As we have written about in the past, the industrial sector of the economy is heavily dependent on the Internet. According to 2001 data from the U.S. Department of Commerce (the latest date complete figures are available), 18% of manufacturing shipments were e-business transactions, compared to 1% of retail sales, 2% of service sales, and approximately 10% of wholesale commerce. More startling is the volume of manufacturing shipments through eCommerce, which totaled $725 billion and accounted for 68% of all e-business. These numbers dwarf retail eCommerce for the same period, which were $34 billion and less than 3% of all e-business.
And just as major retail sites like Amazon and Ebay depend heavily on their catalog content–and thus their content management capabilities–industrial sites are also heavily dependent on content and content management. Simply put, industrial buyers go to the Web seeking specific, actionable information about the products, materials, and components they need to buy. If they don’t find that content on a given supplier’s Web site, they move on. And they move on quickly. Within seconds, they have made a decision about whether the Web site has the information they need, in a form they need it in, and accessible in a way that is easy, fast, transparent–and anonymous.
I am attending a seminar today on industrial buyers and how they use the Internet. The event is sponsored by the ThomasNet.com. I will be live blogging during the morning as the speakers walk through some background and case studies tailored to manufacturers and industrial suppliers.and
The event is being held in Leominster, MA, which is famous for being the birthplace of Johnny Appleseed, but, more to the point of today’s topic, is the self-proclaimed “Plastics Capital of the World” and home of the National Plastics Center and Museum.
You don’t call, you don’t write. One of the earliest points made by Matt Rosenthal of ThomasNet is that potential buyers don’t interact with potential suppliers the way they used to. In 1993, 70% of buyers would call a potential supplier. By 2002, that percentage was down to 4% (sources: Forrester, B2B Magazine), and Matt speculates that by now the number is even lower.
It’s the Internet, stupid. Two more facts: 91% of industrial buyers rely on the Internet to collect information. 90% of industrial buyers visit the Web and eliminate potential suppliers before they even consider calling (sources: E-Commerce Trends, ICR Research, Outsell, Inc., and Supplier Survival In the Information Age., 2003 Thomas Industrial Network, Inc.) Google agrees, of course, but also commisioned some research to back the point up. (They also did some further research with ThomasNet that showed buyers are indeed using search during the industrial buying process and that plenty of sellers are simply not being found.)
It’s not rocket science. The featured speaker, Aaron Kahlow, CEO of latest US Census information estimates nearly 16 million manufacturing employees working for approximately 350,000 companies, or an average of 45 workers per company.), opens by saying there are no magic secrets to industrial marketing and selling on the Internet. Rather, it is applying strategic thinking to a few key factors–driving traffic to the Web site, converting that traffic into buyers, and then measuring the Web site activity to understand how the Web site is performing. Aaron correctly points out that for many manufacturers, which tend to be small and medium sized companies, even one or two new customers a month can be sufficient to justify the expense of investing in and optimizing a Web site. (The
Organic search rules. Aaron points out that 77% of search engine clicks come from the organic search results, so search engine optimization is critical. Key elements of SEO include pages that are easy to crawl and index, pages that are structured to meet the search engine algorithms, pages that are keyword and content rich, pages that are frequently updated, and sites that are easily navigable.
Easy to get into, but complicated to maintain. Aaron admits that Pay-Per-Click (PPC) is easy to set up and potentially very powerful. You can buy your way onto the first page. You can drive traffic. And you can fill SEO gaps. It also enables “deep linking”–providing a link directly to the specific page in your Web site for ordering that product or part. But it can be expensive, and it can be time-consuming. It can also be very competitive, depending on the industry, with rising prices for given keywords, and click fraud is a real problem.
Destination sites have their place. Destination sites like ThomasNet.com have their place. They have a highly targeted audience, can produce quality leads, and the better ones do a lot of the SEO and PPC work for you. But a single destination site will likely not produce all the leads that a company needs, so industrial companies need to view the destination sites as part of a larger Web marketing strategy.
Measure twice, cut once. Web site measurement is critical, but only if you can use the measurement to then improve on the Web site experience and usability–thereby increasing your conversion rate. Aaron points out that even very small increases in conversion can generate substantial revenue. He used the example of an electronics manufacturer:
- 10,000 users per year
- 3% submit RFQ (300 RFQs per year)
- 30% close rate
- Average sales price of $10,000
- Revenue = $900,000
- 1% increase in RFQs (100 additional RFQs per year)
- Additional Revenue = $300,000.
The 8 second rule. Potential buyers abandon ineffective Web sites very quickly. Some facts: 65% of Website visitors give up before they find what they came for. 40% of users who abandon a Website NEVER come back. (Source: Boston Consulting Group) Less than 10% of users will contact a supplier whose Website does not provide detailed product and service information. (Source: 2004 Content Solutions User Needs Research Study)
Conversion, conversion, conversion. The goal of the Web site is tobegin converting visitors into buyers, but Aaron points out that conversion is best understood as any positive action a visitor takes on your Website that moves them closer to buying from you. This can be direct actions such as requesting information, a catalog, or a quote, but it can also be indirect actions such as printing product information, downloading a spec sheet, or downloading and begin looking at CAD data. This last example–downloading CAD data–is a surprisingly effective means of eventually landing the sale.VSET So conversion is important, but how do you achieve better conversion rates? Aaron suggests an evaluation process he calls VSET. Visitors will very quickly try to:
- Verify they are on the right Website
- Search for the specific product they need (the way they want to).
- Evaluate enough product information to make an informed decision
- Take Action once they have found the product they are looking for.
As a good example of this concept, Aaron cites Superior Washer and Gasket Corp. Right from the front page, you can verify that this company is in the washer business. The main navigation then leads you right to a detailed search page, and the resulting individual product pages then provide detailed information to evaluate, including specifications, dimensional drawings, and photographs. (The site also provides a facility to compare products against each other.) Finally, there are many ways for the site visitor to take action–for the seller to potentially convert them into buyers–to request more information, request a quote, or call. (For an even better example of embedding the “take action” steps into the Web site, seeon the Web site for Speciality Manufacturing Company. Users can download more information, further refine their search, request a quote, and so on.)
Key takeaway: It’s the content. Content drives traffic, and content drives conversion. The right content, managed and organized well, made navigable, gives site visitors all they need for VSET–to verify they are in the right place, to search for more and meaningful information, to evaluate the information, and then to take action on the information. Aaron was persuasive, and the facts certainly back him up. According to ICR Survey Research’s October 2002 “Buyer Behavior E-Mail Study,” in the industrial marketplaces 96% of buyers are more likely to contact suppliers who provide a lot of product information versus those who don’t. If I were an industrial company, I would be working on attracting those 96% of potential buyers, and not the remaining 4%.