November 27, 1998
Advertising
Bertelsmann's Books Online Chief
Plans Low-Tech Sales Approach
By KIMBERLEY A. STRASSEL
Staff Reporter of THE WALL STREET JOURNAL
BAAR, Switzerland -- Europe has always produced better engineers than
marketers. After all, this is the continent that created the fax machine, jet
engine and compact-disk player but couldn't successfully market any of
them.
Heinz Wermelinger is an exception. A 52-year-old Swiss businessman, he
has sold the Harlequin Romance series to Russians and hawked Readers
Digest to Germans. Against all odds, he transformed America Online into
the largest pan-European online service. So what is Mr. Wermelinger's
strategy, now that he is about to leave AOL's joint venture with
Bertelsmann to take over the German media giant's new
electronic-commerce business selling books and music? His approach is
surprisingly low-tech and nitty-gritty.
"Technology is overrated," says Mr. Wermelinger, a balding bon vivant
dressed in an open-neck shirt and gold chain who spent 20 years in direct
marketing, poring over mailing lists and tinkering with ad slogans. "You've
got a product; you've got a customer. The process of getting them together
is irrelevant."
Such talk is heresy in the online world. Yet it worked for AOL. His
mission, as always, is to get the customers to try the product just once.
Then, once the hook is set, use technology to keep them hooked.
Sitting at a coffee table in his Alpine office here, Mr. Wermelinger gazes
down at a bunch of square packages containing CD-ROMs. One box
shows a smiling girl. "A nightmare," he says. "The user doesn't like the face,
so decides not to try AOL. Faces ... bad." A CD tucked inside an
envelope? "Disaster. Who's going to take time to open an envelope?"
Bertelsmann is a relative latecomer on the electronic-commerce scene, with
businesses such as Amazon.com and CDnow already going strong in
Europe. But being an underdog doesn't faze Mr. Wermelinger, even in
Europe's struggling electronic-commerce market, which has been
hampered by confusing software, high phone costs and in many European
countries, laws barring Internet start-ups from discounting items such as
books.
Bertelsmann's Books Online will hit the Internet in coming months. For it,
Mr. Wermelinger envisions local-language versions across Europe,
elaborate customer-service departments to help confused web surfers, and
partnerships with Bertelsmann's book clubs and their 27 million members.
He plans to advertise Books Online in magazines, shunning techno-jargon
in favor of plain advice to housewives, small-business owners and students
about what the Net is, how to get on it, and why it will make shopping
cheaper and easier.
He envisions personal service: When users log in, they will receive
information about their favorite authors, and learn of special deals on the
kinds of books that they usually read. They will also be put in touch with
other readers with the same interests.
When he first came to AOL from Harlequin, AOL faced an uphill battle. It
was late on the scene and, in a Europe already touchy about U.S.
dominance of the Internet, no one thought "America" Online stood much of
a chance.
Mr. Wermelinger went to work. Seeking only Europeans most likely to try
AOL, he obtained close to 400 mailing lists -- some with more than
15,000 names apiece. He crossed out citizens older than 70 and younger
than 18, deleted people who already were customers, and
cross-referenced names with lists of mobile-phone and gadget owners.
Then he mailed out CD-ROMs and waited. With CD-ROMs, he says,
"Your only salesperson is the box the CD comes in."
Mr. Wermelinger tinkered with the design of CD-ROM boxes, changing
designs and slogans. He coached customer-service representatives to be
patient when prospective customers called in and asked why their
CD-ROMs wouldn't work in music players. Fearing that even the slightest
cultural slight would cost AOL customers, he insisted AOL be present only
in countries where it could also supply home-grown customer-service
representatives. German-speaking Swiss AOL users, for example, talk to
Swiss-German help lines, not the regular German customer-service office.
"Give me 10 multimedia guys and nine of them will talk to me about how
the sky's the limit," says Klaus Eierhoff, a Bertlesmann director. "But Heinz
will be the one with the details, and all those details focused on selling,
selling, selling."
Recently, a Canadian friend gave Mr. Wermelinger's youngest son a bag of
special candy. Rather than eat it, Mr. Wermelinger's son took it to school.
He advertised it to friends as "a one-time special offer, direct from
Canada," and collected a tidy sum. "That's my boy," Mr. Wermelinger
says, smiling.
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