One of the assumptions in the early days of the web was that it was a level playing field. Low entry costs allowed the little guy to compete against the big guys. Smaller businesses actually had an advantage they could move more quickly than the clueless big guys. It hasn’t quite worked out that way. But sometimes the savvy little guy does win.
Here’s how Arrow Pharmacy and Nutrition Centers, a nationwide chain of more than 100 drugstores, developed an online drugstore. Several well-funded online pharmacies were also in planning stages. Competition was intense. The Arrow chain had several advantages: its existing customer base and relationships, established distribution system, and goodwill generated by its image as a pharmacist-managed corporation.
Based on knowledge about people looking for serious answers to serious medical questions, “Your Pharmacist Recommends” became the theme for site design and for subsequent marketing (a concept that has since been copied by competitors). “Health Clinics” covering more than 120 diseases and conditions were established to provide information and community. The site was designed to be rebranded by special-interest web sites, HMOs, and supermarket chains.
The name/URL “familymeds.com” and the “triangle people” logo were developed. Site navigation was designed for both “drugstore” (general topics such as women’s health) and “disease state” (specific conditions such as arthritis) to accommodate customer shopping preferences. Site technologists built front-end e-commerce features with a back-end linked to the Arrow fulfillment system, enabling seamless prescription processing from online ordering to home delivery.
The general marketing strategy was to proceed in stages: First, build traffic and brand awareness; next, populate the customer database for remarketing; and last, integrate online and offline marketing. A parallel project involved rebranding the Familymeds site on a number of other sites. This mirrored the Arrow offline practice of locating pharmacies within clinics.
Broad audience demographics and a limited budget dictated an integrated marketing approach. Both factors worked to Arrow’s advantage. Since the business was solidly established, there was time to continually test the market and refine marketing tactics.
While it was known that the first target audience should be women, campaign results demonstrated that men typically do not get their health information from pharmacy sites. Click analysis and customer surveys showed which medical conditions particularly interested the men, then search engine optimization and media planning were used accordingly.
Costly portal deals that were the bane of DrKoop.com were avoided. Media spending was smarter and, therefore, more sustainable. Buys were made on site pages that dealt with specific health issues. For example, third-party pages that discussed the dangers of household poisons to children featured a Familymeds banner that linked to a poison- prevention page on familymeds.com. This context-based strategy efficiently delivered qualified traffic.
Click-through rates were solid but unspectacular. Interestingly, though, close monitoring of site traffic revealed that the number of unique visitors to a particular subject page increased beyond the banner click-throughs during and after a context-oriented buy. This indicated that there is a retention factor for good banners. It also indicated the importance of search engine optimization for an integrated marketing campaign.
There is intense search engine competition for health-related keywords. By organizing the site around specific medical conditions, it was possible to optimize for related terms. Learning more about target-audience interests helped enhance the optimization efforts. Search engine specialists created information pages specifically written and programmed for each condition and for each search engine. Optimization reinforced the ad-recall effect. Today, the site enjoys a steady stream of 2,000 to 4,000 visitors per week from search engine traffic.
Whereas strategic linking/registration doesn’t bring in large amounts of traffic, it does bring in very qualified traffic and link popularity is a factor in search engine positioning. One type of link that does drive high volumes of traffic: “freebie” site postings. Every special offer Familymeds makes is posted on freebie sites. As with rewards-based opt-in email, these postings bring a spike in traffic.
Public relations goals were to position Arrow President Ed Mercadante as an industry expert to support the branding campaign. Mercadante spoke at two high-profile online drugstore conferences, providing a number of media exposures that correlated with substantial spikes in both site traffic and registrations.
Traffic source and conversions were tracked and compared, enabling media optimization by gauging the effect of search engine optimization, public relations, and strategic link development. The total effect of marketing efforts were made visible by taking a comprehensive view. The overwhelming amount of traffic came from online marketing activities rather than offline advertising.
Registrations were channeled into a CRM database to forge long-term relationships with registrants to encourage the likelihood of future sales. Customer profiling and segmentation were built into the CRM system. To kick off the campaign, site registrants were surveyed for interests. Then they received a series of newsletter mailings, each with a specific user-selected theme. Since the launch of the campaign, response rates have nearly doubled.
Within four months of launch, site traffic was growing at 5 percent per week, and registrations soared beyond 200,000. Average user session-time increased from two minutes to more than seven minutes. Familymeds.com was named one of the top five online pharmacies by eMarketer (along with now-troubled powerhouses like Drugstore.com and PlanetRx both of which spent millions more on advertising).
The ultimate compliment to the success of its online business: Arrow Pharmacy and Nutrition Centers is now rebranding its company as Familymeds, Inc.