Sramana Mitra: How did you build the corporate business? What was the go-to market strategy and customer acquisition strategy on the corporate business?
Tony DiCostanzo: Going back to the epiphany moment, the other entrenched players in the book space weren’t adequately servicing the corporate buyers. At that point, I realized that the biggest opportunity is getting in targeting those disgruntled customers. These are the ones that go to Barnes & Noble with an order for hundred copies of a title and the response they get is, “We only have four in stock.” They call Amazon and Amazon is unable to tell them when the hundred copies will arrive, because they’re fragmented in 20 different warehouses. For us, it was important to be visible to that buyer in the decision making process.
The easiest way to do that was through an online advertising strategy. AdWords back in 2009 was how we initially targeted that buyer. The first thing we did was master keywords and questions people type into search engines to find places to acquire books in bulk. It was extremely powerful for us and within about three months, we tripled revenues out of just AdWords.
Sramana Mitra: Is that still a core customer acquisition strategy?
Tony DiCostanzo: It does still translate to about 20% of our new customer acquisition.
Sramana Mitra: What are the other customer acquisition strategies that have worked for you?
Tony DiCostanzo: Now that we’ve expanded our name recognition and strength in the market, we’re doing quite a bit of referral programs. We also have traditional online affiliate marketing program. Of course, social media is becoming an increasingly strong area for acquiring customers. Last year, we added outbound sales. Instead of making the customer come to us, we’re now reaching out. That’s becoming a powerful sales tool.
Sramana Mitra: Now that you are a lot more mature, what about merchandising? What kind of catalog do you maintain on your site and how do you decide on what publishers to build relationships with?
Tony DiCostanzo: It’s challenging from a merchandising standpoint because of the number of products that is available not only now but also the number that becomes available every year and every month. It’s shocking when you look at how many tens of thousands of books come out every year. For the publishers, it’s almost a shotgun approach where they put out all the content and see what sticks. For booksellers like us, it’s problematic, because there’s thousands and thousands of books that we have to look at every year and decide which ones make sense for our market.
Generally speaking, we’ve taken the standpoint that we choose certain publishers that we’ve had tremendous amount of success with in their product lines. Random House, Harper, and Penguin are generally much better at filtering out the books that are going to gather momentum. They do a better job publicizing them. People are more aware of titles from those publishers. For all intents and purposes, we don’t filter it. We just add everything from the major publishers.
When you start getting down to two to four publishers, there is a lot more obscure content – books about arts & crafts and things of that nature that tend not to be bought in bulk. They’re more of a consumer product. We tend to filter some of that out. At the end of the day, we also don’t limit our customers from buying those products. We may not feature them on the website, but we also have product and quote request forms that people can complete online for products they don’t find.
The number of products we have available is into millions through the relationships that we have in place with publishers. In terms of what we feature online, it’s closer to 500,000 SKUs. Over the next six months to a year, we’re bringing that up to a million just to make as many different book titles available to our customers without having that friction point of filling out a form. That is a big problem because of the number of books that are available.