Doing  what  you‘ve  always  doneis no longer an option.Digital Marketing at Distrelec.

Markus DobbelfeldCMO, Datwyler Technical Components & Distrelec Group

June 3, 2014

– Head of E-Commerce, Hilti North America– Head of Global E-Business, Hilti Lichtenstein– Senior Manager, Online Banking, Credit Suisse– Senior Marketing Group Director, Central Europe, Adobe Systems– Chief Marketing Officer, Dätwyler TeCo & Distrelec Group

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About meMarkus Dobbelfeld

– Focused industrial supplier with global presence – Leading positions in global and regional market

segments – Revenue of more than CHF 1,400 million – 7,000 employees – Established in 1915 – Listed on the SIX Swiss Exchange, Zurich– Two divisions:

– Technical Components, 2’000  Employees,  CHF  720  million

– Sealing Solutions,5’000  Employees,  CHF  680  million

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About DätwylerGroup Overview

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DatwylerTechnical Components

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Technical Components Distribution and Sales Locations

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Distrelec Online Distribution Our Market

– B2B, Continental European market volume USD  3‘000  mio.– Competitors: Electrocomponents (GB), Premier Farnell (GB), Digikey (US),

Mouser (US), Conrad (DE)

Distrelec GroupOur Services

– Online distributor with optimised logistics

– We specialise in small and medium-sized quantities

– B2B trading of MRO products

– Comprehensive product ranges

– 250,000 products in portfolio

– Outstanding availability of 98%

– Delivery within 24 hours

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World is changingWe are always on

Differentiators have become commodities

Channel shift in sales & communications

Internet enabled price visibility

Customer journey more complex

Shift from traditional to digital media

Distrelec Starting PositionFor today’s  marketer,  the  sweet  spot  is  a  moving  target

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Distrelec New E-Platform & Digital MarketingVideo

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DE: http://youtu.be/I0A0LsVDVG0

Relentless Demands– Profitable growth & operational efficiency– Need for organic and inorganic growth– Agility to capture opportunities quickly

Higher Stakes– Requirements to acquire and retain customers most important– Synchronize end-to-end customer experience– Use data and technology for real-time marketing impact

Smaller SOW– Flat or declining market share– Harder to obtain and keep new customers and sell more to existing ones

Higher Customer Expectations– Relevance is here to stay– Consumers’  expectations for relevant experiences– Consumers still expect value, trust, quality and better customer service

More complex environmentCompeting priorities & changing consumer behaviors

To achieve substantial change, need to do 3 things to transform marketing;Fundamentally change the marketing operating model (done)

– Improve innovation and internal capabilities– Drive significant shift in organizational culture so that consumer relevance

at scale becomes a key operating principle shared by all departmentsBuild new skills internally (done)

– Hire, upskill and redeploy people to improve efficiency and agility– Need talent that can create consistent, multichannel experiences

Drive digital orientation throughout the enterprise (ongoing)– Improve marketing performance & reduce complexity– Digital orientation cannot remain only a province of marketing– Entire organization needs to understand how digital is transforming the

customer experience– C-suite needs to give digital orientation greater importance by embracing

horizontal collaboration

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The new Marketing Agenda – Increase in customer expectations and channel preferences

Hack the Org Chart– The driving force are the people. Nurture and empower your talent

Redefine processes and foster collaboration– Developing collaborative processes among cross-functional teams

Identify and eliminate bad habits– Refuse to languish in legacy

Become a master of modelling– Take ownership of consumer insights and business intelligence

Be a leader– Challenge the status quo and embrace change, champion collaboration

Keep your eyes on the trends, but your feet on the ground– Allow innovation to emerge from a structured marketing machine

Digital MarketingSteps To Digitally Align Your Organization

Marketing ExcellenceTo remain competitive we must adapt to changing customer behaviours and deliver a personalized experience across all channels and touch points.

Demand Generation

Engine

Multi-Channel CommerceTo stay relevant we must offer value added services and state-of-the-art e-commerce.

E-Platform

Up-skill & Focus-shiftTo drive demand and conversion we want to build a highly skilled marketing organization, capable to adapt to changing customer demands.

Organization

Conclusion - Provide for Marketing Excellence

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New Marketing SetupSummary

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What we want to achieve

– We want marketing to become a demand generating unit– We want to support sales in their campaigns– We want to develop and maintain the best e-platform

How we organize ourselves

– We will organize ourselves around 3 main tasks:– E-Platform (Technology)– E-Business (Demand Generation)– Marcom (Branding & Public Image)

What are our measures of success (KPIs)

– Sales and sales growth per channel– Conversion rates– Costs per acquisition/sale– Return on marketing investment

What will change / What will be better than before

– We will have a functional marketing department– We will build up competency in e-marketing– We will generate demand and drive sales– We will ensure consistent master data– We will provide a globally scalable E-Platform

– Sept 2011, Acknowledgment of changed market conditions (starting point)– Nov 2011, Change Vision & Strategic Planning– May 2012, Investment approvals (resources, technology, etc.)– July 2012, Implementation planning– Sept 2012, Functional reorganization– Since, Change management (communicate, empower, culture, etc.)

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TimelineChange Management

YesterdaySolid marcom practice with efficient catalogue and media production.Sales pitch:  ‘one-size-fits-all’.

FutureDemand generation and sales development through digital marketing automation.Sales  Pitch:  ‘personalized’  through  insights.

Aspired Marketing ConditionUp-skill and shift focus

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Demand Generation

Publications

Online Marketing

Sales Promotions

Relationship MarketingPublic Relations

Search Marketing

Business Intelligence

Customer Intimacy

Distrelec Future

Distrelec Yesterday

Distrelec MarketingRoles & Objectives

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BrandDevelop the brand and public image

IntelligenceProvide real-time business intelligence

ChannelsOperate a multichannel

commerce platform

DemandCustomer acquisition

and conversion

DataProvide for master data systems

Demand Generation Engine - Deployment of integrated marketing tools to drive demand and conversion

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Demand Generation EngineShift to Digital Media

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Digital(Online)

Traditional(Offline)

Distrelec Marketing: TasksHigh Level Target State

Marketing

E-Platform

Operations

ProductData (4)

CustomerIntegration (2)

E-PlatformSupport (3)

Development

Project Mgmt(2)

Web Development

(7)

WebDesign (1)

E-Business

Demand Generation

CampaignMgmt (3)

SEM / Bid Mgmt (4)

SEO (2)Pilots/Mirrors

E-MailMarketing (4)

Re-Targeting Affiliates &

Price Portals (2)

Shop Management

Merchandizing &

Recommend. (2)

Search/Usability

Test & Target (2)

Retention Loyalty Mgmt

(1)

Mobile Commerce (1)

Marcom

Publications

ChannelMarketing (2)

(E-)SeminarsTS/Events (2)

PublicRelations (2)

Social Media & Community

(2)

Business Intelligence

• Generate demand, attract, engage & retain customers. Drive ROI from online marketing programs and increase sales funnel conversion.

• Ensure operations and further development of global, multichannel E-Platform: Webshop and application ecosystem, PIM, marketing applications, customer and supplier integration.

• Conduct marketing communications, improve & maintain public image. Create catalogues and print collateral. Drive channel marketing and engage community.

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Marketing

E-Platform

Operations

ProductData (4)

CustomerIntegration (2)

E-PlatformSupport (3)

Development

Project Mgmt(2)

Web Development

(7)

WebDesign (1)

E-Business

Demand Generation

CampaignMgmt (3)

SEM / Bid Mgmt (4)

SEO (2)Pilots/Mirrors

E-MailMarketing (4)

Re-Targeting Affiliates & Price

Portals (2)

Shop Management

Merchandizing & Recommend. (2)

Search/UsabilityTest & Target (2)

Retention Loyalty Mgmt (1)

Mobile Commerce (1)

Marcom

CataloguesPublications (6)

ChannelMarketing (2)

(E-)SeminarsTS/Events (2)

PublicRelations (2)

Social Media & Community

(2)

Business Intelligence

E-Business• Revenue & growth• ROMI (attributable

revenue minus campaign invest)

• AOV/AOI (Average order Value / Items), BCR (Basket Category Ratio), DSR (Displayed/sold Ratio)

• CPL/CPO (Cost Revenue Ratio)

• Conversion, growth & customer retention

E-Platform• Availability and performance of

systems and services• Performance with typical queries• Throughput time and data quality

(new product go-live, etc. –shared KPIs > PM)

• Ratio of fully automated scripts and order passages

• Data Integration KPIs (new/updated product data, performance of interfaces)

• Service Quality, Data Governance & Support KPIs

Marketing Communications• Public Image and Brand

awareness• Publications: revenue and

contribution margin per catalogue page (shared KPI with CM)

• Customer satisfaction e.g. NPS (Net Promoters Score) or «Fans», CLV (Customer Lifecycle

• Value), Customer Satisfaction Index (CSI)

• Community engagement index

Top 5 Marketing KPIs - Drive sales, build revenue, improve retention, optimize spent and ROMI

Functional Marketing OrganizationDigital Marketing & E-Platform Operations

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Marketing OrganizationFunctional setup with specialist functions

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E-Platform(Technology)

Business Intelligence

E-Business(Digital Marketing)

Marcom(Image/Brand)

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Job Descriptions with clear accountability, lines ofinteraction and KPIs

Marketing Process Workflows - Cross-functional alignment between Sales, CM and Marketing (incl. ISO)

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Marketing Technology (E-Platform & Ecosystem)Operations & Development

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We are creating one core E-Platform. We invest into People, Technology, Processes and Channels

Suppliers

Procurement Supplier ProductManagers

Marketing-Managers

ProductCatalogue

BrochuresFlyers

DirectMailings

DigitalCatalogues

Vendors

Content Managers

Sales

PIM

CRM

CMS

VariousERPs

Other internalSystems

Online Shop(Brand n)

Mobile Shop

Third Parties(e.g. Google Search,Market Places, etc.)

Online Shop(Brand 1)

Call Center

E-MailCommunication

Distrelec CoreE-Platform

(for Commerce & Services)

New E-PlatformGlobal Rollout in 2014

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DAM

ETL

Font Server

Live Chat

ERP

Video

E-Platform ArchitectureAbstract System View

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Multivariate Testing

E-Procurement

Bid Mgmt. / SEM

Mail

E-Mail Marketing

Recommendation

Faceted Search

Web Analytics

PIM Payment

E-Commerce Platform

Online ShopMobile

Market Monitoring

Market Places

Fit Server

Mobile Native App

Co-Browsing

Search Engines

Shop

OCI

Data Quality

Tag Management

Mobile Site

Mobile

Report

MRMCRM

Transaction Middleware

Service LayerRouting Layer

ERPERP

Publication

CMS

BI-Warehouse

E-Business – Demand GenerationField & Category Marketing

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Cross-Functional Collaboration - The three sales relevant functions heavily rely on each other

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• GTM plans• Resource allocation• Innovation• Market opportunities• Value proposition

• Aligned go-to-market• Customer campaigns• Leads nurturing

• Merchandizing• Product Campaigns• Channel Marketing

• Product opportunities• Global/local Pricing• Product promotions• Product strategy

• Acquire new customers• Develop existing customers

and increase share of wallet• Segment customer types and

define value propositions

• Attract, engage & retaincustomers across channels

• Online marketing and E-Business operations

• Marketing Communications

• Maintain and develop attractive product portfolio

• Sourcing/Procurement• Secure high margins• Ensure high availability

Marketing

Sales

Category Management

Adapting the Marketing Organization to support cross-functional interests and collaboration

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• GTM plans• Resource allocation• Innovation• Market opportunities• Value proposition

• Aligned go-to-market• Customer campaigns• Leads nurturing

• Merchandizing• Product Campaigns• Channel Marketing• MDF• Price crawler• Extended assortment

• Product opportunities• Global/local Pricing• Product promotions• Product strategy

• Acquire new customers• Develop existing customers

and increase share of wallet• Segment customer types and

define value propositions

• Attract, engage & retaincustomers across channels

• Online marketing and E-Business operations

• Marketing Communications

• Maintain and develop attractive product portfolio

• Sourcing/Procurement• Secure high margins• Ensure high availability

Marketing

Sales

Category Management

Category Marketing4 FTE acting as attorneys

representing interests of product

Field Marketing4 FTE acting as attorneys representing interests of

country

E-Business – Demand GenerationSearch Engine Marketing (SEM)

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Search Engine MarketingFocus & Setup

– Drive Sales (Direct Response)– Customer Retention (Remarketing)– Brand Awareness (Specific markets)

– International team of SEM Specialists with several years of experience– Whole assortment accessible,  250’000  products– 17 markets– 15 languages– Google (AdWords), Microsoft Bing (Ads)– 7 Mio. keywords over all accounts– Bid Management (intelliAd)– Strong performance orientation: focus on ROI (CRR)– Cost-revenue-ratio: 9.5

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Importance of Videos for SEORich & Relevant Content

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– Established a 360° Spin-Photography and high-end Video Studio

– Video has become a must-have feature for competitive SEO

Distrelec (paid)

Distrelec (paid)

Distrelec (organic)

Video (organic)

E-Business – Demand GenerationE-Mail Marketing

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E-Business – Demand GenerationE-Mail Marketing

– Serving 20 markets in 17 languages– Introduced new E-Mail practice, complete

redevelopment, new & responsive design utilizing latest technology (personalization, whitelisting, analytics).

– Deployed additional E-Mail Types & triggered and automated e-mails.

– Introduced a category based segmentation of all recipients and an industry selection for new users.

– Implemented an analytics based workflow and scheduling to achieve maximum deliverability.

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E-Business – Demand GenerationCustomer Experience (Onsite Search)

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E-Business – Demand GenerationCustomer Experience - Search Intelligence

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Conversion optimization efforts in regard to on-site search, overall usability and improved customer experience on Distrelec’s online touchpoints.– Analysing user behaviour– Visits with Keyword Search: 64%– Conversion Rate with Search: 8,69%

E-Business – Demand GenerationOnline Marketing (Web Merchandizing)

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E-Business – Demand GenerationOnline Marketing (Web Merchandizing)

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– Countries (DE, CH, AT, IT LT, LV, EE, PL, FI, CZ, SK, HU, DK, NL)– Sales/Brand Campaigns – Promoboxes, Rotation Banner, Landing pages, etc.– Recommendations, Cross- & Upselling

E-Business – Demand GenerationBusiness Intelligence

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Marketing CommunicationsBranding & Public Relations

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The bigger, better digital budgetShift from Sales to (digital) Marketing

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– Heaviest investments are in SEA, customer experience and analytics.– Investments align with priorities to acquire and retain customers.

– Raising awareness of changed market conditions– Creating the right sense of urgency (opportunity going down)– Investment approvals on FTEs, E-Platform, Budgets– Functional  reorganization  (handling  bleeding  ego’s)– Establish performance orientation (KPI measuring)– Breaking old habits, move away from traditional approach– Cross-functional collaboration (sales, category management, marketing)– Digital orientation and education (developing expertise)

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Digital Marketing TransformationGreatest Challenges

Thank youQ&A

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