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Feb 21, 2001
Case Study

AMSOIL's Web Site Strengthens Dealer Relationships and Gets a 20-Times Return on Investment

SUMMARY: No summary available.
CHALLENGE

Ed Newman, Marketing & Advertising Coordinator for AMSOIL Inc., makers of "The Original Synthetic Motor Oil", found himself in a bind familiar to many B-to-B marketers hoping to expand online. Newman's product is a famous brand that is sold via a network of authorized dealers. Newman knew it would be possible to use the Web to sell direct to the end-user, but he didn't want to circumvent or in any way upset his dealer network. So he sought ways to use the Web to strengthen dealer relationships instead.

CAMPAIGN

From the very start, when AMSOIL launched its first small site in 1996, the company decided on a dealer-focus. Newman says, "Everything we do goes back to the dealers, helping the dealers, motivating the dealers, giving them tools and lead generating for them."

By 1997, that initial small site, which had been developed in-house, was generating about 100 sales leads a month that AMSOIL carefully redirected to its appropriate dealers. By mid-1998 that figure had climbed of its own accord to about 200 leads per month.

Then in the Fall of 1998 AMSOIL tested a completely unrelated marketing campaign via direct response ads on cable TV. It didn't do so well. Newman says, "The 60 second spots ended up costing us about $15 per lead, the 90 second spots cost $7 a lead. The only real cost for our Web site was $50 a month to host it, so we were paying just cents per lead that it generated." However, the TV campaign had an unexpected benefit. Although AMSOIL's URL was not mentioned in the spots, during the two months they ran, site traffic jumped dramatically, producing more than double the normal number of sales leads. AMSOIL decided to dump DRTV, but move ahead with Web development.

AMSOIL's newly renovated site opened August 1999. The cost was under $30,000. Newman says, "It's not full of bells and whistles. There's no Flash that would be cool to have." However, a record number of 2,400 visitors came to the site the first week it opened, 2221 of which visited the site's store, 95 of whom placed orders.

Heartened by this success, in February 2000 AMSOIL reached out to enable dealers to sell from its online store. Newman explains, "We contacted all the dealers who had Web sites and had them link to our site. We gave each a unique ID number so when people went to their sites and then came to the AMSOIL site, the right dealer would get automatic credit for any orders or leads generated. So, we had a gigantic funnel effect from all the dealers promoting their own sites." AMSOIL also started a program to sell and host sites for dealers who didn't already have them.

AMSOIL fulfills all site orders from its 14 warehouses while giving the appropriate dealer full credit for them. Newman says, "We don't want to create the impression that we're bypassing dealers. We let them know we're always supporting them. They reciprocate with loyalty to us."



RESULTS

Newman says, "Our internet strategy has worked fabulously. We generate in revenue more than 20 times what we spend and have only just begun. We've spent so little, and we can easily see selling five million dollars worth of business in the not too distant future. We haven't seen a plateau yet."

So far 165 dealers have chosen to have AMSOIL create and host sites for them, and approximately an additional 800 have Web sites that link to AMSOIL's site.

The site's visitors have continued to rise. In January 2000 the site got about 21,000 visitors and 65,000 pageviews. In January 2001, the site got more than 65,000 visitors and 240,000 pageviews. These visitors are definitely generating business. In just one weekend this February, the site received 165 cash orders averaging $120 each.

You can understand why Newman is gung ho about his plans to extend AMSOIL's Internet marketing. He says, "The opt-in email marketing plans (two newsletters just waiting for the go ahead) will be extremely useful to extend the reach of what we are doing." He also hopes to create an extranet sharing real-time sales information between AMSOIL, its warehouses and its dealers someday soon.

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