Online retailers have a uniquely difficult challenge in building relationships and creating customer loyalty. Without a store-front to rely upon, most online retailers lead with product selection and price to attract first time buyers.
This leaves many to rely on ad words and keyword search as their only acquisition funnel. Generating repeat business, building trusted relationships, and retaining valuable customers? Those three goals can become esoteric concepts to the marketing department as they continually focus resources on acquisition for fear of muffling the principal sales driver that works.
The first wave of internet business placed the hurdle for marketing very low. Building traffic and gathering eyeballs was all that mattered and it seemed that selling this portfolio of traffic was more the goal than creating a business model on fundamental business principles.
Web 2.0 is different. The online stores that are working operate like a traditional retailer in the sense that they have to provide product choice, quality, and good service as a minimum to succeed. The business models adopted are generally sound and the achilles heel for those single channel, pure online, retailers remains price. Price as in LOW price.
Hammer Nutrition is one pure online retailer that caught my eye. The company caters to a well defined passionate customer group, endurance athletes. But they are not allowed the privilege to compete in a vacuum as many of their supplement and fueling products (electrolyte drinks, energy bars, joint formulas) are sold by larger, heavily branded, and more widely marketed companies from GNC to Power Bar (owned by Nestle) and Clif Bar (distributed through major grocery chains, Costco, and specialty shops).
How does Hammer Nutrition compete? It stays true to the values of its founder, Brian Frank. Brian grew up in California in a progressively-minded household and caught the action sport bug early on, riding bikes, skateboards, swimming, and racing BMX and motocross bikes to the point where he won Montana State Motocross Championships in the late 90’s. Frustrated by the sparsity of quality, naturally formulated products to meet the needs of endurance athletes, he founded Hammer Nutrition during the 80’s.
His mantra from those days has survived the passage of time: Deliver naturally formulated quality products and cement customers for life with product knowledge and trust.
A little guerrilla marketing was at the core of the Hammer strategy: provide “Race Bags” at events around the country as a cost effective way to meet the core audience for Hammer products at their moment of highest interest. If you’ve participated in any organized athletic event from a local 5K walk to an Ironman, one of the “bennies” received for your entry fee is the race day bag. The bag itself carries branding on the outside and is kind of like the athlete’s version of an Easter basket – lots of product samples and surprises inside. When I spoke with Brian a few months ago, he told me that the program now distributes over 750,000 bags across 2,200 events in North America. That’s some powerful grass roots marketing – Word of Mouth advertising at its best before the term was coined.
The impressive part of the marketing strategy at Hammer Nutrition is its constant flow of educational and product information materials, part of an overall communication stream designed to build engagement and increase customer retention. A first order will usually trigger sending of the “Little Red Book” (product descriptions and usage instructions) and a “Welcome to the Family” letter signed by Brian Frank or one of his guru partners Steve Born or Dr. William Misner.
Triggered by an array of qualifying metrics, new customers receive monthly product-focused brochures, quarterly Endurance News magazines with articles highlighting athletes of all types who have competed successfully using Hammer products, and reminder post cards with previous orders outlined to facilitate easy reorder. Invitation to join the Autoship program is packed with benefits and discounts and the Referral program has a dual benefit feature where both existing and new customer earn a discount.
An open call to any athlete to use Hammer products is made via the HammerBuck$ program which challenges customers to “Turn race day into Payday”. Over $36,000 in cash and credit was awarded to 36 winners during 2009. The program is simple, race in Hammer gear, place highly in your race, and win some cash or credits for future purchase. Talk about crowdsourcing, just think about motivating gobs of your best customers who fit your ideal profile to wear your logo on race day and give it their all to stand on the podium at the end of the day!
Look past the issue of endurance sports and you will see a sophisticated, if not home grown, communication stream that delivers on the company’s brand promise while driving business goals. There are lots of good lessons for any pure online retailer to take away from a visit to the Hammer Nutrition web site.