Set Sale on The Net

Dec. 21, 2004
Winners in the race to generate new sales over the Internet will have dynamic, interactive sites with content tailored to individual users delivered on proprietary networks.
Digital Equipment Corp., Maynard, Mass., was one of the first companies to go online with a Web site, offering product information as early as 1993. Later DEC added shopping capability from an online catalog of systems and components. Today the DEC site is hit nearly one million times per day, and in 1996 the online store generated $210 million in revenues. While the DEC story is clearly one of Web success, most companies are still feeling their way, groping around in cyberspace. Even the consultants are having difficulty forecasting the future of Internet commerce, with predictions ranging from $66 billion to $95 billion for business-to-business Internet-generated sales by the turn of the century. Whatever the size of the pot of gold, to capture their share of the riches, companies will need to do much more than post static information and catalog pages. The initiatives of today's Internet-marketing trailblazers add value to customer relationships. Web strategies complement overall marketing plans. Sites are dynamic and interactive. Content is tailored by and for specific companies and individuals, and it's delivered via proprietary links. Intranets facilitate collaboration and global account management. Dealers and distributors are linked for timely order processing and business management. Web-visitor "click prints" are mined for market-revealing trends and product direction. One message is clear: Start with a business proposition, but do something. "If you don't learn to use it and adapt it early, when the Web breaks for your type of industry, you'll never be able to catch up if you haven't been investing, because it will move so fast," says Fred Fassman, general manager for global direct marketing, IBM Corp., White Plains, N.Y. Need some ideas? Here's how IBM and other leading-edge Internet marketers such as AMP Inc., Dow Chemical Co., Snap-on Inc., Hewlett-Packard Co. (HP), and Dell Computer Corp. are exploiting the Web in sales and marketing applications with rich, compelling sites and value-added strategies. Private parts At IBM, the Internet direct-marketing strategy is built around three objectives: extending reach into new markets, penetrating existing markets, and saturation of current customers. To meet these objectives, IBM is creating tailored proprietary intranet sites for customer groups and major accounts, so they can do business with IBM via a private channel. The strategy is to build a site template with standardized organization, navigation, security, and underlying technology that can be applied across the various types of customers. "We build a model of each kind of site, and then replicate it," says Fassman. Once a model is established, the look of the particular site is customized with appropriate logos and a custom catalog of specific devices or specially configured systems for the account, including contract-negotiated prices. A case in point is a proprietary intranet site established for the Animal & Plant Health inspection service of the Federal Dept. of Agriculture, which awarded IBM contracts for PCs, workstations, and mid-range computers. The site provides 77,000 agency buyers with online transaction capability, including browsing and information collection through automatic order fulfillment. While winning a government contract gives IBM the right to do business, it still must convince buyers to buy, so the site provides a venue for promotions and new-product introductions as well, according to Fassman. Financial transactions are by normal paper billing against contract, and while other forms of reconciliation may be used in the future, "it really depends on the customer's accounts-payable system," says Fassman. Using the proprietary intranet, the cost of doing business for both IBM and the buyers has been significantly reduced, now running at about 5% of sales. "Before the site, the order cycle in this segment was six weeks--now it's 14 days," says Fassman. "There was an error rate of 14%, which is now down to 2%. And while we used to spend $60,000 per year on catalogs for this group, now it is zero, which alone is enough to maintain the site." The site currently averages 13,400 requests per week. The economics of the template concept are vividly borne out as IBM has now completed 17 proprietary sites. "The first site cost $500,000," says Fassman. "By the tenth [one] we were down to 25% of the cost, and by No. 100 it will be 6%. So now we've created a competitive advantage for IBM by laying out technical and business Internet models, and mass-customizing Web sites that provide value to customers. We have also asked our advertising agency to organize themselves around this business model so they can take the creative side and gain the same kind of economic advantage for themselves and us." Austin-based Dell is another Web vendor that uses private intranet connections for major accounts, offering preconfigured bundles at negotiated prices. Combined with consumer purchases on its public Web catalog, the online "Dell Store" generates $1 million in revenues per day. Do it yourself Catering to individuals is the basic objective of a unique Internet initiative at Dow in Midland, Mich., called "My desktop at Dow." Here an authenticated user enters the corporate site and creates a desktop of his own, a site within a site. The user--a customer, strategic stakeholder, or member of the media--is assigned his own customized home page, from which he can access, through hypertext links, documents and addresses of interest to him, be they product, financial, or company-news related. Through his personal site a user can also create direct e-mail links to the persons at Dow he is most likely to contact, such as purchasing, sales, or technical experts. "The value the Internet represents has surpassed straight information sharing, and is now in the realm of one-to-one relationship marketing," says Richard Sosville, vice president for sales and marketing. The "My desktop at Dow" site is a two-way street. "It also allows Dow the opportunity to drop the user a note or communicate personalized information based on preferences expressed upon registration," says Kanina Blanchard, communications manager for Dow's Internet and intranet initiatives. "For instance, we might inform someone interested in polystyrene of a special exhibit or demonstration at an upcoming trade show." Dow account managers are also setting up sites for executives at key customers to communicate basic industry and other executive-level information. The same "Desktop" concept applies to customer groups as well, for which Dow can create sites that provide access to a particular product database by a target audience. The data could include case studies, competitive information, or computer modeling systems for proprietary material selection or performance under specified stresses. "These are value-added technologies and tools that give us a competitive edge with strategic customers," says Blanchard. The Dow intranet plays a key role in keeping the sales force-now operating remotely in North America--connected to the company. Salespersons tap into the intranet for news, what's being said about Dow in the media, and to reference position statements--for instance, Dow's stance on the company's liability in breast implants provided by Dow Corning Corp. (a joint venture between Dow Chemical and Corning Inc.). "It helps keep people motivated, in touch with the company, and empowered, knowing that the customer doesn't know things about Dow that the sales people don't by virtue of being physically cut off," says Blanchard. Dow is currently evaluating Webcasting technology, aka push technology, to actually deliver content directly to a salesperson's computer, rather than relying on him or her to search for information. Site-Seeing Visit the Web site of AMP Inc., the world's largest electronic connector manufacturer, and you'll find a product catalog with some 90,000 components. Difficult if not impossible to navigate in paper format, the online version allows an engineer to cut the catalog down to size with an interactive search engine that drills into the product maze by component parameters (gold contacts, pointed connectors, 100-volt capacity). An engineer can locate a part that fits his specifications without ever knowing the part number. Once located, 3-D CAD drawings of the part can be downloaded to the engineer's working drawing and plugged directly into his circuitry design. "We've seen savings in an engineer's time--from minutes, up to a day and a half--in locating parts, gathering technical data, and getting that information into the document they are building," says Jim Kessler, director of global electronic commerce at AMP's Harrisburg, Pa., headquarters. Up in eight languages since January 1996, the site receives 75,000 hits a day, from 65,000 registered users in 80 different countries. Currently a visitor to the AMP site can select the language the catalog is displayed in and can identify the country of delivery for products, which then triggers display of standard stocking parts and part numbers for that country. In the next phase of sophistication, AMP will add another layer of security and create company-specific "sub-catalogs" of standard stocking parts for a particular company based on that company's part numbers. "So by virtue of his registration at the site, an HP engineer, for instance, will get a customized catalog of standard HP parts identified in the HP format," says Kessler. "As our relationship with a customer is enhanced, there is an almost infinite level of customization possible, literally with specific engineers in specific companies." Since the AMP Web site went up, the role of the salesman has become more consultative. "In the past the salesmen have spent a lot of time analyzing the catalog with the customer to help select the right product," says Kessler. "With the search engine we have stripped away the less complex selection activities, off-loaded the sales organization of the more mundane work, and really added value to the customer relationship." Analyzing "click prints"--point of entry, length of time on a page, and products and applications viewed--all help AMP paint a profile of the interests of a site visitor. Combining thousands of these profiles with proprietary software reveal market and industry trends, according to Kessler. Dead-end paths help AMP identify holes in the product line that could signal line-extension opportunities. Hits from a variety of individuals at an unknown company could point to a potential large account currently not called on. "There is quite a bit of valuable information available to us," says AMP's Kessler. AMP now offers its services in a consulting and systems-integration role for other companies wishing to establish a strategy and presence on the Internet. For more information, visit Other companies whose sites have highly interactive content include:

  • Millipore Corp. maker of purification technology for R&D and manufacturing applications. Once into the Millipore site, users can create their own product catalog on the fly, based on their particular area of interest. After a custom catalog is established, the system continually tracks the user's click prints, and automatically updates selected pages for the next viewing. Specific messages, promotions, or useful accessories can be posted to registered users, based on expressed preferences.
  • GE Plastics. By downloading a video player, users can fly through Living Environments, a 3-D concept house with plastics in nontraditional applications, such as roofing and window glazing. By clicking on "hot spots" throughout the house, users bring up the benefits of the application of a particular plastic at that specific location in the house. The fly-through concept is being expanded to include an automobile fly-through showing parts-reduction and design-for-assembly opportunities with GE Plastics.
  • Hewlett-Packard. Once on a catalog page, a visitor who has questions about system configuration can click on the "Call Me Now" feature, a little red telephone icon that initiates a call to the HP customer-service center within seven seconds. When the customer-service rep answers the call, he or she can see the click prints of the caller and, with the caller's page in view, is better prepared to deal with any questions.
  • Rockport Corp., market leader in the "brown shoe" category.. After a visitor describes his work, leisure, and recreational preferences, the site generates a customized catalog of shoe recommendations to complement that lifestyle and indicates the nearest retailer.
Global Management "Most of our big sales in recent years have been accomplished because of our ability to link the teams around the world, and those resources are engaged over the Internet," says Stephen Hamilton, sales process systems manager at HP's Computer Systems Operations-Americas, Cupertino, Calif. HP's global account-management strategy begins with a database accessed via a Global Account home page linking to information on key multinational customers. For instance, the Ford page links not only to the Ford Motor Co. home page, but to a Ford organizational chart of personnel pertinent to the success of the account, an organization chart of the HP/Ford global-account team, each individual's responsibilities, and individual account plans. Account presentations are posted, so they can be shared and used uniformly at different worldwide locations if desired. Dealing With Dealers The Internet is also proving to be a valuable tool in linking companies to their dealer, manufacturing rep, or distributor network. For instance, Snap-on in Kenosha, Wis., has developed a network linking some 4,000 of its nationwide franchise tool dealers. Each is provided with a network browser that defaults to the Snap-on Web site where the dealers can tap into new-product information, training rooms, news groups by topic, and promotional details. "The dealers can browse at their convenience and get the information that's specifically important to them," says CIO Larry Panatera. "For example, new dealers spend time in the training rooms, while established dealers share best practices." Rockford Corp., Tempe, Ariz., maker of audio systems and components, will be up on the Internet in May, first with a communication network for its 21 manufacturing reps and by August for its 1,200 dealers. Accessible to the distribution network will be order status off a real-time database, including a post-shipment hypertext link to the carrier when possible. Reps will be able to check open receivables, get invoicing information, check return material and credit line, and get management information. Although purchasing will be against a traditional line of credit, financial transactions could one day occur via electronic-fund transfer, predicts Dave Richards, vice president of information technology.

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