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Join Our Research Team at DMA 2014
Mar 14, 2005
How To

Five Specific Tactics Omaha Steaks Uses to Increase Online Sales

SUMMARY: Did you know Omaha Steaks is a family-owned company? We interviewed fifth-generation (yes, that's 5th) Senior VP Todd Simon to find out how a company founded in 1917 is beating the dot-coms at their own game. He spelled out five tactics -- including exactly what he's looking for in marketing partners and why Omaha Steaks' customer service never sends a canned auto-response to any visitor email.
"Direct marketing is about 80% science and 20% art -- and the same principles that guide a successful campaign in the mail are the same ones that guide one online.”

That's what Todd Simon, Senior Vice President and fifth-generation owner of Omaha Steaks, believes: Duplicate the disciplined principles of direct marketing to be a success online. Here, Simon shares his tips for online retail success.

Tip #1. Test everything -- but remember it's a game about "hitting singles and doubles"

Simon runs a test with every campaign, whether it’s for email or a new Web campaign. “As a basic rule, we either test one thing or everything,” he says. So he’ll test different offers (premiums, different price points, etc.) head-to-head. Or, he’ll test two completely different creative approaches.

With each test, he’s looking for incremental improvements. “You’re not always hitting the ball out of the park. The testing game is about singles and doubles.” But the Omaha Steaks corporate culture says the next offer must do even better.

“We’re always trying to beat our last success,” he says. (Does that make him a little crazy? “Yes, but it’s a good crazy.”)

Tip #2. Allow anonymous shopping

Online merchants run the risk of overfeaturing and overautomating, Simon says. “The technology is seductive.”

For example, requiring return visitors to log in every time they visit may give them more personalized service, such as order history, but some visitors don't want to bother signing in every time they come to the site. So Omaha Steaks doesn't require it.

“You can come and buy and be done,” Simon explains. “Or you can sign in as a user and we'll give you order history, your address book, and special offers and those kinds of things.”

Either way, the ordering process is not substantially different for those who sign in and those who don’t, “so if you're just in a hurry and you don't want to bother with the sign-in process, we don't force you.”

Tip #3. Partnerships are key -- but analyze them carefully

Simon has had to be creative and open-minded when it comes to partnerships -- however, they must be chosen carefully. Here's what he looks for (beyond brand synergy and similar business philosophy) in partners.

o What is the partner's level of attention to detail?

"If we're going to endorse a brand, it must have the same level of customer service, quality, and attention to detail in the customer experience. Otherwise, we end up looking bad," says Simon.

o Is their database roughly the same size?

"If we're going to do an email PS mention and they're going to do the same thing for us, we're looking for someone who has the same size database." The same thing goes for swapping of package inserts, coupon books, Web site links, blow-ins in catalogs, or using each other's affiliate networks.

o Similarities/dissimilarities in customer base

Simon asks: "Are we trying to get more of the kinds of people that they have, are they trying to get more of the kinds of people that we have, or are we both reaching out to someone new?"

o Tracking capabilities

Can the partner track the effectiveness of the partnership? They decide together what the measure of success will be -- and then Simon makes sure the partner can actually measure it, using "all the usual performance metrics: revenue, margin, cost per customer acquired, cost per sales dollar. ..."

For example, he says, one partnership might look wildly more expensive than another, but it attracts a significantly higher average order or a higher lifetime value. Only with sophisticated tracking would he be able to see the realistic view of the two campaigns.

Tip #4. Match the level of customer service you give offline

Omaha Steaks has a customer service philosophy that says, "We're going to make it right, no matter what," says Simon. Here's how the company replicates that level of service online:

o 800 number at top and bottom of each page

"You'll never have to go through 19 layers of menus to get our phone number," says Simon. The number is at the top right and bottom center of every page -- and there will be a person on the other end of the line.

o Nonautomated email responses

When a customer sends an email with a question, they do *not* receive an automated email that says: We have received your request and will get back to you within 24 hours.

Instead, within half an hour they receive an actual answer to the question, from an actual person.

o Internal belief in the unconditional guarantee

"We'll solve a customer problem first and figure out later if it caused an internal problem, how to solve that."

In other words, says Simon, "If we want a problem solved around here, we don't forward a bunch of emails around, we walk upstairs. It's a corporate culture thing. We don't let something sit in the inbox if it has to do with a customer."

o Strong internal tools

Omaha Steaks has an internal Web site where all of the customer promotions are posted. The Web site allows customer service reps to see the exact promotion that a customer is seeing. So if a customer calls and says, "I have this email that says I have an offer of free shipping but I don't understand if it means shipping on everything or on a specific product," the rep can pull up the exact same offer and go over it with the customer.

Tip #5. Make difficult concepts “insanely simple”

"Probably the biggest challenge is to remain customer friendly in the digital age," says Simon.

Two areas that can be problematical for food shoppers online are food preparations and food allergies.

At a high-end grocer selling items similar to those sold by Omaha Steaks there are plenty of reps who can answer questions such as, "How do I defrost these pork chops, and what's the best way to cook them?" or, "I have a peanut allergy -- does this sauce contain any peanuts?"

But online, those are "hard concepts."

To solve that challenge, every item has product information -- right on the product page -- that tells how to store/thaw/prepare the item. And most items include a link that opens a pop-up with nutritional and ingredient information. It's not fancy, sophisticated, or complicated.

"The best compliments I get from customers are when they email me and say, 'I ordered from your Web site and it was really simple.' We're always cautious about making our site too rich in features because at the end of the day we know they're coming to us to buy high quality steak and food and anything else might obscure that."

Note: Omaha Steaks is a member of Shop.org, a forum for retailing online executives to share information, lessons-learned, new perspectives, insights, and intelligence. More info at http://www.shop.org

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