Almost every company says, "We listen to our customers!" but everyone knows that proclamation often has little basis in reality.

So, when we met the CEO of a company that actually does listen to its customers … and lets customer comments drive everything from its Web site design to its product offerings … we had to ask him about reality. As in, "Does listening to your customers really, honestly make a big difference to your bottom line?"

His answer should shake a few faux-listeners out of their complacency.

CHALLENGE

Phillip Beukema Sr, CEO Corporate Apparel Unlimited (CAU), did an enormous amount of market research prior to starting his company last year. First he and his management team learned everything they could about their projected marketplace -- mid-sized companies that buy apparel such as shirts with their logos embroidered on them.

Next, in early summer 2000, Beukema and his team surfed the Internet looking for inspiration from other eretail Web sites, whether they were in CAU's marketplace or not. He says, "You can get an idea from anywhere, from anybody, whether or not they happen to be in your industry."

Instead of just guessing what worked for other sites, Beukema's team contacted every single site they were inspired by to ask, "Does it work?" He says, "We'd call them if there was a phone number, or email if there wasn't. In no instance did I encounter an individual who wasn't willing to talk. When you compliment someone, it starts the conversation in a nice fashion and they're happy to talk about their site." Beukema poured everything his team had learned into a detailed ten-page RFP that was submitted to four site developers for bids. At last, by September 2000 the site was built and ready to launch -- just as dot-coms began crashing all around them.

The CAU team gulped and moved ahead. They had just 18 months to make their new, Internet pure-play profitable.

CAMPAIGN

Email marketing was the hot Internet marketing tactic-du-jour, so CAU rolled out a series of four email broadcast campaign tests to rented B-to-B opt-in lists. Offers ranged from sales pitches for particular products, to a sweepstakes.

But, while the campaigns generated fairly good click through rates, mainly in the 5% range, the site didn't get many sales as a result. The team needed to find out why.

Although buyers can purchase directly at CAU's site, purchasing logoed apparel is complex enough that most buyers prefer to use CAU's prominently displayed toll free phone number or to email in a request for a personalized proposal. CAU's team jumped on each prospect immediately (generally turning around personalized quotes in under two hours), not only in order to convert them into buyers, but also to learn more about their customers.

Once a week the team held a formal internal teleconferenced meeting to discuss what they'd learned during the week's customer and prospect phone calls. Several strong trends became clear, which indicated the carefully researched site needed an overhaul.

Luckily Beukema had arranged to keep his Web developers, Hanrick Associates, on retainer instead of considering the site "finished", so they were ready to change the site on an ongoing basis per visitor input. Beukema had also carefully limited the amount invested in email campaign tests, instead of blowing his whole marketing budget on them, so he had funds left over to explore in alternate marketing tactics per customer feedback.

Here's what CAU learned from client and prospect feedback, and how it to changed the company:

1. 100% of purchases were event-driven

While Beukema expected many of his sales to be prompted by events such as annual sales meetings, company picnics and the like, he was dumbfounded to learn from customers that 100% of all purchases were driven by events. No wonder broadcast email didn't work! No rental list could match the exact date buyers were looking to purchase his products.

After careful testing, Beukema swung almost 90% of his marketing budget to a combination of search engine optimization and pay-for-position search terms on Overture (formerly GoTo), Google, Kanoodle, Aha and FindWhat.com. That way the site would appear when corporate buyers were actively seeking the types of products it carries.

CAU also invested in creating a series of special landing pages -- one for each popular search term, so when visitors clicked through, they would be presented with a product directly related to their search, rather than having to navigate through the home page.

On the Web design front, CAU's team added two new features to the site to directly appeal to event organizers -- the first is a "Event Collection" tab on the main navigation bar, the second is an interactive "Event Wizard" on CAU's home page that planners can use to get apparel giveaway ideas for their event.

2. Visitors wanted even easier site navigation

Naturally most sales prospects didn't want to discuss site design flaws, they just wanted to get their orders in. But it became apparent from visitor comments that the site wasn't as easy to use as CAU hoped it was.

So in January 2001 with help from his Web developers and CAU employees, Beukema lined up a virtual focus group of 12 businesspeople who had never been to the site before. The 12 were given an extensive task list of typical site activities, such as ordering something, learning about products, and sending in an RFP. Then they each filled out an extensive emailed questionnaire explaining what they found hard to accomplish and why.

Beukema describes the results, "They wanted more functionality. Two clicks to purchase. Wherever a client happens to land, whether it's a click to a landing page from Google or if they go directly to the home page, they want to very quickly get into the mode of making a purchase, and do so easily without a lot of thinking, pausing, or trying to figure out what to do next."

The site developers set to work to achieve this, and by March 2001 the CAU site was "almost a completely new site" with far clearer navigation and multiple methods for visitors to find what they wanted, including extensive drop down menus and a Search box.

3. Even Internet-savvy business buyers like printed catalogs

About 10% of site visitors' requests were for a printed catalog. CAU is an Internet pure-play, and they didn't have the budget or inclination to get into the print catalog business. So Beukema worked a deal with his largest supplier who agreed to do an extra print run of their catalog with a special CAU-branded cover. CAU simply covers postage costs.

The catalog is now offered from the site. Instead of sending it out with a standard cover letter to requestors, CAU's account reps attach a brief handwritten note to each one, along with their business card. Beukema says, "Personalization is vital to the growth of the business. We may have a beautiful Web site, but they want to establish a connection with someone. As an Internet business, we try to personalize that relationship with the client in every way."

4. Visitors wanted an offering the site didn't carry

Although Beukema had researched the corporate apparel marketplace thoroughly before launching the company, as his team examined typical site visitor questions, a wholly unexpected new market demand emerged.

Beukema says, "A dozen times a week, prospective clients would ask, 'I know you're advertising logoed apparel, but we don't want to have it embroidered. Will you sell it to us blank?'"

Starting a whole new line of business was not in the plan, especially before the first CAU site had reached profitability. But Beukema felt he couldn't ignore such overwhelming demand. So, on September 1, 2001, CAU launched a second eretail site entitled, "Corporate Apparel Wholesale."



RESULTS

Despite the additional costs of a second site, and …


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… extensive site redesigns (plus the floundering economy), CAU is about to break even almost five months ahead of schedule.

Although sales had a slow start in late 2000, all the site revisions put into place March-May 2001 really paid off. From July to November sales doubled every single month.

The second wholesale site launch on September 1st pulled its weight immediately. Despite the events of September 11th, this second site was responsible for 50% of the company's total revenues in that month, and 85% of the company's revenues for October! Beukema says, "We were bowled over. None of us believed it would take off that fast."

Here are some more things he learned:

a. A second site can improve your sales, even if people buy the exact same products. Turns out a full 50% of the orders CAU's wholesale site gets are for items that customers want their logos added to. (In other words, precisely what the first site offers.) Beukema says, "It means when we only had one site they weren't even finding us."

b. Keep adding to the keywords you're listed under in search engines. Beukema learned that it's not worth investing in being the number one ranking on pay-for-placement search engines services such as Overture's service. You can do just as well at number three, and spend a lot less for it.

Then take the money you've saved and invest in more keywords whenever possible. Beukema uses wordtracker.com's service to get ideas for additional keywords; and, he also invests heavily in 50-100 additional keywords each month relating to whatever the site's special offer product is that month.

CAU now invests profitably in a total of more than 1,000 keywords (and still growing.)

c. Having printed marketing collateral, such as a catalog, on hand to fulfill requests is definitely worth it. Roughly 75% of CAU's catalog requesters place a paid order within two weeks.

d. It can be mission critical to have an easy-to-find phone number on your site. More than 60% of CAU's prospective clients contact them by phone, instead of email.

e. Adding a quick "Express RFP" form in a prominent position on your site's home page definitely entices prospects to contact you. That form on both sites' home pages now generates 65% of CAU's prospect emails. The remaining emails are generated almost evenly between the catalog request form and the Event Planning Wizard.

f. Buyers adore it when reps get back to them quickly. Beukema says, "Not a day goes by when we don't receive compliments from prospects and current clients who really sincerely appreciate the high quality service."

g. Your site is not viewed in a vacuum. 90% of CAU's clients say they looked at least two-to-three competitor sites before they made a purchase decision. Beukema credits his unusually clear navigation and ease-of-use for convincing many new clients that CAU was the one to go with. "We hear it daily, they surfed the competition and say, 'Your site was the most functional, it's very intuitive.'"

h. If you have multiple products, it's definitely worth it to change which product is featured in the "hero" spot top center on your home page at least once a month. Beukema says, "In October we featured denim shirts, and within two days of the time we put it on the Web, the sales of denim shorts increased by no less than 50%, and within a week increased by 200%. Then they continued at that level throughout the time they were up. The same is true of our fleece offer this month."

Beukema offers special 15-25% discounts on these featured products, but makes more than enough additional sales to cover the discount. Plus he's also often able to coordinate with a manufacturer's scheduled promotion, so his costs are lower than normal.

Overall, he says of sales, "Given the economy and dot-coms dropping like fleas, we're quite pleased."

Links to the vendors CAU uses:

CAU's Web developer Hanrick Associates
http://www.ehanrick.com

CAU's search engine optimization firm, WebSite Results (a division of 247 Media)
http://www.websiteresults.com

CAU's pay-for-position search engine manager Did-It.com (Note: CAU still handles Google placement in-house because Did-It.com can't.)
http://www.did-it.com

wordtracker.com - a low-cost service that helps you locate more keywords to optimize your site for (far, far better than using Overture's free keyword finder.)
http://www.wordtracker.com

Corporate Apparel Unlimited
http://www.caunlimited.com

Corporate Apparel Wholesale
http://www.cawholesale.com