Everyone, Topbulb CEO Philip Bonello is fond of saying, has “a goofy light bulb problem” — a lamp in his or her home or office that requires some sort of odd replacement bulb which is nearly impossible to find.
With over 3,500 items in its inventory ranging in price from 29 cents to $700, this is exactly the sort of need the over-70-year-old catalog caters to fill. Of course, finding customers with pressing light bulb needs when they need the product has never been easy. Think about it: How many lists of “affluent homeowners or upscale businesses with burned-out lamps” have you seen for rent lately?
“It was a non-starter to mail to consumers,” says Bonello, noting that in the past, the company hadn’t mailed many of the 1 million pieces it sends annually beyond its core vertical business-to-business markets.
The Internet has eased East Chicago, IN-based Topbulb’s prospecting burden considerably. In the last year alone, search engine placements and other online promotions have helped the company increase the consumer share of its business to 25%, up from only 3% a year ago.
“We call our product the hardest one to market but the easiest to sell,” says Bonello. “When people find us and know we have [what they need], they almost always buy. But finding them and them finding us is the challenge.”
The company’s online business is growing 1% to 2% per month, and currently comprises about 30% of Topbulb’s sales overall. Thirty-five percent of the Web site buyers are new customers, and about half of those are consumers, says Brian Brown, marketing coordinator and Web site manager. The site (www.topbulb.com), which has been up in its current form for about two years, gets about 27,000 visitors a week.
Before Topbulb had a Web site, it mailed nearly 2 million catalogs and other pieces annually. Today, says director of marketing Tracy Meyer, besides a 68-page standard-format general catalog that covers the bulk of the product line, “Slim Jim” format books catering to niche segments like education, healthcare, automotive, safety and consumers are also sent out.
The company maintains one Web site for both consumer and B-to-B customers. The site, which stimulates catalog requests in addition to product sales, was originally built for business customers, who typically knew the code of the product they wanted and didn’t want — or need — to browse the site. As more consumers started visiting, Topbulb made the interface more user-friendly for the teeming masses, says Bonello.
Currently, the most popular products online and off are photographic and projector oriented, such as lights for LCD projectors. The company sees large retailers such as OfficeMax and Home Depot as competitors, as well as other niche players like Bulbtronics and small companies that buy bulbs in bulk and market to local retailers. “They don’t have the breadth of service and reach, but they’re still going after the same dollars,” says Bonello.
Despite its online success, the company isn’t pushing print catalog customers to convert into online-only shoppers.
“The best buyers are the people who speak to us, where we have more interaction and can build a rapport and have better opportunities to upsell and explore needs and solve problems,” says Bonello. “We, like I think a lot of catalogers, discovered that people spend less when they’re shopping on the Web than they do if they’re talking to a person. We encourage anybody who visits our site to call.”
Indeed, the company’s phone number is included on every Web and print catalog page, as phone orders are usually 15% to 20% higher than ones from the Web. The in-house phone reps receive a few weeks’ training before they go “live,” including reviewing the catalog listings, working in the warehouse and monitoring an experienced representative on the phone.
“We also meet every other week to see what we can do to be ‘best of breed’ in supplying good customer service,” says Bonello, who was previously with Metromail for 12 years.
One problem the 10 full-time reps run into is that customers calling in sometimes don’t know exactly what they need, because they might just have a fragment or piece of an old bulb. Reps are trained to ask questions like whether a lamp has any identifying marks on the base, the physical dimensions of the lamp and what the filament looks like. To further help consumers, two pages in the front of the print catalog are devoted to a glossary of lamp terminology and illustrations of various bulb shapes and bases labeled by the corresponding code or name.
Topbulb is busiest in the third and fourth quarters, with business fueled not only by the education market’s need for products like general lighting and audiovisual bulbs, but by the fact that in North America, the days get shorter in the fall so there’s a greater need for the product.
About 30% of the nearly 100,000 names on Topbulb’s house file are multi-time buyers, says Meyer. Compared with many other catalogers, the company has a long period for what it considers “active” buyers — 36 to 38 months. Customers may be dormant for quite a while, but then come back every few years to replace bulbs on a regular basis. To keep Topbulb in their mind, the cataloger does supplemental mailings in addition to its catalog, including thank-you notes, special sale notices and promotions for special sales or holiday lights.
“I think customer retention is more important to us than many other catalogers,” says Bonello. “[Because our customers] are so hard to find, retention becomes all the more imperative.”
There is some B-to-B/consumer customer crossover. After all, business people buying bulbs for their offices do go to homes with lighting needs at night. But while some customers use the print catalog as a reference tool, cross-sell opportunities are minimal because the book — page after page of listings of bulb ordering codes broken down by volts, amps and cost — isn’t really browsable.
“If you’re buying a light bulb for doing ear exams, you’re not exactly interested in something for your porch,” says Bonello. “[But] if we get to speak with someone, we can suggest ‘Do you need bug lights, or how’s your garage being lighted?”
Light bulbs are “low involvement and certainly not a sexy product,” he says. People take light bulbs for granted, and don’t think about the product until it stops working. “It’s technology that people don’t consider technology.”
Because people don’t generally give light bulbs a lot of forethought, the company ships a lot of rush orders. “Having inventory is often the key to making a sale or not making a sale,” says Bonello. Topbulb does its own fulfillment, says Meyer, and 98% of orders are shipped on the same day they are ordered.
E-mail has helped create a bit more involvement to get consumers thinking about their lighting needs. Meyer, who had been with Sears before joining Topbulb about 18 months ago, says the company e-mails both retention and sales messages to its customer file, including updates on new products and safety information on ways to protect pets or children from electrical dangers.
“It gets them more involved in the lighting process,” she says.
Premiums are also used not so much as an incentive to buy but as a “thank you” to consumers. The current catalog offers a coupon for a free pint of Haagen-Dazs with any order of $100 or more. Other premiums have included toy trucks and note pads featuring the “Bulb Dude” character created by local artist Bruce Hawkins when the company changed the name it markets under from Gray Supply to Topbulb three years ago.
The company started life selling radio and TV tubes, but morphed into a bulb supplier. The business has been catalog-driven for the last 20 years, and backed by venture capital from Northbrook, IL-based Sterling Capital for some 15 years. Bonello hopes Topbulb will keep taking advantage of “the treasure trove of marketing data” offered by online marketing opportunities.
For example, the Web has helped the company discover bulb niches it didn’t know existed. It sold black lights to dentists for years for color curing, but the product was never a big seller. As e-commerce grew, Topbulb saw requests for black lights rise. The company repositioned the product on its site and started selling many more, not only to consumers for decorations but to car enthusiasts who light the underside of their vehicles with the purple lights and businesses that use them to check ID passes for security purposes.
“We let the market define some of the opportunities for us,” he says.
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