The IDEXX ecommerce Journey Donalee Santoro, Vice President Business Operations Companion Animal Group. Lulu Santoro
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1 The IDEXX ecommerce Journey Donalee Santoro, Vice President Business Operations Companion Animal Group Lulu Santoro
2 What I ll cover Staying focused Structure and planning The journey begins Measuring up IDEXX Laboratories, Inc. All rights reserved.
3 Founded in 1983 as AgriTech Systems 1991 IPO as IDEXX Laboratories ~$1.77 Billion annual revenue Over 7000 employees More than 175 countries S&P 500 index NASDAQ -100 index
4 Our purpose: To be a great company that creates exceptional long-term value for our customers, employees, and shareholders by enhancing the health and well-being of pets, people, and livestock. Companion Animal Group (CAG) Pets Water, Dairy People Livestock, Poultry - Livestock IDEXX Laboratories, Inc. All rights reserved.
5 We are guided by 6 core principles Achieve and sustain market leadership Exceed the expectations of our customers Empower and reward employees Innovate with intelligence Cultivate entrepreneurial spirit Contribute to our communities IDEXX Laboratories, Inc. All rights reserved.
6 IDEXX has generated exceptional performance over the past 25+ years IDEXX Stock Price 1991 to 2017 (1) ($ per share) $120 $100 $80 $60 $40 $20 $0 (1) Monthly stock price ending February, 2017, adjusted for dividends and stock splits IDEXX Laboratories, Inc. All rights reserved.
7 The journey begins
8 Our journey began with a vision to get closer to our customers Product-Centric Product-centric model Territory-Centric Distribution model for recurring revenue Hospital-Centric Fully direct customercentric model Distributor ecommerce IDEXX ecommerce IDEXX Laboratories, Inc. All rights reserved.
9 Customers were enjoying an online ordering experience with their distributor; parity was a must Market research guided our understanding of the current customer experience and informed our high level objectives IDEXX Laboratories, Inc. All rights reserved.
10 Low Customer Effort Pleasing Experience High Adoption IDEXX Laboratories, Inc. All rights reserved.
11 Structure and planning
12 We engaged industry experts to help us ensure functionality, scalability, and sustainability and avoid organizational bias External consulting partners Former Senior VP Corporate Marketing and ecommerce IDEXX Laboratories, Inc. All rights reserved.
13 Strong partnership and collaboration across the team is essential; focus on roles, not the number of people Product owner responsible for the strategy, platform roadmap, capabilities, requirements development, primary interface with IT Brand Owner Brand owner responsible for consistent look and feel Digital Marketing responsible for site marketing, personalization, descriptions, hierarchy, positioning, awareness, adoption, utilization IT Project Owner Product Owner Digital Marketing Channel revenue owner responsible for demand generation through the system IT project owner responsible for system implementation of the roadmap, system uptime and reliability Channel Revenue Owner IDEXX Laboratories, Inc. All rights reserved.
14 Our current platform is an on-premise solution; which has limitations compared with a cloud-based solution V.S. Technical debt maintenance of platform Expensive delivery of functionality Infrequent releases Low technical debt low maintenance Out of box functionality Frequent releases IDEXX Laboratories, Inc. All rights reserved.
15 An informed roadmap delivers functionality that resonates with customers; at a pace that can be adopted CAG Customer Insights Based on current IOO users (n=1207) *majority = 80% or more Q. Approximately what percentage of the time do you order using idexx.com/orders Q. Why don't you place all of your IDEXX orders online? IDEXX Laboratories, Inc. All rights reserved. The fastest and easiest way is to use the online system. I can see my history and expiry dating on product to make better stocking decisions. I do not like to call in and have to work through the phone tree. **types of assistance broken out on the next page Based on those who order <100% online (n=586) Text highlight green = significantly higher IDEXX Laboratories, Inc. All rights reserved IDEXX Laboratories, Inc. All rights reserved. Methodology Surveys are IDEXX-branded customers know they are doing the survey for IDEXX. Invitations were sent to all active IOO users, lapsed users and non-users. Active and lapsed users were ed a survey invitation with a link to the online survey were sent an invitation and 1207 responded for a response rate of 9%. [Margin of error: +/- 2.7] We faxed the survey to non-users, realizing technology could be a barrier, since they re not currently ordering online were sent an invitation and 364 responded for a response rate of 11%. [Margin of error: +/- 4.8] To maximize response rate, respondents were entered into a drawing to win 1 of 20 $100 Amazon gift cards. IDEXX Online Order Experience February 2017 Surveys were in the field from February 8-24, Over 80% of survey respondents place the majority* of their orders online, which is their preference. They call when they need assistance. 100% 81-99% 50-80% Less than 50% % of Orders Placed Online 10% 8% 36% 46% Why not 100% Online? Total <50% 50-80% 81-99% (n=586) (n=54) (n=111) (n=421) Call when assistance is 54% 15% 42% 63% needed** Preference/easier to call 21% 52% 34% 14% IDEXX contact us 18% 7% 10% 22% Technology limitations 7% 6% 11% 7% Getting familiar with IOO 6% 24% 13% 2% Website is difficult to navigate 5% 15% 2% 5% Want to ensure order is right 3% 6% 4% 2% To expedite order 1% - - 1% Need to order while driving 1% 2% 2% 0% Assistance ranges from product questions, to help finding certain products, help with discounts, etc. If I have a question about something I'm ordering, I like to get a quick answer, and that's just simpler if you are talking to a person. Types of Assistance Needed Based on those who order <100% online (n=586) 27% Some of the IDEXX products we use aren't available online, instead the website directs us to call in the order. 15% Checking and using points. Call when I have Call when I can't find Credit for expired Call support and order at Triple questions something products/points/specials the same time backorder I love the ease and convenience of online ordering, you've If I need to request credit for expired product, I done a great job making the website easy to navigate! The only have to call in to have it applied to a reorder. The time I call is if I have a question. website doesn't have that capability. 9% 8% The majority of products I order online but last time I needed to order Sedivue products they were still unavailable to order online, if they are all available to order online then I will order everything online. Occasionally I have questions about order and after speaking with rep she offers to put order in for me. I think it's great that she is willing to do this for us 2% 1% Call to add something to order Launched WLPD and International sites Launched US CAG site Promo codes and Points Sales ordering in Customer Support Portal Added Reference Lab Supplies Scheduled Orders Simplified registration Frequently Ordered Products Homepage redesign Added Practice Supplies Improved search Site redesign w/ mobileresponsive UI Shipping policy updates New marketing capabilities Single sign-on integration w/ other IDEXX properties Offline ordering User survey Call to order User survey Large initiatives New capabilities User experience IDEXX Laboratories, Inc. All rights reserved.
16 Key performance indicators ensured we measured the critical few; informing marketing efforts and roadmap development Drive awareness and adoption User-centric redesign to further adoption Integrated, low effort experience Monthly site traffic Registrations Percent of direct revenue Customer satisfaction Customer satisfaction Percent of direct revenue Percent of orders Percent of customers ordering Percent of direct revenue Customer Satisfaction 2015 Standing up the platform 2016 Improving the experience 2017 Maximizing the capability IDEXX Laboratories, Inc. All rights reserved.
17 An integrated and targeted marketing plan supports desired results 2015 Standing up the platform 2016 Improving the experience 2017 Maximizing the capability IDEXX Laboratories, Inc. All rights reserved.
18 Staying focused
19 Prior to the launch of our ecommerce site, IDEXX already had several independent digital properties Social Media Idexx.com ILC Phone A confederation of digital sites, each with a unique customer experience and technology platform, which lead to an unintentionally high effort experience for our customers VC IDEXX Laboratories, Inc. All rights reserved.
20 a digital identity project was re-initiated in 2016 with a new strategy and vision to create an integrated digital experience Online Orders RELATIONSHIP Facilitate use of all sites with easy access Personalized experience on sites Customized access and self-service capabilities IDEXX. com ILC Points BillTrust MyIDEX X CURRENT STATE Siloed sites with multiple logins required No unified, consistent navigation between sites Fragmented digital approach to engaging users VC+ IDENTITY Simplified, universal registration One login using address Ability to view and update profile information in one place from anywhere Live 2 days ago! IDEXX Laboratories, Inc. All rights reserved.
21 Measuring up
22 We measure against our KPIs monthly with a dashboard that informs on our progress against our goals Online Orders Monthly Dashboard Jan Current Month vs. Previous Month vs. Previous Year Month YTD vs. YTD Forecast Goal Highlights o Monitoring against KPIs helps with course correction if needed o Monthly dashboard shared broadly across the commercial organization and IT partners KPI Key Performance Indicator Experience Orders Users Traffic 1 Total Visits 97, % + 73% 97,573 Unique Visitors 29, % + 22% 29,831 New Registrations % + 6% 585 Unique Customers Ordering 10, % + 26% 10,919 % of Direct Customers 57% % % Ordering Total Orders 39, % + 41% 39,320 % of Direct Orders 58% % % and Practice Supplies increasing Online Orders to 62% and Monthly 57% respectively Dashboard Feb Total Revenue (M) $23.4 $ % + 41% RA/VetLab/Practice Supplies $6/$17/$0.2 $6/$17/$0.2 % of direct IHD revenue increased 2 pts due to increases vs. vs. Current Previous YE YE % of Direct IHD Revenue 67% % % in customers, orders, & revenue Mitigation Highlights Previous YTD Forecasted (if >3% Month Year Goal Month Goal below goal) Satisfaction 97% % % Satisfaction remains high Month at 97% Total Visits 92,212 1 outage on - 3% Jan. 4 for 4hrs + 55% due to System Uptime 99.5% ,785 Traffic and new registrations Common Middleware Services were flat or slightly down after Unique Visitors 28,814-3% + 16% 46, IDEXX Laboratories, Inc. All rights reserved. the ISR Fax-to-IOO initiative Internal use only. New Registrations 495-9% - 15% 1,080 ended first week of Feb. driving 96 of the 495 new registrations Unique Customers 10, % + 20% 12,419 Ordering % of all direct orders increased % of Direct 57% % 61% 61% 2 pts. to 60% due to RA, Customers Ordering VetLab, and Reference Lab Total Orders 37,471-5% + 19% 76,791 Supplies increasing to 59%, 64%, and 63% respectively % of Direct Orders 60% % 68% 68% Traffic Users Orders Experience Total Revenue (M) $24.1 RA/VetLab/Practice Supplies $7/$17/$0.2 Double-digit traffic increases in Jan. due to increases in new registrations and users ISRs were heavily focused on IOO in Jan, reaching 50% or 2k of the order-by-fax accounts with significant contribution to new customer registrations % of direct orders decreased 1pt due to IHD with % of Ref Labs + 3% + 22% Online $47.5 % of direct IHD revenue Orders Monthly Dashboard March 2017 $13/$35/$0.3 remained the same at 67% % of Direct IHD 67% % 75% 75% vs. Satisfaction increased to 99% in Revenue vs. Current Previous Feb. based on 69 responders YE YE Mitigation Highlights Previous YTD Forecasted (if >3% Satisfaction 99% % 97% Month 97% Year and quick, easy experience Goal Month Goal below goal) Month System Uptime 100% % No outages in Feb. Traffic up 13% in March as a Total Visits 104, % + 60% 294,279 result of 5% increase in unique 2017 IDEXX Laboratories, Inc. All rights reserved. customers ordering and 16% 1 Unique Visitors 31, % + Internal 20% use only. 64,801 increase in total orders New Registrations % - 26% 1,478 New registrations down in Unique Customers 11, % + 21% 13,314 March due to delayed launch of Ordering Digital Identity Traffic Users Orders Experience % of Direct 58% % 61% 61% % of all direct orders increased Customers Ordering 1 pt to 61% due to RA and Total Orders 43, % + 24% 119,459 VetLab increasing to 60% and 67% respectively % of Direct Orders 61% % 68% 65% See slide 2 Total Revenue (M) $27.6 $74.2 % of direct IHD revenue + 15% + 23% RA/VetLab/Practice Supplies $8/$19/$0.2 $21/$53/$0.6 increased 1pt to 68% % of Direct IHD 68% % 75% 72% See slide 2 Decrease in satisfaction due to Revenue storm shipping delays in March Satisfaction 96% % 97% 97% 3 hr. outage delay during R1 System Uptime 99.6% % launch on March IDEXX Laboratories, Inc. All rights reserved. 1 Internal use only IDEXX Laboratories, Inc. All rights reserved.
23 While we stood up our online store ~ 2 years ago, the percent of customers purchasing through our online store places us with Digital-First Firms for % of customers buying online Lagging Firms focus on ecommerce < 3 years ago Digital-First Firms focus on ecommerce > 5 years ago 60% 50% 40% 30% 20% 10% 0% ecommerce Maturity X % of Customers Buying Online 22% Lagging Firms 10% Mid-Maturity Firms 55% 55% Digital-First Firms IDEXX Fifty-five percent of digital-first B2B organizations (those that began focusing on ecommerce five or more years ago) report that more than half of their customers currently complete transactions online, compared to only 22 percent completion for lagging firms that began focusing on ecommerce less than three years ago. (Source: Accenture) IDEXX Laboratories, Inc. All rights reserved.
24 with a large portion of our revenue flowing through our online store % of Revenue Online 4.1% 18.8% 27.1% 50% Thirty-three percent of the digitalfirst B2B organizations see more than one-third of their revenue come from online sales, compared to six percent of lagging organizations. (Source: Accenture) 0-10% revenue online 11-35% revenue online 36-50% revenue online > 50% revenue online IDEXX Laboratories, Inc. All rights reserved.
25 There are several keys to success o You must have a strategy informed by customer data with a clear vision of the desired experience o Seek expertise (consult or hire) from outside to capitalize on experience and avoid organizational bias o Have a plan and continually test / measure against the plan o You should expect to get some things wrong and need strong agility to adjust IDEXX Laboratories, Inc. All rights reserved.
26
27 Proprietary rights notice IDEXX Laboratories, Inc. holds the copyright in this material. No part of this document may be reproduced or transmitted in any form or by any means, whether electronic, mechanical or otherwise, for any purpose, without the express prior written permission of IDEXX Laboratories, Inc. IDEXX is a registered trademark of IDEXX Laboratories, Inc.
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