Islands are known for fostering a pretty relaxed definition of efficiency. Maybe it’s the distance from the mainland, or the lapping of the waves, or the fact that traveling any distance requires getting into a boat at some point. But people who live and work on an island—Manhattan excepted—seem to live their lives at some remove from the kind of pressures that drive us off-islanders.
The Black Dog Tavern, on Martha’s Vineyard MA, seems to have started life with pretty much that laissez-faire attitude toward life and commerce. The company began in 1971 as a 50-seat restaurant founded by Bob Douglas, a Navy captain who retired out of the service to build wooden sailing ships in the town of Vineyard Haven. He opened the place in January—a pretty good sign, in a summer vacation town, that profit wasn’t the be-all and end-all for this operation.
But by the mid-‘90s, the company was firmly established as a summertime destination among Vineyard visitors. The Black Dog had sprouted a number of other businesses, including a bakery, a catering service and most notably a general store selling apparel and merchandise, almost all imprinted with an image of Douglas’s pet black Labrador—named, yes, Black Dog. President Clinton bought gifts there for friends, including (per Congressional transcripts) Monica Lewinsky.
With its signature T-shirts and coffee mugs selling so well in the store, the Dog took a logical step and expanded into catalog marketing in the ‘90s. According to Dan Pucillo, Black Dog CFO, the catalog arose as much to give off-season employment to Dog staffers as to sell merchandise. “The company wanted to keep some of its employees on the payroll during the off-season, so they came up with the idea of putting a catalog together,” he says. “They even located their fulfillment operation on the island. Probably not the smartest business decision, since they had to put the product on a boat to ship it in, then pack it up and put it on another boat.” Island thinking strikes again.
When the Web came along in the mid-‘90s, Black Dog bit. The company’s first Web site was intended primarily to garner sign-ups for the catalog. “It was pretty much another advertising tool on the Web—a presence out there that redirected you to our main business, the catalog,” Pucillo says. “We didn’t have an e-commerce platform integrated with the back end at all.” Accurate inventory counts were a problem, and customer information was siloed off, useless to other promotional tools.
Then came the sharp dropoff in vacation travel after 2001 and a new need to control costs. Black Dog decided the time had come to get more efficient with its non-store sales channels, the catalog and the Web site. Catalog and call-center expenses were rising, leading the company to cut back from four or five 250,000-book mailings a year to a single mailing.
That print cutback underlined the importance of refining the company’s Web operations, the better to reach and serve customers who arrived outside those mail dates. Using Web design services from San Diego-based Engine Ready Inc., Black Dog relaunched a more full-featured Web site in 2002 and resumed marketing through the site in 2003. Now the company sees about 75% of its sales coming over the Web vs. 25% through call centers, although Pucillo points out that may not translate neatly to a Web store/ catalog breakdown since “many people get the catalog, turn down the page corners of items they want and head to the Web site.”
“The Black Dog was in a tricky situation because they were trying to define whether to continue mailing their catalog or to home in on Internet marketing,” says Engine Ready CEO Jamie Smith, who grew up on Martha’s Vineyard and knew the Black Dog brand well. “What we helped them discover was that they needed a hybrid approach. If they pulled the plug on the catalog, they were missing some of the traditional customers who enjoyed ordering on the phone or using the book while online. We built their Web redesign around more efficient search marketing to reach new customers.”
An important part of that renewed Web commitment was figuring out how people were currently finding TheBlackDog.com, and how well existing online marketing tactics—both pay-per-click and search optimization-- were converting visits into sales. Black Dog started subscribing to Conversion Analyst, Engine Ready’s proprietary Web analytics tool, to track results from its paid-search campaigns and to check that the Web site was properly optimized for organic search.
As part of its Web relaunch, Black Dog had started running pay-per-click ads on both its branded terms and on generic terms for the items it offered—everything from keywords for T-shirts, mugs and sweatshirts (top-selling items) to “corporate gifts” and catering services such as “unique wedding cakes”. But after a short period spent watching those keywords to see which ones led visitors to the site and which led them to buy once there, Black Dog—in consultation with Engine Ready—determined that only its branded terms were performing effectively as a search marketing campaign. The generics cost too much and were too competitive.
“We were trying to make sure that we were ranking pretty high for general terms such as ‘sweatshirt’, but we found that those terms weren’t converting anywhere near as well as the ones where someone was looking specifically for Black Dog merchandise or searching on ‘Martha’s Vineyard’,” Pucillo says.
Smith brings up the Web page that shows the analytics for those early post-redesign search keywords and phrases, and sure enough, the top converting terms all refer specifically to Black Dog or its island home. Terms like “hooded sweat shirt” and “children unique gifts” had no conversions at all.
“We had started marketing on the generic phrases because we were hoping to increase our appeal with the mass buying public,” Pucillo says. “We felt our product quality was better than a lot of other vendors out there. But watching these results convinced us to funnel our online ad money in a different direction and cut those terms as a waste of ad spending.”
Watching the online conversions also had the effect of re-energizing the Black Dog catalog, he says. At the time of the relaunch, the company was down to one small mailing a year. But the difficulty of getting its product-quality message across on the Web convinced Black Dog to open that schedule up a bit with a product introductory mailing in the spring and then a fall/winter book. (Fulfillment is now safely and more cheaply outsourced to a company in the Midwest.)
In revamping the Web site, the company also made sure to integrate its online sales function with the CRM backend. Those previously separate functions now come together more efficiently to allow Black Dog to use its online database to market to past or lapsed customers via e-mail and the occasional direct mail campaign.
Moving so much of its commerce to the catalog and especially to the Internet has also made merchandising easier for the Black Dog stores. (The company has opened a few more outlets around the New England coastal region in the last few years, in Falmouth, Chatham and Provincetown MA and Newport RI.) “Being a tourist town, we’re very weather-dependent,” Pucillo says. “Now if we get a couple of rainy weeks and in-store sales drop off, we can have our Web people put together a nice product showcase and make up the difference on the Internet. It’s like a panic button for the summer season.”
At the height of the summer season, Black Dog’s employee roster swells to about 325 people and brick-and-mortar sales take precedence over all other channels. But those are mostly retail help. Pucillo says he and three or four others—including the graphic designer and the buyer—share e-commerce responsibilities. And without a dedicated e-commerce executive, checking the centralized Conversion Analyst reports daily is crucial to making those Web marketing decisions.
“I’m always checking it to see what URLs people are coming through,” he says. “I also like to check on daily browsing hours, the number of views we get after we update the site, and heaviest shopping days. If you’re planning to do a Web sales blast, that knowledge definitely helps.”