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It was early 1996. Seattle’s Olympic
Hot Tub Company co-owner Alice Cunningham and president
Blair Osborn were skeptical about the value of establishing
a Web site for her company. How, they wondered, could
they sell such big-ticket items as hot tubs over this
new medium? Few people were likely to see a hot tub on
the Web and order it without seeing it or trying it for
themselves.
"Some 99 percent of our buyers have never owned
a hot tub before," Cunningham explains. "And
it is seldom that someone calls in and says, I am too
busy to come into the store, just send me the brochure
and I’ll order from it."
She estimated that their company received orders for
only one or two hot tubs a year from people who wanted
to order a hot tub on the telephone sight unseen.
Surely, therefore, an Internet site could not pay for
itself. It could not be used to sell hot tubs and it
was of little use as just another brochure. So why bother
with it?
Another reason for her skepticism
was that she wondered how many people really were using
the Internet to shop.
She read financial publications regularly and found little
reference to commerce on the World Wide Web. "We
knew what the Internet was, but just barely," Cunningham
adds.
But Eva Chiu helped overcome that resistance. The president
of InfoAdvantage had offered at the start of 1996 to
build a site for Olympic Hot Tub Company.
Cunningham resisted. But Chiu was
persistent. At the same time, Cunningham began reading
Investor’s
Business Daily and was particularly intrigued by daily
reports on three or four companies that the newspaper
described as the basis of the new wealth. These companies
were using the Internet and new technology to take giant
strides in their business growth.
But Cunningham faced another barrier: She did not have
the money to establish a site. She could not see her
way clear to set aside cash from their budget for a project
that at that time, in spite of what she read, seemed
ineffectual and, most important, was unlikely to lead
directly to sales.
That barrier was overcome when Cunningham and Osborn
received cooperative money from Hot Spring, a manufacturer
that Olympic Hot Tub represents. They received the money
because of the large volume of their sales within the
Seattle area. The money was targeted for advertising.
"I told Eva I would give her all of
my regional money - a modest sum," Cunningham says.
To many Web designers, that money would be inadequate
to design
a site. But Chiu was willing to accommodate Cunningham
and at least get her company up and running on the Internet.
"Then I had to convince the manufacturer that having
a Web site was a good idea," Cunningham continues. "They
had kind-of heard of the Internet; they were just in
the beginning stages. But they agreed. Six months later,
by the way, they developed their own site. And 18 months
later they had their own webmaster."
Cunningham spent three months developing content for
the Olympic Hot Tub web site. Chiu asked Cunningham who
their buyers were, what they looked for and what would
motivate them to buy.
"We studied results of customer surveys and feedback," says
Chiu. "In essence, we carefully considered the demographics
of potential customers. Then we designed the content
of the site to excite potential customers and to address
their issues."
Based on the findings, Chiu included
a "Ask a Spa
Owner" section of the page. Also, a discussion on
whether to use a spa while nude or not was added to involve
customers and make the site more interesting, Chiu says.
It proved to be one of the most popular pages and has
attracted favorable comments, she adds.
Eventually the site was posted.
Nothing much happened for a while. The turning point
came when two young men in their 20s arrived in the store
one day. They said they had seen the Olympic Hot Tub
site while surfing the Net on a laptop with a beefed-up
modem in their car. They loved it. They wanted to look
at one of the hot tubs they had seen on the site.
Before they left the store, they had bought a hot tub.
"I realized these were the affluent young people
who were our best prospects for hot tubs," Cunningham
recalls. "This was the next generation. And they
gathered their information from the Internet."
Today, Cunningham declares that the site is a success
and has paid for itself many times over. True, she agrees,
hardly anyone has bought a hot tub over the Internet.
(Unlike SpaDepot, Olympic does not sell supplies and
equipment on its site.) But the Internet site has driven
traffic to the store more effectively than other media
have done. She cites the educational factor of the site
as its most significant value.
"We give them all the information they need to
make an educated purchase," Cunningham explains. "The
first temptation was to put up a web site and say, Buy
these hot tubs," Cunningham says. "Eva explained
the site cannot be constructed like that. That’s
not the way it is done. It must be education-based."
Chiu was right. The educational aspect
has proven to be the value of the site. "Because most people who
buy a hot tub have not bought one before, the lack of
understanding of hot tubs is a barrier to buying," Cunningham
explains. "People are embarrassed to go into a store
and to ask elementary questions about hot tubs. They
want to walk in with a broad knowledge of the variety
of hot tubs, what each can do, and what each can do for
them."
Such an education is particularly
important for more affluent people, Cunningham adds.
The reason many are
able to afford hot tubs is that they have excelled in
their careers. And the reason they have excelled is that
they have specialized in an area about which they know
a great deal. "They get paid a lot of money for
understanding something well," Cunningham says. "So
when they go to shop for something, they feel they have
to be an expert in that, too.
"The cognitive dissonance comes when they are not
an expert in something. A lot of people end up not buying
because they become confused. And many of those same
people have a great fear and distrust of sales people.
They don’t want to go in and ask the sales person
any questions."
So Cunningham and Chiu constructed the site so that
it contained a wealth of information about hot tubs.
Prospective buyers check out the web site, gather the
information they need, and visit the store. The added
knowledge that they bring with them not only makes the
buyer feel comfortable, it helps the sales people, too.
Instead of having to spend time educating the buyers,
they are able to discuss the merits of each hot tub at
an informed level. The result is that sales are closed
more quickly.
A typical pre-Internet scenario was that potential,
but uninformed, buyers would visit the store and gather
information. They would leave with the promise that they
would think it over.
Now the scenario more typically is
that a potential buyer already has thought it over
because of the information
gathered on the Internet. In addition, more potential
buyers visit the store because they don’t feel
uncomfortable about having to ask sales people elementary
questions.
"We drive traffic into the showroom through the
site," Cunningham explains. "We don’t
actually sell any hot tubs on the site. Potential buyers
see the site and they pick out a model, then they come
into the store.
"People are time-starved and
we try to cater to them. They also are information-starved.
And they are
fearful of sales people.
"We try to address all those
concerns on our Web site by enabling them to learn
everything they need to
know.
"When they come into the showroom, they feel they
can talk to the sales people because they already know
about the subject. They will come in and look at a hot
tub and say, ‘Is this the Sovereign?’ We
ask, ‘How did you hear about it?’ They reply, ‘On
the Internet.’ "
Cunningham says the site has leveled the playing field
for the customers by giving them enough information.
In addition to provision of the information
itself, Cunningham also has created a section of the
site called "Ask
Alice" to give interested viewers the opportunity
to ask questions about hot tubs that might not be addressed
on the site.
Owners of hot tubs also have an opportunity to post
suggestions and comments on the site. Those comments
help non-owners to know what to look for in a hot tub.
Cunningham also has incorporated
into the site information on the way the company does
business. Its "total
satisfaction plan" was developed in 1989 after Olympic
Hot Tub held a focus group with customers. In that discussion,
the customers pointed out several psychological barriers
that had held them back from buying a hot tub earlier.
They were:
The company responded by providing a guarantee satisfaction
plan that offers a 30-day money-back guarantee.
The company says it will deliver the hot tub right to
the spot that the customer wants; it will not simply
drop it on the driveway. And it will move it for free
within six months if the customers wants that done.
- Who will do the warranty
work?
The company says it will service
whatever it sells as the customer’s home.
- Will I be able to get it
through the door?
Olympic Hot Tub sends a staff member to the house to
inspect it before the sale is concluded if there is any
doubt.
This information now is posted on the site, providing
a further incentive to buy.
"We give them all the information; we eliminate
the fear barriers," Cunningham says. "They
have no excuses left."
The site not only provides information for potential
buyers locally, it also gives the company a reach outside
the Seattle area. Cunningham gives the example of customers
from Juneau, Alaska, who flew the 1,500 miles to Seattle
to buy a hot tub from Olympic.
"The only way they would have known about us was
through our Web site," explains Cunningham. "By
the time they got here, they knew all about hot tubs."
How can Cunningham be so sure that the Internet is bringing
customers to the store? The reason: She keeps detailed
figures on where customers hear about the company.
At the time the sales order is completed, the sales
person needs to ask the customer where they learned about
the company. If the information is not entered, the sales
person will receive no commission. That strong motivation
ensures that the source for each sale can be tracked
effectively.
During a recent typical month, Olympic Hot Tub received
more sales through people hearing about the company on
the Internet than from advertisements in the three local
newspapers combined, Cunningham says.
In fact, the Net beat everything
except word of mouth—direct
referral by friends or relatives—and the yellow
pages. The Internet outperformed trade shows or fairs,
too.
Now Cunningham has added a new dimension
to her sales tracking. She asks people who say they
visited the company
as a result of the Internet site how they found the site. "A
lot come through the search engines," she says. "They
type in ‘hot tub’ and our site shows up." A
number also come as a result of the Hot Spring site,
which has a link to Olympic Hot Tub for Web users who
live in the Seattle area.
Cunningham also has bought banner advertising alongside
real-estate advertisements for buying a home. She says
that people today want to have everything all at once.
They do not wait, as they used to do, to buy a hot tub
after living in a house for a few years. Now they want
the hot tub when they move into a new home.
"In 11 days, I had 124 click-throughs to our site
from an advertisement in the Internet real-estate section
of a local newspaper," she says.
Not only that, but Cunningham also asks why people bought
a hot tub. As a result of the answers, the company has
isolated a number of niche buyers and has provided links
on the site to those niches and interest groups. For
example, people who suffer from fibromyalgia can find
relief in a hot tub, so Olympic Hot Tub has a link with
a fibromyalgia site. Links to the Better Sleep Council
are provided through Hot Spring.
Cunningham also has instituted an annual Christmas card
contest.
"Recently we started having even more fun with
it, giving it a warmer, fuzzier feeling. One section
deals with kids, who love hot tubs," Cunningham
says.
"We also started adding more about physiology and
the benefits of hot tubbing on the body. We also have
moved from providing the educational aspect and our philosophy
on the site—which we have kept—to become
more sophisticated on how people get to our site, linking
with other sites in our own niches, and looking at advertising
on other sites.
"We have the site listed in
all of our advertisements; it also is on our business
cards and it is in our brochures.
I think we do a really good job of letting people know
we have a web site."
And clearly once they find out they visit the site.
And before too long they buy a hot tub, too.
Chiu of InfoAdvantage, which continues to manage the
site, says the site acts as an advertising billboard
because current sales programs and awards earned by Olympic
Hot Tub are posted on the site.
Sales people ask customers about their preferences and
as a result InfoAdvantage adds and changes site content
based on the feedback. For example, sales staff noticed
that families with children often find a lot of fun things
to do around hot tubs, so a section of fun with kids
was added.
"We always strive to focus on what distinguishes
Olympic Hot Tub Company and the hot tubs they sell from
other retailers and products, Chiu says. "We highlight
the quality of their products, and the high quality customer
service Olympic Hot Tub is famous for."
Chiu adds that the site is customer-driven and has received
favorable comments from customers and Web surfers on
its content, presentation and ease of use.
Copyright Graham Fysh, 1999.
Reprint with permission.
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