Cisco wins big with Net ordering

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This first promotion resulted in 800 people visiting the site and 100 customers or resale partners placing orders online. Looking to drive 30% of its total business to the Internet by July, Cisco Systems is deploying a combination of traditional and new-media marketing strategies to get business customers and resale partners to use its Web commerce site for ordering products.

Already, the San Jose, Calif.-based $4 billion manufacturer of Internetworking products such as routers and switches is having remarkable success with Cisco Connection Online, its business-to-business Web site.


Since its launch last July, CCO has generated $216 million in revenue through online ordering, and is now doing $5 million a day.

If the company achieves its 30% goal, it would be looking at more than $1 billion in online orders, which it expects to accomplish by the end of its fiscal year in July.

However, that's only three months away, so to jack up online ordering, Cisco is boosting its marketing to get the word out. With a $1.5 million online marketing budget, Cisco has been using a variety of campaigns to drive business to CCO:

  • A direct e-mail campaign to key constituents, including resale partners such as AT&T, Siemens Stromberg-Carlsom and Alcatel Telecom and business customers such as Cellular One and other large companies that order from among Cisco's 12,000 products.

  • An in-house incentive program that rewards sales reps for every customer they get to convert to online ordering.

  • A customer support initiative that uses Cisco "electronic commerce ambassadors" to walk customers through their first online experience to make sure they come back for repeat business.

    On the direct marketing side, Cisco launched an e-mail campaign to its direct customers and resale partners once the site was operational. It sent users a message introducing the site and providing the URL, then followed up with more e-mail if the users went to the site.

    In addition, it offered customers $100 off the price of a service contract, which is priced variably depending on the product, if they used the site.

    This first promotion resulted in 800 people visiting the site and 100 customers or resale partners placing orders online.

    In-house, Cisco gave a $500 bonus to the first 100 sales reps that got customers to register for CCO, which not only helped drive business to the Web but also alleviated sales reps' concerns about the Web site.

    "They had to get used to the fact that they wouldn't have as much human contact," said Todd Elizalde, senior manager of networked commerce for Cisco.


    The sales reps worried that the online ordering capability on CCO would cut into their commission structure as companies ordered directly from the Web site, and would result in customers placing online orders incorrectly without direct assistance from a sales rep.

    However, both of these fears turned out to be unfounded, says Mr. Elizalde. On the sales commission side, the reps still get a commission even if customers place orders online.

    And because Cisco built a sophisticated configuration agent into its site to helps customers include specifications for very complex products such as routers, which are dependent on other network components, ordering inaccuracies have actually dropped from more than 20% before CCO to less than one-tenth of a percent now.

    Cisco's direct customers say the configuration agent is one of the best things about the site, because if mistakes are made during the manual ordering process, it can add up to a delivery delay of up to three days.

    "It's a vital tool in the ordering process," says Charles Miano, purchasing agent at Cellular One, which uses CCO for all of its Cisco ordering.

    To date, Cisco has 12,000 registered commerce users at its site, which cost roughly $3 million to build, the bulk of which was staffing costs.

    In addition to the $216 million it has generated from online orders, CCO has saved Cisco more than $250 million in costs related to product and literature distribution and staff time.

    But the biggest benefit, and one that's a driving force behind the site's development, is the ability to free customer service and sales reps so they can better serve Cisco customers and build quality relationships, says Chris Sinton, senior manager of CCO.

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