As technologies mature, many established high-tech firms are looking to their installed customer base as an ongoing source of incremental revenue. In addition to upgrade programs, more and more companies are embarking on aggressive strategies to increase revenue from maintenance, support and subscription programs.

UniDirect Outsource Services in Scotts Valley, California (in the hills above Silicon Valley) sees this trend as big business. A $50 million outsource telesales and database marketer, UniDirect is partnering with some of the industry's biggest names, including Sun, SCO and NCD, to provide sales and marketing support dedicated solely to installed base programs. Direct marketing plays a key role in their success.

SCO (The Santa Cruz Operation), a leading developer of open systems software for Intel-based PCs, uses UniDirect Outsource Services to sell support, maintenance and upgrades to its installed base of 500,000 customers and resellers. UniDirect provides a full-time staff of telesales professionals, maintains a sophisticated database of SCO customers, and has implemented an aggressive direct marketing strategy that incorporates outbound telesales, direct mail, fax and e-mail.

UniDirect mails renewal notices every month to SCO customers whose maintenance and support contracts are about to expire. Recently, UniDirect asked Connect Direct, their direct marketing agency, to design and produce a new package to be mailed to customers whose agreements are due to expire in less than 30 days. The simple 3-color letter package featured a window envelope (with copy that reads "SCO Customer Alert -- Inside: Important Information About Your SCO License"), a 2-page cover letter, an order form and postage-paid business reply envelope.

Response from the initial month's mailing was a whopping 22%. But the process doesn't end there. UniDirect is implementing a multimedia (mail, fax, e-mail), multi-contact process that will launch automatically every month, sending out a series of targeted messages to SCO customers depending on contract type and renewal date.

Not that UniDirect sales reps wait for SCO customers to call them. The telesales staff are compensated not just on closed business, but on the number of qualified quotes "in the pipeline," plus the dollar value of those quotes. Every day, the UniDirect call center is a beehive of telephone chatter, interrupted only by loud peals from a large brass bell, rung with wild abandon when a rep closes a deal.

This reliance on systematic, integrated direct marketing is paying dividends. "The industry average for support and maintenance renewal rates is around 60%," says Tina Anthony, Marketing Manager at UniDirect. "Our goal is to increase that to over 90%."

Here are some basic guidelines to keep in mind for your next maintenance, support or license renewal campaign, borrowed from UniDirect's strategy:

Don't rely on the mail

Broadcast e-mail and fax may be viewed as inappropriate for soliciting new business, but they can be effective strategies for communicating time-sensitive information to a customer base. Just respect the relationship and compose your message in a manner that reflects urgency, without the heavy promotional flavor that dooms a lot of fax and e-mail to the trash. And give the customer a simple means of deleting their name from your broadcast list if they prefer not to be contacted via either method.

Direct mail will probably be your most successful medium regardless, but with their instant delivery and low production cost, fax and e-mail are good candidates to be part of any renewal strategy.

Hit them more than once

Technology marketers could take a lesson or two from the publishing industry. When was the last time you received just one reminder about the impending expiration of your magazine subscription? (And that's for a $16 investment!)

Not including phone calls, UniDirect contacts their renewal prospects as many as six times during a twelve-month period. Contacting a maintenance customer six months before the contract expires may not be too early if a) you avoid a hard sell and b) you deliver information that reinforces the decision they made earlier in the year. Maybe it's a good time to offer to extend their contract for one or two additional years (at appropriate savings). Or cross-sell complementary products or services.

Don't stop when the contract expires. Part of UniDirect's program is communication after the expiration date, including a grace period where appropriate to bring the customer back "into the fold."

Know your customers

If the list is the most important ingredient in any direct marketing program, it surely applies to installed base marketing. Good data is the cornerstone of any successful renewal campaign. Use state-of-the-art systems to track the information, and maintain data integrity at all costs.

UniDirect uses web site profiling, list purchases, database consolidations, and proactive telemarketing to constantly update their customer information. However you can, collect multiple contacts (purchasing, decision-making, technical), fax numbers, e-mail addresses, and any other information that you can leverage in your campaigns. The more information you have, the more targeted (and therefore, the more effective) your program will be.