Transacting Business Over The Internet

March 19, 2003
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Some of the leading manufacturers in the HVACR trade continue to upgrade their Web sites in hopes of selling their products and brand names through the electronic media. But selling to end users is not the only goal behind establishing an online presence. In fact, selling comes at the end of the whole Internet “experience.”

Bill Alderson, publications and website development supervisor, Rheem Manufacturing Co., Fort Smith, Ark., said there are two main reasons for having a Web site: information and communication.

“Consumers and Rheem supply chain partners rightfully demand and expect fast and frequent access to Rheem information,” Alderson said. “However, each person enters our Web sites for different informational needs.

“A consumer may enter our Web site at www.rheemac.com to find a local Rheem dealer. A dealer may enter to download specification sheets, technical communications, tech tips, troubleshooting, etc. A distributor may want to review business development plans, review Rheem policies and procedures, download distributor branch locations, check the status of an order, check for surplus inventory, etc.

“Rheem provides contractors, dealers, and consumers a myriad of informational sites that allow quick access to information depending on their security levels. All sites cascade to the division intranet.”

Having a multitiered approach to marketing (consumers-distributors-contractors) is a welcome challenge. “Research shows that consumers are going to the Internet more and more,” said Kenny Henry, director of Information Technology for York Unitary Products Group (UPG), York, Pa. (www.yorkupg.com).

“Our Web site is designed to provide a user-friendly navigation method by using consumer, dealer, and distributor tabs to direct the respective customer to pages designed specifically for that audience. When they do go, they find more information about products and solutions than they get from some of the more traditional channels. This information leads to a more informed purchase decision and therefore sales of higher efficiency products and accessories.

“The Internet is also a portal for our dealers and distributors to our extranet site, UPG’s e-commerce site that allows customers to place orders, check inventory, process warranties, peruse our product catalogs, etc.

“We also use the Internet to tell the UPG story to interested dealers and distributors and therefore is a recruitment tool for UPG.”

Jim Jaye, e-Business and communication manager for the Parker Hannifin Corp., Cleveland, said his company has two separate Web strategies.

“Parker has a two-pronged ‘portal’ strategy to address the different needs of the contractor and the distributor/wholesaler,” he said.

“Portal No. 1 is our public information site, www.parker.com/coolparts. This site is accessible to anyone with an Internet connection. The site offers downloadable catalogs, news, and a host of other valuable information for the contractor.

“Portal No. 2 is called PHconnect and can be accessed at www.phconnect.com. PHconnect is a secured (password protected) Web site that is exclusively for existing Parker wholesaler and OEM customers. It is not available to the contractor.

Jaye said that PHconnect is intended to provide premier service by providing the following:

1. Ability to check order status and track package shipments;

2. Ability to search the Parker master catalog for product price, product availability, and product delivery promise date;

3. Ability to place orders; and

4. Ability to check current invoices and Parker Hannifin account balance.

The Air Conditioning Division of Rheem Manufacturing designed its Web site to be user-friendly for consumers. (Photo courtesy of Rheem Mfg.)
Lisa Tryson, marketing communications manager for Danfoss Inc., Baltimore (www.danfoss.com), stated, “We try to address both the contractors and end users. Contractors are more interested in the scope and features of the products.

“End users are more interested in the benefits of the product. They respond favorably to case studies, and other application stories about other end users using the products. We have selection software, full product catalogs, and corporate information available on our site.”

Joe Niemann, vice president — Emerson Climate Technologies Marketing and eBusiness, Sidney, Ohio (www.gotoemerson.com), said his company has one focus: to get the word out to all tiers of customers. “While the primary focus of our Internet strategy is connecting to and meeting the needs of customers directly served by Emerson — whether they are OEMs, wholesalers, or contractors — we are also very much aware of how our Web sites can affect how end users view Emerson Climate Technologies and our products,” he said.

“With that in mind, we are creating online destinations that are easily accessible to end users, with the hope that it will help them better understand the value and benefits provided by the Emerson Climate Technologies product line.”

Matt Brobeck, I.S. & eCommerce manager for Nordyne, O’Fallon, Mo. (www.nordyne.com), said, “Both groups are targets within Nordyne’s strategy. We target consumers by providing them online marketing material. Consumers can browse product information and review heating and cooling tips. Typically to gain knowledge, consumers perform online inquiries prior to speaking to an HVAC sales representative.

“Nordyne encourages online product registration from the consumer. This registration will be used to ensure the consumer feels important as part of a group and leads to consumer loyalty. Consumers will also have access to the location of their nearest dealer.”

Rob Zimbelman, manager, DaveNet, Lennox Industries, Dallas, said that Lennox’ Internet strategy “targets every point along the distribution channel including the end consumer. This is accomplished through a series of Web sites, each specifically targeting its own unique audience.

“One example is the Lennox dealer network. Lennox’s dealer-direct distribution model has allowed us to service a large online community of contractors and dealers through a secure e-commerce Web site called DaveNet.

“Lennox is strengthening relationships with builders and homeowners by leveraging the Internet to offer a better way to drive upgrades in the new home market. This industry-exclusive Web site educates homeowners on the benefits of upgrading while maintaining, protecting, and presenting builder-specific information.

“Lennox also targets end users with its consumer-facing Web site, www.lennox.com. The objective with this site is to showcase products by educating consumers on benefits, with the ultimate goal of driving them to the dealer locator. Lennox also has several programs put together with America Online to target end users.”

A sample page from Parker Hannifin Corp.'s Web site. (Photo courtesy of Parker Hannifin.)

The Web And The Business Model

“The Internet is an integral part in the Nordyne business model,” said Brobeck. “Nordyne will continue to leverage Internet technologies to support basic distributor business practices, i.e., equipment and parts ordering, order status, warranty claim submission, and delivery of marketing, product, and technical bulletins. In addition, the Internet will be used to solidify our supply chain. Online tools and facilities will be used to bring productivity tools to the next supply chain level: dealers.”

Jaye added, “We increasingly see the Internet as a way of providing premier service to our customers. “[By using our Web site] our customers have told us they can answer 75 percent of their routine questions without picking up the phone. They like the independence and empowerment that our information provides.

“As a result, the calls we do get now are typically much more complicated issues involving extended application expertise or high-level design considerations. In sum, what the Internet has done is free up Parker technicians and customer service people to focus on the really difficult customer challenges and questions — the things that can’t be answered off the Internet.”

That same opinion is shared by Zimbelman. “The Internet is not necessarily about technology but about speed and ease of use. It can certainly lead to growth, but only after creating a higher level of customer satisfaction.”

Henry sees several reasons why the Internet is an important business tool. “We see the Internet as an integral part of our day-to-day business model as consumer buying patterns are becoming more heavily impacted by content on the Internet. It is also a recruitment tool and will direct us to new business opportunities.”

Don Furstenburg, Rheem information technology manager, checks the diagnostic readings on a Web server. (Photo courtesy of Rheem Mfg.)

Benefits And Drawbacks

Brobeck noted that benefits of the Internet include cost reductions associated with business communications, including mailing costs for hardcopy reports. “Obsolescence of hard copy material has also been removed from the equation,” he said. “Everyone has immediate access to reports as soon as they are ready. Additionally, marketing programs are cost effectively rolled out and communicated. Other benefits include the data accuracy received through online transactions, which is typically much higher. Business partners are able to perform self-service transactions, reducing effort on both ends of the transaction.”

“If the Web site is constructed properly, it can be more efficient, and can generate an order confirmation more quickly,” Tryson added. “However, the opportunity to build a personal relationship is lost without one-on-one contact.”

Nieman outlined some of the benefits of an online presence. “For Emerson Climate Technologies, there are definitely some strong pluses associated with transacting business via Internet.” According to Nieman, these include:

  • Information quality. “By creating a one-stop resource for online information, it is easier and more manageable to add relevant material that meets customer needs.”

  • Information timeliness. “It is easier to manage the updating process to ensure that our customers have access to the most timely information, whether it be industry news or new product spec sheets.”

  • Customer convenience. “Our customers can easily access information online seven days a week, regardless of location or time of day. In today’s fast-paced, competitive business world, it is very important for them to have the most relevant and timely information when they need it.”

    “During our Internet experience, we also have encountered a few minuses, that if not given proper attention, could possibly have a negative impact on the customer experience.” According to Neiman, these include:

  • Loss of the “human touch.” “The issue with the Internet is that even with all of the pluses it provides (especially convenience), a major minus is in lack of human interaction. If left unchecked, this could weaken relationships and make them more impersonal.”

  • Misinterpreted information. “There’s a good reason why it is called the World Wide Web. Anything you put on your Web site has the possibility to be seen immediately by virtually any of your customers, no matter where they are in the world. This means there is a very good chance that information posted could be misinterpreted or misunderstood in a variety of ways.”

  • Out-of-date information. “If your Web site is not frequently updated, your customers will notice, and it could reflect poorly on your company. Web viewers seek out sites that are dynamic and rich in content. If they don’t see any value to the site on their first visit, they simply won’t come back again.”

    Brickell summed it all up this way: “Conducting business via the Internet has a large upside with little downside. The Internet makes conducting business easier, more convenient, more accurate, more efficient and more profitable. The only downside is that varying degrees of comfort still exist with using the Internet.”

    Publication date: 03/24/2003

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