ONLINE TRENDS: Customers eluding the ‘Net?

Survey indicates that businesses aren’t buying on the Web?

For business-to-business catalogers, building a viable online business continues to be a work in progress. Results from Catalog Age’s exclusive U.S. Business 2000: Catalog and Internet Purchasing Trends survey show that a majority (64%) of respondents didn’t make any business-related purchases online last year.

Considering the recent torrent of press over the enormous growth of b-to-b e-commerce, the fact that just 36% of our respondents (a total of 1,000 businesses were surveyed) purchased products via the Internet last year is disappointing. With this in mind, mailers contacted about this and related findings from the survey say they’re hard at work to get that percentage up quickly.

Home schooling books cataloger Delta Education, for instance, is aggressively seeking and implementing ways to draw more customers to Delta’s Website, says the company’s vice president of sales and marketing Mary Ann Kleinfelter. “A lot of b-to-b can be billed,” she says. “So we’re offering direct billing on our site” and encouraging customers to use it by promoting the site in the catalog.

Another key to luring customers or prospects to the Delta Website, Kleinfelter says, is to show many products. “There’s a line between having a lot of product and making the site easier to use,” she says. “The Internet is still so new that you have to do a little trial and error to see how much product you can offer while still keeping customers’ patience. We are finding that customers are patient with us as we experiment. After all, a lot of companies are constantly trying new things out on the Web.”

But in discussing her observations of other business-to-business catalogers, Kleinfelter says she doesn’t believe all mailers are as eager to lure Web traffic. “It’s amazing how some catalogers make a big deal about advertising their Websites; then there are others for which you can’t find anything related to their sites.”

Among other catalogers contacted, John Yeager, client engagement consultant for the Littleton, MA-based Compaq Computer catalog, says the key to drawing more business customers to Compaq’s site is to “understand opt-in better so we can more effectively target our offerings.” Also, he says, “We continue to offer customers multiple choices of information.” In addition to providing several product categories for different types of computers, software, and peripherals, Compaq divides its site into different markets, such as home office, government, software, and online services. And if Compaq is running a special promotion on its site, Yeager says, the company makes sure that its telemarketing department knows about it “should Web customers choose to phone in their orders.”

A marketer from a catalog of paper goods who asked not to be named says that Web development at the mid-size company “is definitely a priority. We’re increasing our advertising spending on e-mail, and on targeted direct mail pieces designed to drive traffic to our site.”

As a paper goods marketer, the source has good reason to try to steer traffic to the company’s Website: Our survey shows that many b-to-b shoppers still don’t buy such items as paper products or office supplies over the Web. The research shows that just 10% of respondents buy paper goods and general office products from the ‘Net. By contrast, 77% of respondents say that they buy paper products and office supplies through print catalogs.

Ready when you are

A representative from a major computer cataloger, who also requested anonymity, says that despite the company’s elaborate Website with easy ordering capabilities, “our customers still tend to go to the phone to order. They’re more inclined to look at all our product information on the site, but then phone in their orders, since they’re just not comfortable ordering that way yet.”

In fact, our U.S. Business 2000 survey shows that 7% of business respondents who do not buy business products from the Internet say it’s because they don’t trust the online medium. (It’s important to note, however, that nearly 52% of the non-‘Net buying respondents say they don’t make Internet purchases because they don’t have access to the Web.)

The computer catalog executive, like many other mail order catalogers, would like to get more orders submitted online to cut the costs involved in telephone orders. But this source also wants to accommodate customers’ ordering preferences, so “forcing them from one mode to another isn’t in our best interest.”

Along similar lines, Colchester, CT-based cataloger S&S Worldwide is making sure it has all its marketing channels – Internet, catalog, field sales, and telemarketing sales – easily available based on customers’ preferences, says vice president of marketing Jeff Winters. Still, the recreational equipment cataloger hopes more of its customers will opt for the Internet and its lower cost-per-sale ordering.

“We continue to put our site address on everything we mail,” Winters says. “But our problem is that not a lot of our customers are computer users, because many are park and recreation directors,” he says. “But we’re making sure we’re ready when they are, and we try to have a channel available that fits the way they prefer to do business.”

And to encourage more ordering in all media in the face of escalating competition, “we find increasing our overall frequency of contact with customers bears more fruit than just increasing our prospecting,” Winters says. “That contact includes catalogs, sale catalogs, and flyers.”

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