Dell Corporation’s, VP of marketing ' an MIT engineer ' was familiar with the Taguchi method as applied to manufacturing. He correctly assumed that it could be applied to advertising and marketing to reduce the time to test ads and to substantially increase response rate and sales. Having at least doubled response rates in every case that he has applied his methodology, Dr. James Kowalick has emerged as the Gold Standard for implementing the Taguchi method to ad optimization. In June of 2004, Dell Corporation hired Dr. Kowalick to apply his unique methodology to Dell’s Employee Purchase Program (EPP) email campaigns. The results of this project are now changing advertising.
While Dr. Kowalick typically works with client’s on direct mail campaigns, the Dell EPP was an email advertising campaign targeted to 450,000 individuals: 250,000 employees of companies that use Dell computers, 150,000 government employees that use Dell computers at work and 50,000 professors at schools or universities that also use Dell computers at work. The aim of Dell’s EPP email campaigns is to sell computers, software and peripherals to these individuals for their personal use leveraging the fact that they are already familiar with the brand because they use Dell computers at work. As an enticing benefit, Dell’s EPP members enjoy discounts of up to 12% and special promotions like free shipping, bundles, and others.
After working with Kowalick, Inc. from May to August of 2004, Dell achieved the following results:
| |Population |Frequency |Open Rate |Sales |
|BEFORE |450,000 |2 x month |3.1% |$8,900,000 |
|AFTER |450,000 |2 x month |16.4%* |$63,100,000** |
(*) Open Rate Increase = 5.3...