I-Impact Case Study: Red Gorilla

Case Study: Red Gorilla

Top Banana: How Red Gorilla Obtains Chest-Beating Returns from its Marketing Dollars

As with any dot.com, Red Gorilla’s marketing expenditures take the single largest bite out of its budget. Here’s how I-Impact’s MarketDrive solution enables Red Gorilla to make optimal use of its marketing resources to boost net profits.

Red Gorilla, the Web’s first application syndication company <www.redgorilla.com>, is in the business of building private applications for deployment on other people’s Web sites. Application syndication revolves around customer acquisition and conversion. How effectively Red Gorilla manages its marketing programs makes all the difference in its success.

"Once we’ve built a great, intuitive and highly-scalable, application, our challenge is to determine the most efficient way to provide it to interested consumers and convert them from inquiries or free users into paying customers," says John Witchel, Red Gorilla’s CEO. "To this end, we work in partnership with the properties that deploy our applications and contribute marketing dollars to help them attract and convert users."

In order to focus funds strategically (on partners and activities that yield the highest conversion and adoption rates), Red Gorilla employs I-Impact’s MarketDrive decision support software. Developed to provide visibility into the economics and success drivers of Web-based businesses, MarketDrive exerted an immediately positive effect on Red Gorilla’s profitability—an effect that continues to grow over time.

"We expect our net profit to be 5 to 7 percent higher with MarketDrive."

"Both the immediacy and level of detail MarketDrive provides has made a huge difference in our ability to direct the company over a long period of time," says Witchel.

"According to our metrics, we expect our net profit to be five to seven percent higher than it otherwise would, had we not discovered MarketDrive."

Time for business intelligence
Red Gorilla’s first application, Gorilla Time™, provides Web-based time and expense tracking for professional service firms, independent consultants, freelancers, and moonlighters who need a simple, fast billing solution that doesn't require expensive software and constant upgrades. Unlike most financial management packages, Gorilla Time enables users to simply enter time and expenses using all three mobile platforms - Web, Palm™ and cell phone. A web browser and computer are all you need to track time and expenses, create sophisticated reports, and produce professional invoices (that can be e-mailed, faxed, or snail mailed).

Syndicated across numerous business sites on the Web, Gorilla Time is a free service. Red Gorilla spends both soft and hard marketing dollars to help partner sites run online banner ads, buy off-line media and more, to promote their time-tracking capabilities. This is all for the purpose of enabling partners to acquire more customers and to eventually offer them access to premium paid services, such as wireless access and premium invoicing services.

"To spend money in the most pragmatic manner possible, we need to understand what kind of customers were acquired via a particular partner and marketing program, and whether we are getting good adoption and conversion rates," explains John Witchel. "MarketDrive has been key in helping us determine the most effective allocation of marketing dollars."

"MarketDrive lets us drill down, on the fly, right in the middle of a meeting where we are discussing traffic or conversion rates. This makes our marketing and product roadmap decisions much more intelligent."

Optimized marketing expenditures
MarketDrive taps into various data sources to gather customer-related and marketing-related information. It then enables marketing analysts and top management to attack this information using a variety of business intelligence techniques—from OLAP drill-downs to data mining and modeling to predictive analyses.

Says Witchel; "MarketDrive’s primary benefit has been the granularity of data it provides. While some products can give very broad, high-level information about the history of a Web site, MarketDrive lets us drill down, on the fly, into near-real time data, right in the middle of a meeting where we are discussing traffic or conversion rates. This makes our meetings more meaningful and our marketing decisions much more intelligent."

Armed with this kind of real-time intelligence, Red Gorilla is able to better allocate resources—whether to partner A or B, whether it is to direct mail or banner ads, and so on.

Strategic weapon
In addition to enhancing the effectiveness of Red Gorilla’s marketing investments, MarketDrive has also found a home in the executive suite, where it is used for strategic decision-making for helping to fine-tune Red Gorilla’s product roadmap.

For example, one unexpected discovery was how many non-U.S. consumers were using Gorilla Time. This revelation changed Red Gorilla’s product roadmap, which had been based on the assumption that only American’s would adopt the product and that it was only necessary to support American currency.

Claims Witchel, "Suddenly we uncovered enormous new market opportunities outside the U.S. and began examining supporting specific foreign currencies in the next release. What’s more, because MarketDrive provides us with considerable detail, it will help us fine-tune our marketing efforts on a country-by-country basis so we can approach England differently than we approach Germany or France."

"Because MarketDrive lets you drill down to any level of granularity, the data becomes increasingly enriched over time. In contrast, many other decision report products merely give you the information they’ve got, and that’s it."

Deepening value
The more Red Gorilla employs MarketDrive, the more value it derives from the software, according to Witchel.

"The first set of reports came in about a week after we deployed the software and already those reports had meaning, so we dove in deeper" he acknowledges. "Because MarketDrive lets you drill down to any level of granularity, the data becomes increasingly enriched over time. This has heightened the value of the software. In contrast, many other decision report type products merely give you the information they’ve got, and that’s it."

Net to the bottom line
Like almost all dot.coms, Red Gorilla spends a large portion of its budget on marketing. With MarketDrive, it is able to deploy those resources in such a way that they now have a dramatic net effect to the bottom line.

Concludes Witchel, "Effective management of sales and marketing has an enormous impact on my company. Any tool that helps to do that is inherently a good thing. Because MarketDrive has been so successful at doing that, it is regarded as a very good thing."