In 1996, Boise Office Solutions, a wholly owned
subsidiary of Boise Cascade Corp (NYSE:BCC), was one of the very
first large traditional B2B companies to start selling online.
David Goudge, Sr. VP Marketing, explains, "It was customer
driven. In 1995, NASA told our sales rep, 'You need to start
taking orders over the Internet - can you do that?' Of course
the rep says, 'Sure!' Then the rep came running back in to us,
'Does anybody know what the Internet is?' Marketing raised its
hand, and we literally started online from scratch."CAMPAIGN
Unlike other office supply ecommerce sites such as
Staples.com and OfficeDepot.com, which serve a broad customer
base of consumers and small-to-midsize companies, Boise focused
on the Fortune 1000 marketplace. Goudge says, "Our customers are
Boeing, Texas Instruments, Chase Manhattan … we're really, really
good at taking care of 200,000 end-users."
The marketing team quickly found out that online advertising
tactics on portals such as Yahoo that might work for other firms
selling identical products, did not make sense for Boise.
Goudge says, "We tested the holy beans out of online ads. It was
a cheap way to get a gazillion eyeballs. But we got almost zero
customers at the end of all that money. Think about who we're
going after. Not end-users. We're going after maybe 100,000 of
these [corporate procurement officer] guys. Large businesses
don't go to a Web site and find an office supply deal."
This did not mean the team gave up on the Web. Instead of viewing
it as a means of getting new customers, they focused on how it
could help them increase customer satisfaction and the cost-of-
Driven by customer requests, Boise was one of the first companies
to offer custom microsites more than five years ago. Goudge
explains, "It looks like the customer's site. It's mostly to
give them comfort and support. They say, 'I've got 80,000 users
who want to use this and I want them to feel like it's ours.' It
was really inexpensive, and easy for us to do, and looked slick."
Things did not stay easy for long. As large corporations
built their own intranets and bought eprocurement systems from
companies such as Ariba, "suddenly microsites weren't so cool
anymore." Goudge says, "Almost every sophisticated large
customer is looking for a way to cut the cost of procurement. It
became a pretty normal discussion between our sales force and
Sales reps continued in their traditional role as the front line
communicators with clients, while Boise built an entire ecommerce
support team to handle the new client needs that reps were
discovering. "Sales reps aren't typically detail oriented or
knowledgeable in integration," Goudge explains, "and we don't
want them to be. Their distinct competence is communications.
They can smell out that a customer wants a little more
sophisticated way to use the Net and gain control."
After a rep finds a customer need, Boise brings an entire
ecommerce team to bear to solve it. The company now has more
than 100 ecommerce support reps in the field that report to 14
central ecommerce managers. Boise's Director of ecommerce Bob
Sieger, who reports to Marketing, is responsible for all
communication between the various teams, and for coordinating
with Boise's IT department.
"We're powerfully coordinated," notes Goudge, "We're tied like
Siamese twins to the IT guys who do development." No customer is
alike. "Sometimes they hold the content. Others do a punch out
using all of our data and sending the shopping cart in a
transparent manner to our Web site."
In the meantime, Boise's own Web site has been developed into a
corporate-customer-friendly purchasing area. Unlike eretailers
serving millions of end-users, Boise's home page is not cluttered
with loads of offers. Instead it is focused on one task:
Getting the visitor to log in to their company's account.
Other upgrades have included a "call me back" button that
customers can use to receive a phone call in less than a minute
from a rep familiar with their account call. Goudge notes, "If
we do the right thing with CRM, it's going to be a pretty warm
As the site's become a smoother ordering experience for
customers, Goudge's marketing team have begun to reach out
aggressively to a tier of customers they did not focus on serving
as much before -- mid-sized companies that were not quite big
enough to warrant a personal sales rep holding their hand on site
frequently. Boise made a big outbound telemarketing push to
drive more of these customers to the Web in 2001.
In 2001, 30.4% of Boise Office Solutions sales -- an estimated $760 million of roughly 2.5 Billion overall sales --
were made via some type of ecommerce. The general breakdown for
US-only ecommerce sales was:
- 23% is "old traditional, boring, EDI stuff"
- 72% are orders placed directly on Boise's Web site, the vast
majority by corporate customers (vs small businesses or
- 5% are orders placed on what Goudge calls "third party" sites,
such as through corporation's internal eprocurement systems.
By the end of 2002, Goudge expects to see 45% of all orders
coming through ecommerce. However, he notes that most of this is
not new business, but rather old business moving online. And he
expects this rapid rate of change to slow soon. "Growth rates
are beginning to peak a little." Now channel migration is
slowing because there's a smaller pool of companies that have not
already moved over.
One number completely surprised him. Initially sales from
eprocurement systems grew at a steady pace. Then for a while in
2001 the percent actually shrunk. "I even challenged the
numbers!" says Goudge. It turns out to have been an overall
trend as procurement officers were initially psyched about their
new eprocurement systems; then disillusioned by reality
(nothing's ever as easy as a software sales rep says it will be), and then pressured into using those new systems anyway as
corporate leadership want to see some payback for their heavy
Australia has been another surprise. While Boise's ecommerce
sales figures in Canada have pretty much matched USA figures in
terms of a percent of overall sales, Australians have surged out
ahead. Goudge thinks Australians in general are often slightly
earlier adopters of Net-related applications, "They do their
In the end, however, Goudge notes that success online has not
been so much about growing sales as it has been about saving
money. "I don't care much about sales numbers. How many
telephone lines does that translate to? What does that translate
to in terms of saving hundreds of thousands of dollars in phone
calls we don't have to take?"
Although Boise is now one of the biggest online sales players in
the world, Goudge says humbly, "We're not geniuses here. We're
just trying to schlep paper clips."