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WHAT THE MARKET WANTS: Five Proven Reasons To Offer Online Ordering

by Richard Smith
Posted On: 12/16/2009

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coffee service, office coffee service, OCS, office refreshments, vending, vending route, Richard Smith, online ordering

As an OCS operator in today's world, you probably have been approached at one time or another by someone suggesting your company should have a website. Perhaps you've given it some thought on your own, or maybe been asked by a customer or two. It probably doesn't take a lot of time for you to think of other OCS companies you know of that have websites. It really doesn't matter whether they are acquaintances, friends, industry suppliers or direct competitors; at some point, something compelled them to make the decision to go online.

Regardless of the fact that other people have done it, when considering this for your own business the questions remain: Why do I need to do this? What benefits have been gained by the other companies I know who have done this already? In the end, there has to be sound business reason to spend money in this area rather than others.

Well, the good news is that there are direct benefits to putting up a website and offering your customers and prospects the ability to order online. Having worked with many operators on their e-commerce projects over the years, we can tell you that there are some benefits you will see. The degree to which each of these is realized varies from operator to operator, but they hold true for all of them nonetheless.

We are going to look at five of these reasons, based on real world results from OCS companies who have made the decision to offer online ordering. We're not talking business-to-consumer sites selling to anyone with a credit card, anywhere in the country, and shipping everything by UPS. The benefits presented here were obtained by companies just like yours, selling online to their existing customers, delivering via their own trucks and usually focusing within a specific geographic area.

1. Deeper Penetration

It doesn't take very long after launching your site to see this begin to occur. You will notice that long-time customers begin to order things that you have never seen them order before.

People often fall into the habit of quickly filling out a fax order form or jotting down a quick list to place a call-in order. The range of products they purchase seldom changes or increases. This changes somewhat with the Web.

With your website, you have the opportunity to always have your entire product line available for your customers to peruse. You will find that customers tend to "explore" while on your site, and many times find things they never knew you carried.

A perfect example of this comes from an operator we worked with a couple of years ago. This particular operator had given access to the site to a few key accounts while still in the testing phase, with the understanding that it was a work in progress and he wanted their feedback and comments. The website contained a mechanism allowing the operator to highlight certain products on the home page. A few items were placed there, without much thought behind it, simply to get something up for testing purposes.

After just a few days, the operator called to tell us that he had just received an online order from a long-time client for two items they had never ordered before. Not coincidentally, these happened to be two of the products featured on the home page of the test site. This isn't to say that you can get your customers to buy anything just by placing it on your website, but with a well-designed site and good functionality, you will absolutely increase the mix of products you sell to your customers.

2. Increased Average Order Size

To some extent, this goes hand-in-hand with the first point. In working with operators on their e-commerce projects, we have found that the average order size for their companies does increase as a result of online ordering.

While this is a great thing at any time, the point becomes even more interesting today, when customers are re-examining everything they buy from you and, in some cases, may be cutting back on purchases. You're not going to double your volume overnight, that is for sure, but you will definitely see an increase in the size of your average order.

Again, to relate an example:

We recently worked with an operation to redesign its website. They had been offering online ordering for a little over a year prior to the redesign, but they had been an early adopter of e-commerce and the site really needed an update. Using feedback from customers and lessons learned after a year of offering online ordering, their website was completely revamped.

In their first month of operating the newly designed site, with its better navigation and easier ordering capability, online sales dollars grew by a full 20%.

While a 20% increase may be rare, we have found that all the operators we have spoken to will tell you unequivocally that online ordering has increased their average order size.

3. Quicker "Time to Market"

This is an exciting time for coffee drinkers. The fall is here and so are all the most popular seasonals. Timothy's has just started shipping its Donut Blend, which is bound to be hot as people place orders to try it for the first time, and Pumpkin Spice is sure to fly out of your warehouse. Are you getting your customers excited?

Many OCS operator websites have been stoking the firebox for these flavors. Graphics proclaiming that Donut Blend is coming soon and Pumpkin Spice is now available have been up since the middle of August. Your website is a great way to effectively communicate with your customers. A couple of well-placed home page graphics can get the word out immediately and put your messages in front of the people doing the buying. It's easy to create a "coming soon" advertisement, and then quickly follow it up with "now available" on the day your warehouse receives the merchandise.

The Web offers the ability to respond quickly to hot trends and to change information much more quickly than traditional methods, such as including flyers with invoices or sending announcements with deliveries.

A website also serves as a great place to test new products and measure the results in a relatively inexpensive fashion. Anything that doesn't seem to be working can be replaced quickly, while ideas that catch on can be beefed up just as rapidly.

One operator we currently work with informed us that he shipped out half of his first pallet of Donut Blend on the same day he received his delivery from Timothy's. He credited this to the "coming soon" advertisement he had placed on his website, and his acceptance of pre-orders.

This doesn't work in all cases. There have been plenty of times where ads have been pulled after a week or two of low response, but it is the ability to quickly sense and respond to this that makes the Web such an appealing test ground.

As autumn changes to winter, and the mix of available seasonals changes, how effectively are you communicating newly available items to your customers?

4. Keep Customers on Scheduled Route Days

It's a fairly common misconception that once your company offers online ordering, customers will expect (and you will have to provide) next-day delivery. In reality, there is a lot you can do via your website to encourage customers to order in time for their scheduled delivery dates.

The key idea here is that your website should not force you into doing things in a way for which you're not prepared, or that you don't want to do. It is very important to remember that your website should be designed to function so that it fits the way you do business, not vice versa.

You are probably familiar with websites that greet you by name when you log in. It's typical to see a message similar to "Welcome back John Smith!" Simply adding some text to keep each customer informed of the scheduled date is an easy and helpful mechanism: "Welcome back, John Smith! Your next scheduled delivery date is 11/01/09." Reiterating this message during the checkout process and on the order receipt as well is a good idea.

Since most websites ask customers to use their email addresses to log in, you now have the added benefit of having email addresses for many of your accounts. You can now use this information to send reminders to your customers prior to their scheduled delivery dates. Many OCS operators already do this by running a pre-call operation, where call lists are printed out each morning and the office staff phones each customer to remind them to order.

At the very least, email reminders will help to bolster the pre-call efforts, and in reality it should significantly reduce the number of calls you have to make.

We have discovered two very interesting results with the companies we have worked with to implement email reminders:

First, customers come to depend on these reminders. To relate a recent support scenario: An operator we work closely with called to tell us that there was something wrong with his email reminders. As it turned out, his cleaning company had inadvertently knocked the network cable out of the computer that sends the reminders, and consequently they were not being sent out. How did he find out about this? Several customers called to tell him they did not receive their reminders. What a great example of how valuable email reminders can be! His customers had come to depend on them to the extent that they called him when they didn't see them in their inboxes.

Second, order volume increases. This is pretty easy to quantify. From time to time, different operators we work with may suspend sending out their reminders for a day or two, for a variety of reasons. It could be that they are switching Internet Service Providers or doing network maintenance; the reason isn't really important. During the time period when those reminders are not going out, there is a marked drop in order volume. The volume returns to normal once the reminders are turned on again.

The actual design of the email is up you. The message should be changed occasionally to keep it fresh, but it is not something that needs to be changed on a weekly or, usually, even monthly basis; and it can run the gamut from plain text to a nicely designed graphical email with links back to your site. The format of the email is usually driven by a mixture of personal taste and graphic design budget.

Remember also that your e-commerce software should provide a mechanism for sending these reminders, even to accounts who have opted not to order online. There is value in email reminders for these accounts as well, even if it only reminds them to fax or call in their order.

For operators who feel it is important to offer alternative delivery dates, there are myriad options limited only by what you feel you can successfully accommodate from a daily operations standpoint.

Some websites allow customers to simply fill in a desired delivery date, with a notation that it will try to be accommodated but there are no guarantees. Another approach is to offer a choice of alternate dates subject to a small additional "off route charge." Still other operators opt to offer several pre-defined dates to choose from, and in some cases, next-day delivery is offered too.

5. It Is Expected

It isn't often that "Everybody else is doing it" is a good reason to decide to do something. In the case of online ordering, however, that may be exactly why you need to do it, from a business and competitive point of view.

Even in your own day-to-day activities, how many times do you find yourself turning to the Web for information? It may be as simple as typing a supplier's name into Google to get a quick phone number. In most cases, you'd be surprised if you couldn't find them on the Web. Your customers surely expect the same from you.

A basic Web presence is the present-day equivalent of a business card. Your prospects often will have seen your site before you have ever had the opportunity to hand them a card or send them a catalog.

The entry of office supply megacompanies and retailing giants into the office coffee service market almost mandates that you offer online ordering in order to compete. These companies have all been offering online ordering for many years.

The most common strategy we have heard from the OCS operators we work with is to compete with the big-box stores by emphasizing service rather, than price. That said, you still need to be sure you are able to offer the same basic capabilities as they do, and online ordering is one of them. With the playing field leveled, you can focus on excelling in service and other key areas that will help you to compete.

Our last example for this article deals with this exact scenario.

During the final development phase for a new customer, we received what looked like a real order placed via the customer's test website. This was a site we put up for the purposes of testing and feedback from the operator himself. Although the site was almost done and fully functional, it had not yet been published to a publicly accessible Web address. We placed a call to the operator to discuss the order and see what he knew about it.

He related the following story to us. He was calling on accounts who had not ordered from him in some time, to determine what the reasons were and see whether he could regain their business. One of the accounts he called told him honestly that she had been ordering her K-Cups from one of the well-known office supply superstores. She told the operator it was because she could do it online, and it was just easier. He asked her what she was paying and he was surprised to find out she was paying more than he had been charging her. He pointed out the price difference, but this didn't change her mind.

He then explained, "Well if it's the online ordering that you like, we now have that too." and he gave her the Web address of the test site. Later that day, she logged into the test site and placed the order that we had seen come across in our office. Needless to say, he recovered the account and is now 100% convinced of the value of e-commerce to his business.

The reasons for making sure your company is on the Web are more compelling today than ever before, and they are certainly not limited to just the five we've discussed. Each of these areas alone has merit, so looking at them collectively really helps to paint a clear picture of why the Web is so important to the future of OCS operations.

It's time to move beyond looking at e-commerce as a necessary evil and consider it for each of the sound business reasons presented above. A strong Web strategy, including online ordering capability, should be a part of your ongoing plans to sustain and grow your business. There are direct benefits to your business and to your bottom line. And after all, isn't that what it's all about?

RICHARD SMITH is founder of OCS Access (Denville, NJ), a computer company specializing in website design and support for refreshment services businesses. OCS Access's monthly subscription service provides operators with Internet ordering solutions that are fully integrated into existing industry backend systems, including ChallengeMaster, Crane Streamware, InOne Technology, MEI and custom programs. Smith's experience in technology and marketing has made him a popular speaker on the industry lecture circuit.