E-commerce experts share ‘lilypad’ marketing approach

Grand & Toy, the 122-year old Canadian office supplies institution, saw e-commerce account for 22 per cent of its sales at the start of 2002. By the end of 2003 that figure had jumped to 48 per cent.

There was no magic to it, nor was there any need to reinvent the online wheel, Grand & Toy’s

director of customer relationship marketing, Mike Duggan, told an Association of Internet Marketing and Sales audience Feb. 17 in Toronto.

What Grand & Toy has done for the 10,000 unique companies that buy from Grandandtoy.com is to provide them with monitoring, approval and pre-approval applications, customer-specific pricing and account information and an online catalogue search of some 7,000 products, Duggan said.

“The Web is also the repository for the latest Grand & Toy products instead of a once a year (paper) catalogue,” he pointed out.

Mark Fox, chairman and CEO of Novator Systems and a professor of industrial engineering at the University of Toronto, was a member of the same AIMS panel. He talked about his client Time-Warner to illustrate the success it has had with its e-commerce multiplier channel strategy.

“The major strategy that people are pursuing today as a path to profitability is a multi-channel strategy. The Web is no longer a unique channel into which you sink lots of money with no return. It’s a channel that has to be integrated with all other channels.”

The notion of channel multiplication is simple, Fox continued. It’s the ability to build and deploy quickly and at a reasonable cost commerce-enabled Web sites that target unique and sometimes ephemeral market segments, so within Time Warner’s corporate site there are multiple other sites that leverage the company’s familiar consumer names, he said.

Consumers may not know or care about Time Warner, but that’s not the case with its properties such as Warner Brothers, HBO and New Line Cinema, producer of the Lord of the Rings and Terminator movies, Fox continued. That allows the company to create sub-sites within sub-sites thus multiplying its Web presence.

Another panelist, Klick Communications’ partner Lee Segal, took up Duggan’s theme of there being no half measures in e-commerce. Toronto-based Segal said there’s much more to it than the online storefront: the entire company needs to structured as an e-business.

That’s what happened with one of his clients, an American medical benefits firm. MedNet wanted greater customer loyalty, so Segal says Klick looked at the entire picture. It examined how well customer service representatives were trained and made them pass a job related course; it introduced an adaptive decision tree based on customer behaviour and historical analysis; and it instituted service quality ratings for its CSRs. Klick’s strategy for MedNet worked, said Segal, and its business has tripled.

Chris Emergui is the president of BAM Strategy with offices in Montreal and Toronto. He told the audience the biggest challenge facing e-commerce operators was whether they could distinguish themselves on anything but price. If a site is unique, he said, recalling one that sold antiquities from Egypt and other countries, then price is much less of a factor. But if it’s not then e-merchants must be price competitive.

Emergui also recommended what he called “the lilypad approach” to e-marketing. That meant, he said, online operators should encourage their users to take smaller jumps at first rather than trying to leap across the entire pond right away.

They must also make their sites easy to use, he warned, and even easier to use for repeat customers. Another weapon in the smart e-marketer’s arsenal is advertising, but Emergui stressed it must be designed to put users in the right frame of mind to buy. Measurement is the most important thing to remember about any ad campaign, he added, so e-merchants can tailor their sites to cost per action, for example.

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