"Word of mouth is the best kind of advertising"
BOL.de Managing Director Arndt Roller on the future of online bookselling
BOL.de Managing Director Arndt Roller on the future of Internet booksellingBy Carlo Bernasconi 33-year-old business graduate Arndt Roller has been involved in the brand development and restructuring of book and music retailer BOL from the very beginning. Since January 1, 2002, he has been solely responsible in Munich for the business of the German and Swiss sites of BOL, an e-commerce company of the Bertelsmann Group.
What kind of situation did you find at BOL on the first day of the new year?
Arndt Roller: I found a business that was in a steep growth phase and still is. But a growth business with a clear cost problem at the same time. My aim is to continue to promote growth and focus more on the business side without the customer noticing.
Where did you run out of costs?
Roller: The costs have not run away from us. For us, it was and is the expenses for backend and structure that have normally caused high costs. When they grow, you pay an upfront fee to be able to live off them in the future. Now it's about finding out where we can improve our margins and our contribution margins and how we can get our overhead costs under control. Then we will have a profitable business. That's the challenge for me.
BOL has invested a lot of money in marketing communication in Switzerland and has now scaled it back. Has the desired traffic already been achieved?
Roller: BOL was not a brand when we started. And the aim was to create awareness in a fast-growing market within a very short space of time. Hence the very clear conclusions: We advertise offline, in TV commercials and radio spots. You can't do this with the same intensity for years, but there is a clear time frame after which you have to take a step back. That's what we're doing now.
How do you further strengthen the brand?
Roller: We have built up a large customer base in Switzerland and good brand awareness in a very short space of time. The goal for us now is to win new customers and focus our marketing investments, less visibly, on our existing customers, and for us that means a stronger online presence. You can see us on Blue win.ch, on Blick.ch. We no longer see ourselves on TV, but occasionally in print. It's not that we're doing without it completely. What we will no longer do is have a permanent TV presence because we can no longer afford it and no longer want it.
How much does a new customer cost you?
Roller: We do not make this information public. We believe that we are very efficient in our new customer business.
How do you reach new customers?
Roller: Very strongly via online advertising. We have the whole range in the online marketing mix. We work very strongly with the affiliate program. What we must not underestimate, and this is very important to me, is member recruitment through members. We have a lot of word of mouth, and that's the nicest kind of advertising because you don't have to spend money on it. If you have a good product, satisfied customers will talk about it.
How can you tell if your product is good?
Roller: There are many tools you can use to improve the quality of your
of your product. For me, the most convincing factor is the repeat order rate. How often does someone who has ordered from you come back? I'm satisfied with that. But it could be even better. So: acquire new customers cost-effectively and then regularly ensure that customers come back and are satisfied without spending a lot of money.
BOL is always listed in third or fourth place in the Swiss Internet panels. Are you satisfied with this situation?
Roller: We want to make our customers as satisfied as possible in order to derive commercial success from this. So the goal is not necessarily to become the number one in Swiss e-commerce. Of course, I could also strive for market leadership, but I don't think that would be economically viable. We would invest a lot of money in marketing, which would then not be profitable.
How high is the share of book sales in total sales?
Roller: The value is between 66 and 75 percent.
How important is country-specific content for sales?
Roller: We generate around ten percent of our sales in Switzerland with purely Swiss titles. You can't conclude from this that the importance is reduced to a tenth. Our Swiss customers attach great importance to having Swiss products on the homepage. The fact that we have moved the management of the Swiss homepage to Munich has to do with business reasons that are of no interest to Swiss customers. This is about database management and logistics software issues. We don't have to reinvent the wheel twice.
Back to the question about BOL customers from Switzerland. Is there an urban-rural divide?
Roller: That's information I can't give you. Because I don't want to talk about the composition of our customer structure - for obvious competitive reasons.
What growth rates are still achievable in e-commerce after the collapse of the Internet boom?
Roller: I can clearly say that BOL has never experienced zero growth. Last year, we achieved clear double-digit growth in Switzerland. The Swiss book trade, like the German book trade, is currently stagnating. But the e-commerce sector is excluded from this. Our target for Switzerland this year is double-digit growth.
BOL will remain a purely online business and will never be converted into a click & mortar company? You could rent space at Coop, for example...
Roller: (laughs) I'm like James Bond and never say never. But for the foreseeable future, we will concentrate on what we do best: Online mail order. We won't be putting our resources into a business that we still know little about.
What kind of situation did you find at BOL on the first day of the new year?
Arndt Roller: I found a business that was in a steep growth phase and still is. But a growth business with a clear cost problem at the same time. My aim is to continue to promote growth and focus more on the business side without the customer noticing.
Where did you run out of costs?
Roller: The costs have not run away from us. For us, it was and is the expenses for backend and structure that have normally caused high costs. When they grow, you pay an upfront fee to be able to live off them in the future. Now it's about finding out where we can improve our margins and our contribution margins and how we can get our overhead costs under control. Then we will have a profitable business. That's the challenge for me.
BOL has invested a lot of money in marketing communication in Switzerland and has now scaled it back. Has the desired traffic already been achieved?
Roller: BOL was not a brand when we started. And the aim was to create awareness in a fast-growing market within a very short space of time. Hence the very clear conclusions: We advertise offline, in TV commercials and radio spots. You can't do this with the same intensity for years, but there is a clear time frame after which you have to take a step back. That's what we're doing now.
How do you further strengthen the brand?
Roller: We have built up a large customer base in Switzerland and good brand awareness in a very short space of time. The goal for us now is to win new customers and focus our marketing investments, less visibly, on our existing customers, and for us that means a stronger online presence. You can see us on Blue win.ch, on Blick.ch. We no longer see ourselves on TV, but occasionally in print. It's not that we're doing without it completely. What we will no longer do is have a permanent TV presence because we can no longer afford it and no longer want it.
How much does a new customer cost you?
Roller: We do not make this information public. We believe that we are very efficient in our new customer business.
How do you reach new customers?
Roller: Very strongly via online advertising. We have the whole range in the online marketing mix. We work very strongly with the affiliate program. What we must not underestimate, and this is very important to me, is member recruitment through members. We have a lot of word of mouth, and that's the nicest kind of advertising because you don't have to spend money on it. If you have a good product, satisfied customers will talk about it.
How can you tell if your product is good?
Roller: There are many tools you can use to improve the quality of your
of your product. For me, the most convincing factor is the repeat order rate. How often does someone who has ordered from you come back? I'm satisfied with that. But it could be even better. So: acquire new customers cost-effectively and then regularly ensure that customers come back and are satisfied without spending a lot of money.
BOL is always listed in third or fourth place in the Swiss Internet panels. Are you satisfied with this situation?
Roller: We want to make our customers as satisfied as possible in order to derive commercial success from this. So the goal is not necessarily to become the number one in Swiss e-commerce. Of course, I could also strive for market leadership, but I don't think that would be economically viable. We would invest a lot of money in marketing, which would then not be profitable.
How high is the share of book sales in total sales?
Roller: The value is between 66 and 75 percent.
How important is country-specific content for sales?
Roller: We generate around ten percent of our sales in Switzerland with purely Swiss titles. You can't conclude from this that the importance is reduced to a tenth. Our Swiss customers attach great importance to having Swiss products on the homepage. The fact that we have moved the management of the Swiss homepage to Munich has to do with business reasons that are of no interest to Swiss customers. This is about database management and logistics software issues. We don't have to reinvent the wheel twice.
Back to the question about BOL customers from Switzerland. Is there an urban-rural divide?
Roller: That's information I can't give you. Because I don't want to talk about the composition of our customer structure - for obvious competitive reasons.
What growth rates are still achievable in e-commerce after the collapse of the Internet boom?
Roller: I can clearly say that BOL has never experienced zero growth. Last year, we achieved clear double-digit growth in Switzerland. The Swiss book trade, like the German book trade, is currently stagnating. But the e-commerce sector is excluded from this. Our target for Switzerland this year is double-digit growth.
BOL will remain a purely online business and will never be converted into a click & mortar company? You could rent space at Coop, for example...
Roller: (laughs) I'm like James Bond and never say never. But for the foreseeable future, we will concentrate on what we do best: Online mail order. We won't be putting our resources into a business that we still know little about.
