representative Edenir Roque Coelho were each important to the process. The owners/management of Intral offered support beyond words. Time and money were dedicated to establishing a DataBase Marketing system.
Today at Intral, DataBase is SOP
Standard Operating Procedure.