NM 200 Roundtable: Site payoff goes way beyond ROI

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After several years of struggling to justify their projects, Web marketers are seeing a big return.

In a recent roundtable with five executives representing sites on the NetMarketing Top 50, Business Marketing found that companies are seeing a return on their investment, with some even earning a profit on their sites.

The work now, they say, is centered on evolving the sites while continuing the integration of the Web not only into marketing, but throughout the company.

To find out what challenges today's marketers are facing, and where marketing on the Internet is headed, Business Marketing talked to executives from Marshall Industries, Dell Computer Corp., Federal Express Corp., Thomas Publishing Co. and United Parcel Service of America.

An edited transcript follows:

Business Marketing: As the Internet has started to mature as a marketing tool, are you seeing a return on your investment? Are you making money on your site?

Rob Rodin, Marshall Industries: I'm absolutely convinced our Web site is returning to the company value in revenue, customer satisfaction, new customers, new opportunities and efficiencies in our work flow. We've never seen it as a separate cost center: It's part of marketing operations. It has been an extension of, an augmentation to what we do.

Bob Langer, Dell Computer Corp.: We're currently exceeding $5 million a day in revenues worldwide [from online buyers of Dell computers] on the Web site. Based on a seven-day week, that's $35 million a week. We're not just reporting a spike. Those numbers have to be sustained for two months consecutively before we report them.

We have a specific budget within our online organization, but we don't break out how much we spend within the group. But the return is very, very quick. Typically, within a couple of months of making an investment, we have a payback of the investment and a profit.

Dale Hayes, United Parcel Service of America: We track our investment in and revenue from our Web site, it being cheaper to track a package on the Web than by phone. A customer call to a phone center is measured in dollars, but on the Web it's measured in dimes.

We're increasing our investment in the site substantially: Spending this year has increased by orders of magnitude over a few years ago. You have to establish strong returns to be able to make higher levels of investment. We budget our Web site as a separate line item and have dedicated resources focusing on it.

Business Marketing: How are you staffing your site internally? Are you hiring marketing people or tech people?

Mike Janes, Federal Express Corp.: We have a somewhat traditional organizational approach with a marketing group, program management group and development group. We use two marketing agencies to help us develop navigation and e-commerce strategies and do some technical work. Our internal development people participate somewhat but mostly integrate back to the FedEx system.

Our marketers are pretty much hybrids. Normally they are people who marketed for technology companies or who have technology skills. You don't have to be able to write Java but be savvy about the use of the Internet and able to put yourself in your customers' shoes.

Julianne Garry, Thomas Publishing Co.: Our site has grown tremendously over the past year, so our developer, Inforonics, has had to beef up their people to respond to our constant development requests. On the marketing front, there's just me. We will be adding more Net marketers in-house in the coming year.

When looking for a Net marketer it's essential to find someone who has an integrated media background, someone who's multitalented, has experience in all forms of media. It's also vital that they have a talent of bridging the technical with the creative and can analyze the psychology behind behavior.

Business Marketing: What challenges have you faced in creating your site, both internally and from the outside?

Mr. Rodin: Initially the challenges were general acceptance and sponsorship of the site, getting our business constituency to support it. Now the challenges are keeping the site aligned with the mission, strategies and values of the company; making it exciting, interesting and valuable to users; keeping it current and contemporary; and linking it to others in the supply chain.

Mr. Langer: We were pretty early to the party in building e-commerce. There were few commercially available products we could utilize to create the site and no third-party software substantial enough to support our needs, so we've been forced to do a lot of it ourselves.

We're continually looking for third-party capabilities to supplement what we do or that we can eventually migrate to. But our Web site is hovering around 2 million visits a week, and we haven't come across anybody that can keep up with us.

Mr. Janes: Staffing is the big challenge. Our site has grown so rapidly and become global, so finding right people to work on it is a challenge. We've recruited aggressively and become known as an attractive place for candidates to consider.

We're also educating other parts of FedEx in marketing, sales and customer service to get them involved in the Internet initiative.

Business Marketing: Where are you at in terms of site development from a marketing standpoint? Where are you headed?

Mr. Rodin: Our capabilities are quite large. We can do anything from a transaction to a solution to [offering] a wide range of connections, internal and external, to the company. We have online video and voice training seminars with live communications, so an engineer in Italy can learn about [a] Texas Instruments [component] in Italian. We have live chat manned 24 hours a day.

For the future, we're looking at smart agents that anticipate needs, forecast, coordinate, collaborate and connect universally. We're looking to really create a flow of work in progress that hits new levels of efficiency, eliminates transactions and increases quality and, as a result, increases profitability.

Mr. Langer: We expect to see a continuing drive in personalization. In July we launched personalization in our membership services. Customers can register and tell us what they do, where their interests are, so we can serve them newsletters and information while strictly adhering to our privacy policy, which is highlighted on the site.

Mr. Janes: We will continue to add more transactions, more effective ways to do business. Ultimately our objective is to literally have every aspect, other than the physical pickup and delivery, accomplished through the Web site.

We also want to facilitate new applications and new value creation that don't exist in the physical world, like our ShipAlert, which, as a sender prepares a shipment, sends an e-mail alert to the recipient or third party.

Ms. Garry: E-commerce and the addition of CAD [computer-aided design] drawings are currently in development. We substantially improved our e-commerce interface, navigation and functionality. The new version is planned for release this summer.

Mr. Hayes: We want to continually expand our functionality and global presence. Our goal is a one-on-one relationship with our customers through mass customization.

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