Manufacturing / eCommerce
Despite having been a manufacturer of high performance sailing products for over 60 years, Allen Brothers only started marketing its products under its “Allen” brand in 2008. The business model has been to sell to trade distributors in selected territories, which, in turn, sell to retailers. There is also a dedicated sales operation targeting Original Equipment Manufacturers. In 2016 it was decided to expand the marketing function to deliver direct sales via an eCommerce channel and drive revenue by targeting specific territories for increased marketing activity.
Digital marketing is particularly suited to iterative development in pursuit of marginal gains. However, there is a tendency to channel activity along linear, technology driven paths. Because we can, we think we should. There are massive amounts of on-line resources, products and a culture which makes you feel guilty if you don’t implement them all. It is easy to allow this culture to override industry knowledge. However, what works for a pure play tech start-up may not be the most appropriate path for your business. Good marketing makes it easier for customers to buy, without the cost of overreaching market expectations and offering solutions no-one requested.
Sometimes industry knowledge sets what appear to be barriers, but can become, in effect, a framework of lessons learned, which can be used to inform the development of an appropriate strategy and its tactical implementation.
A M.A.S.T. To Support Sales And Staff
MAST is an acronym of Measurement, Analysis, Strategy and Tactics. It describes the Screen Matrix process.
If you can measure it you can manage it. There are not many sources of reliable, current market research data within the marine leisure industry. To make life more difficult, the sales model for the business was to work exclusively through Distributors, who then sold to retailers and subsequently to consumers. Consequently, Allen had no “closed loop marketing cycle”, no feedback channel to this consumer data and the nature of the “Wholesaler-Retailer” distribution chain meant it was impossible to tie sales data into promotional campaigns.
I made the decision to track data I could rely on, by moving all print advertising to digital media. At least that way I could track OTS, CPM and CTR and start building some metrics. The results were interesting. The first thing I noticed was that the people outside the company took this as evidence of a new direction. Those within the company who had raised objections to the change met the converse of my problem. They objected, but they could not prove it was a bad idea because they had no data on which to form an argument.
So Screen Matrix proceeded to a second initiative and gained agreement from distributors to modify certain sections of our agreements and sell a proportion of our inventory on-line, through our own eCommerce website. This meant meeting the guys in the distribution chain face to face, rather than relying on what I had been told. It was not impossible to do business with these guys and we got our eCommerce site up and running.
The old web site appeared to have a natural limit of around 20,000 page views per month. Within six months, the new site was exceeding that amount and went on to reach around 30,000. Bounces were lower, more pages were visited and the average duration was higher. This all played to my self belief. However, page views on the old site did not drop off, as I had expected them to. They continued to rise.
It turns out there was a solid constituency of users who referred to the old site for specifications, measurements and information for the trade, while the newer class of user wanted to access content relating to their interests, event news, sponsorship, video content, user guides and on-line purchasing.
I may never have found that out if I had not been forced into running two websites. If I had ploughed ahead, I would have left this significant constituency behind. The delivery of a Customer Experience and the science of Customer Engagement is not an exercise carried out in a vacuum. It does not mean forcing your customers to modify their behaviour to accommodate the newest system you have just introduced. It means not running faster than them. A new customer experience is no good unless it is a better one - one which fits with the expectations of your target group. The ideal customer experience is different for each and every customer. Some will require the Amazon, “low touch” service. Some will want to spend half an hour on the phone checking specifications. The Holy Grail is to offer multiple integrated channels so the customer has the specific range of options relevant to him at the time he needs them. “Right audience, medium, message and time” is a mantra familiar to all marketers.
This knowledge, derived from analysis of the available data, modified the Marketing Strategy. Instead of concentrating exclusively on sales based content for potential new customers, we ran this channel alongside content supporting existing trade customers with digital content such as How To videos, How it’s made videos, new exhibition stand graphics and CRM campaigns.
For the consumers, we changed tactics and increased the resource going into social media, increased sponsorship investment and targeted new product launches at the premium sector of the market. What effect did this have? Happily, I can tell you over three years OTS increased exponentially at around 1,000% per year. Revenue from eCommerce channels did increase but from zero base and for various reasons there is still considerable room for growth, but it is new, high margin revenue derived from premium products and it is growing. It is washing its face. Average order values and margins on the web are far higher than traditional channels, but volumes are still a small proportion of the total. The company has now put its entire product range for sale on-line, accepting transactions in different currencies, based on geolocation.
Overall revenue, however, has increased significantly. Having the eCommerce channel has proved valuable in ways not initially envisaged. For example, in renegotiating export distribution agreements and stripping out sub optimal Distributors. Revenue increased by some 20% in 2016-7 and margins were up significantly too. This growth has enabled a six figure investment in plant and systems, increasing capacity and reducing marginal costs. Ecommerce revenue has exceeded targets and now contributes positive Return on investment and a significant and growing proportion of profit.