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Aug 10, 2001
Case Study

How Grows Product Sales with Online Community

SUMMARY: Everyone knows female Web surfers love community.It's genetic. Women are far more likely than men to enjoy writing, sharing information and reaching out a helping hand. Sites with predominantly female traffic have taken advantage of this from day one of the Web.

But once you have lots of women (and ok, unusually communicative men) visiting your site's community section, how exactly do you make money from it?

Hear how marketers at maximize sales from their site's community area.

When the Web team at Martha Stewart Living Omnimedia (MSLO) decided to add community to their site, Martha herself got involved. Michael Gutkowski, VP Marketing & Business Development MSLO says, "She really wanted to have it sound distinctive." So, instead of just naming the site area 'Community' like every other site, the MSLO gang named it, 'Meeting Place.'

Gutkowski was in charge of making sure MSLO's investment in this new Meeting Place wasn't wasted.


Realizing that almost everyone who comes to dreams of having a personal interaction with Martha herself, or a Martha-blessed expert, the MSLO online team tried to make the Meeting Place fulfill as many visitor hopes as possible.

First they met with Martha and top Company editorial experts to determine which topics and sub-topics the site included message boards for -- such as Gardening: Seed Swap.

Then they worked deals with related professional associations, such as the National Gardening Association, so professional members would be identified with a "blue ribbon" when posting to the Meeting Place. This meant even though Martha couldn't be everywhere, at least certified professionals could pitch in and give the boards visible credibility.

Gutkowski also hired the Blue Barn Interactive, a firm specializing in providing trained staff to manage online community. Blue Barn's job is to make sure that every board is 'touched' at least twice a day. Josh Sinel, CEO Blue Barn says, "Our approach is subtle. A customer's level of trust in the brand, feeling like they're cared for, will increase exponentially their ability or impulse to buy."

So the Blue Barn team trains Meeting Place reps carefully. These reps read the latest MSLO magazines, watch the TV shows, and know how to drop a non-salesy mention about one of MSLO's 5,000 products available online when the time is right. But as Sinel puts it, "That's not why community is there. If you've outraged people, you've done it too soon." Subtlety vs. salesmanship is the order of the day.

Blue Barn keeps its community reps fresh and effective by keeping their hours short. Sinel says, "We allow 2-3 hour shifts for active boards. It varies to intermittent contact in the morning, afternoon and evening for message boards." In the meantime, the on-site marketing team, led by Gutkowski, maximizes community involvement to sales in three ways (beyond the occasional product mentions tossed in by Blue Barn's folks):

1. Gathering Mailing Lists:
Before you can post at or explore Q&A transcripts on topics such as 'Weddings,' you must become a registered member. The community content itself is a powerful draw to get millions of visitors to sign up. MSLO then uses the information gathered to promote to these highly qualified lists via snail mail and email.

In the past few months, Gotkowski's team has been testing more personalized questions (not required) in the regular membership sign-up area. The answers are used to determine if a subscriber should get a particular newsletter, such as Gardening, which contains related content and MSLO product ads.

2. Following Up with New Members
When new Meeting Place members sign up, their 'Member Confirmation' page and corresponding email features a special offer for a 10% off discount at the Martha Stewart By Mail Web site in the next 14 days. They receive a personal source code to input to get their discount so sales can be tracked.

3. Running Special Offers on the Boards
As Meeting Place members visit, they're presented with very tasteful, color photographs of a 'Featured Product' at the upper left area of each main category and sub-category page. Featured products simply reveal a pic, price and name -- no overt sales copy until one clicks to learn more.

These classy, hotlinked photos add more to the Meeting Place than they take away in terms of crass commercialism. We can't imagine that many visitors actively dislike them. Price points range between $15-$300. Gutkowski says, "In a perfect world we'd sell lots of $500 things, but our visitors want lots of different things."


James Follo, CFO of MSLO says, "One of the things we're most pleased about is we've gotten to a point where more than half of commerce revenues are coming via the Internet site. There really are long-term economic, fulfillment and CSR cost benefits from that!"

More interesting numbers from Follo:

-'s registered users, the vast majority of whom joined to get access to the community features of the site, have now surpassed the 2 million mark. About 100,000 new visitors register at the site each month.

- MSLO's total direct buyer files (including online and print catalog buyers) have "increased in excess of 60% over the last 12 months" with an average order size of $74.

- More than 50% of MSLO's direct buyer sales are made online -- NOT including the sales made by Kmart's which are counted separately on the earnings statement under 'royalties.'

- According to Gutkowski, the snail mail addresses captured during the online registration process have a "very high value" and print catalog mailings are "extremely effective" to them. So community is a great way to gather solid direct postal mail lists.

BTW: When Gutkowski talks about the MSLO upcoming site upgrades (and he can't resist slipping in a mention every other minute) he makes little kids excited about Christmas look like nonchalant slackers. In the late fall, the site will apparently be upgraded in many, almost-too-wonderful-to-believe ways. Plus, the Company's lucky marketers will able to access a whole new line of back-end reports integrating results from all media -- online and off. We promise to bring you an update on this next year. In the meantime, be jealous.
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