2014

CUSTOMER SUCCESS

Newark element14Optimizing the Customer Experience for Niche Technical Buyers

© 2014 LivePerson, Inc. 2

CUSTOMER SUCCESS Newark element14

Newark element14 sought to increase e-commerce penetration rates for its technical target market by offering an individualized customer experience on its websites. The company expanded its existing services deployment of live chat from LivePerson into sales support, and over

time added proactive live chat, content targeting, and the LiveEngage platform. As a result, live chat volume is

currently growing at a 57 percent annual rate, and average order value from live chat participants has increased by

39 percent.

Consumers shopping for mass-market items typically have dozens of e-commerce sites to choose from,

but engineers and businesses looking for electronic components have fewer options. “The market we

support is low volume, with small production runs,” explains Kurt Gehring, head of E-Commerce Operations

at Newark element14. “We serve three buyer personas: engineers who are developing new products, repair

professionals who need replacement parts, and corporate procurement departments that consolidate

orders from their organizations to maximize efficiency.”

With 4.5 million distinct products listed on websites operated by Newark element14 and its affiliates

around the world, even the most tech-savvy engineers are often unsure whether a specific product will

work for them. They might find the information they need in the element14 Community, where engineers

collaborate and share information on a variety of topics. But like every other e-commerce site, Newark

element14 customers sometimes need to engage in real time with an agent in order to resolve a

customer service issue or get the information they need to make a buying decision.

Company ProfileFounded in 1934, Newark

element14 is a leading

distributor of electronic

components for engineers,

designers, and repair

professionals, and doing

business in 45 countries

and nine languages.

The Results Sales Improvements

39% increase in AOV

per chat conversation

after deploying proactive

live chat and content targeting

2% increase in conversion

rate on Cyber Monday 2013,

compared to the previous year

Significant reduction in

abandoned shopping carts

E-Commerce Penetration

70% of sales from

e-commerce in Europe and

Asia, up from 5% in 2008

40% of sales from

e-commerce in North America,

up from 5% in 2008 Digital Engagement Operations

57% annual growth in

live chat volume

100% increase in live chat

volume upon deployment of

proactive live chat

51% increase in live chat

volume from introduction

of proactive live chat

© 2014 LivePerson, Inc. 3

CUSTOMER SUCCESS Newark element14

The Challenges • Increase penetration levels

for e-commerce channel

• Engage customers with

real-time help and person-

alized marketing offers

• Increase incremental sales

through cross-sell and

upsell marketing

The Solution Engagement Model:

Proactive Click to Chat and

Click to Call for customer

service and sales; individu-

alized marketing engage-

ment for website visitors

Under the Hood:

LiveEngage Platform with

rules-based targeting,

content targeting

Customer Success:

Ongoing help with

deployment and

optimization of

digital engagement

Bolstering e-commerce with digital engagementWhen Gehring joined the company six years ago, the e-commerce channel only accounted for around five

percent of Newark element14’s sales. “We were still in the Web 1.0 mentality, where customers said, ‘Just

give me some raw information; I already know what I’m looking for’,” Gehring recalls. “But we knew our

customers were quickly moving to Web 2.0, where they would ask, ‘How do I get all the information I

need to make a buying decision?’”

As Gehring took on the challenge of growing e-commerce at Newark element14, he was pleased to

see the company had deployed live chat from LivePerson a couple years earlier. “It started as a services

deployment,” he explains. “Our customer service pages had a static live chat button for issues such as

missed deliveries or functionality problems, but for our unique customer base it quickly became a

feedback tool as well. Customers would chat with us to tell us what functionality they’d like to see in

future products.”

About four years ago, as a part of a larger upgrade to the e-commerce customer experience, Gehring and

his team added static live chat buttons offering technical support on product pages and other places where

users were in the buying process. “We wanted to evaluate what live chat could do for us,” he relates. “We

did A-B testing to figure out the best live chat experience for our customers, but almost every scenario

we tested was exponentially better in terms of penetration rate than before live chat.”

Getting carts to checkout with proactive live chatThese results were so promising that Gehring’s team moved quickly to expand the company’s live chat

deployment using LivePerson. An important focus was on adding proactive chat with rules-based targeting

in 2010. “We standardized best practices across our geographies and wrote rules so that proactive live chat

invitations would pop up for customers who were likely to buy,” he explains. “Our clientele tend to prefer

self service when possible, so we had to learn to say, ‘I’m available to help you without being too invasive

to their overall journey.”

Proactive live chat seemed to be an ideal way to address one recurring problem for Newark element14:

abandoned shopping carts. “We optimized our website so we could discover the key times and places

when customers were most likely to abandon, and we now present a proactive live chat invitation five to

ten seconds before this occurs,” explains Janet Davila, an e-commerce product owner on Gehring’s team

who manages the company’s LivePerson targeting rules. “The LivePerson platform allowed us the flexibility

we needed to create the best proactive live chat experience for our particular needs.”

This change alone resulted in a doubling of the number of live chat conversations in the e-commerce

platform and in technical product support. “There are technical reasons that we can’t accurately measure

improvements in the cart abandonment rate, but the increase in live chat conversations told us that more

customers were getting the information they need,” Davila remarks.

We optimized our website so we could discover the key times and places when customers were most likely to abandon, and we now present a proactive live chat invitation five to ten seconds before this occurs.

– Janet Davila, E-Commerce Product Owner, Newark element14

4

CUSTOMER SUCCESS Newark element14

© 2014 LivePerson, Inc.

Individualized offers with digital performanceThe success of proactive live chat quickly got the attention Newark element14’s marketing department. “It opened their eyes and they asked,

‘What else can we do with this?’” recalls Gehring. “When we looked into it, we saw that the content targeting capabilities could help us put

personalized messaging and offers in front of the customer. It moves us in the direction of Web 3.0—the omnichannel customer experience.

We’re able to engage customer where they are with something that they are probably looking for.” After doing some testing, the team deployed

content targeting in North America in 2012, and in Asia and the United Kingdom in 2013.

LivePerson content targeting enables Newark element14 to execute highly targeted marketing campaigns based on where the visitor came

from and how they behave on the site. “For example, if a visitor came to us from a Google search, LiveEngage can throw up a message that says,

‘Welcome from Google’ along with some marketing collateral that is pertinent to the search terms,” Davila explains. “And of course, an invitation

to proactive live chat is included.”

In addition to keeping visitors engaged and providing them with special offers and product information, content targeting also provides

Newark element14 with cross-sell and upsell opportunities that they otherwise might not have. “For example, we sell a product called Raspberry

Pi, mostly to university students,” Davila says. “It’s a $35 circuit board that helps them get started in doing their own programming. When

customers put the Raspberry Pi in their shopping carts, we’re now able to present them with offers for other things that they are going to need—

dev kits, power supplies, and the like. It’s so much more effective to upsell customers who are already doing a transaction with us than to blast

something out to a large group of customers who aren’t currently on our site. It’s truly enabling us to take digital engagement to the next level.”

Scaling digital engagement with the LiveEngage platformAs the company’s digital engagement activities grew in scope, Newark element14 steadily added licenses for concurrent agents and had 20

licenses by late 2012. “However, paying by the seat was starting to hinder our ability to grow,” Gehring relates. “Our volume spikes after product

launches, during marketing promotions, and at busy times of the year. We wanted the flexibility to use overflow staff when needed to make sure

every customer gets a response.”

The LivePerson Customer Success manager assigned to Newark element14 had provided critical support over the years in the deployment and

refinement of the solution, so Gehring decided to contact him to discuss this issue. The Customer Success manager told Gehring about the

new LiveEngage platform, which charges by number of interactions rather than the number of concurrent agents. “The pricing model of the

LiveEngage platform was perfect for us, as it allows us to scale up and down quickly to accommodate global and regional traffic,” Gehring says.

“The new platform also has a lot of enhanced features for customer targeting and marketing campaigns that we will be able to leverage.”

The LiveEngage platform is being rolled out concurrently with Newark element14’s new IBM WebSphere Commerce system, which was launched

in Canada in May 2013 and in the U.S. and Mexico in late November. “We figured a small initial deployment would give us the opportunity to

work out any kinks,” Davila explains. “We didn’t have many kinks, but we did see our chat volumes in Canada increase fivefold in a very short

time. So this helped us realize that we needed extra staff ready for the U.S. launch. The company plans to launch the LiveEngage platform

globally in 2014.

We saw that the content targeting capabilities could help us put personalized messaging and offers in front of the customer.

– Kurt Gehring, Head of E-Commerce Operations, Newark element14

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CUSTOMER SUCCESS Newark element14

© 2014 LivePerson, Inc.

Optimizing customer experience with the right dataToday, Davila maintains several hundred rules for targeting customers with proactive chat invitations and marketing campaigns. The primary

reason for such a large number of rules is a difference in regional needs. “We have to act globally as a single brand, but we also have to behave

regionally, and give those local markets what they need,” she asserts. The team spent significant time analyzing website behavior to refine the

rules for the various geographies.

Newark element14 also uses customized segmentation features in the LiveEngage platform for more precise targeting of marketing campaigns

and to optimize the customer experience. “For our content targeting usage, we’re using LiveEngage to send specific campaigns and offers based

on keyword entries and the sources that they come from,” Gehring explains. “We have also used targeted messaging to mitigate the customer

journey and reduce visitors’ need to contact us for support.”

Supporting a growing trend of mobilityAs with almost every other website, Newark element14’s sites have seen a huge increase in traffic from mobile devices. “About half of our

transactions now come from tablet devices rather than PCs,” Davila reports. “In terms of raw traffic, 25 percent now comes from smartphones.

We believe that many customers are researching products on their phones and completing the purchase on a tablet or PC.”

In response to this trend, Newark element14 is in the process of building a mobile-friendly website with responsive design and deploying several

mobile apps for iOS and Android operating systems. “Repair professionals in particular are coming to us via mobile devices because they’re out

in the field,” Gehring notes. “We want to enable them to take a picture of a broken part and send it to our sales rep to try to find a match.”

As the Newark element14 team rolls out its mobile strategy, they plan to deploy Click to Call through the LiveEngage platform and Click-to-Chat

capabilities for mobile users. The latter includes integration of Click to Chat into mobile releases. “We’re stepping up to offer a truly scalable

mobile solution that encompasses LivePerson digital engagement,” Gehring says.

Better engagement with new sales support teamsThe LiveEngage platform is a key component of a new sales strategy at Newark element14. “We have always had technical support available to

help visitors with the purchase decision, but we find that this support is mainly helpful in the earlier stages of the sales cycle,” Gehring observes.

“Now we’re building sales support teams to help customers later in the process—opening new accounts, getting credit terms approved, and the

like. The concept was introduced in Europe last summer and just recently launched in North America. Proactive live chat will be at the core of

what they do.”

As Newark element14’s digital engagement infrastructure continues to evolve along with such changes in sales strategy, the company’s

LivePerson Customer Success manager continues to be a source of data and advice on best practices. “We get monthly reports from him, and

we have a quarterly review where we discuss key performance indicators and strategies to improve them,” Davila reports. “He always has a lot

of good ideas for us.”

Today, it’s very much a question of ‘How do customers want to order from you and how do they want to communicate with you?’

– Kurt Gehring, Head of E-Commerce Operations, Newark element14

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CUSTOMER SUCCESS Newark element14

© 2014 LivePerson, Inc.

Comprehensive digital engagement brings impressive resultsThese best practices have paid dividends. Over the six years that Gehring has been working to optimize the customer experience, Newark

element14’s e-commerce activities have grown dramatically. The percentage of total sales driven through e-commerce has increased from

five percent to 40 percent in North America—and to more than 70 percent in Europe and Asia. “We have done a lot of things to help move

that number, but digital engagement from LivePerson is definitely a very large factor in that success,” Gehring says.

Not only are more people doing e-commerce business with Newark element14, they are spending more with the company as well. “After we

deployed proactive live chat and the digital marketing performance capabilities, we saw a 39 percent increase in average order values for live

chat participants,” Davila reports. Add this to the current 57 percent annual growth rate in chat volume, and Newark element14 has the potential

to see substantial revenue increases.

Gehring attributes these successes not to any specific technology, but to the holistic digital engagement strategy that his company has been

able to deploy with the help of LivePerson. One specific example of the value of this big-picture view came on Cyber Monday during the 2013

holiday shopping season. “We’re really more of a B2B company, but we decided to do some promotions on the B2C side to see if we could gain

some new customers,” Gehring explains. “By marketing our products to holiday shoppers using LivePerson content targeting and proactive live

chat, we were able to improve our conversion rate by two percent from Cyber Monday of 2012. And I expect that some of those customers will

come back.”

An omnichannel experienceThis is one illustration of how Newark element14 has evolved from an e-commerce company that happened to have live chat available to a

company that has a comprehensive digital engagement strategy and experience. “We’ve been able to take digital engagement to another level

by leveraging more and more of the features of the LiveEngage platform,” Davila notes.

“It all goes back to the Web 3.0 nomenclature,” Gehring concludes. “Today, it’s very much a question of ‘How do customers want to order from

you and how do they want to communicate with you?’ You need to have those channels available. And whatever technologies arise in the future,

I expect that LivePerson will be in partnership with us through the entire journey.”

About LivePersonLivePerson, Inc. (NASDAQ: LPSN) offers a cloud-based platform that enables businesses to proactively connect in real-time with their customers via chat, voice, and content delivery at the right time, through the right channel, including websites, social media, and mobile devices. This “intelligent engagement” is driven by real-time behavioral analytics, producing connections based on a true understanding of business objectives and customer needs. LivePerson is headquartered in New York City with offices in San Francisco, Atlanta, Tel Aviv, London, Amsterdam, and Melbourne.

LivePerson, Inc. T: 212.991.1794

475 Tenth Ave F: 212.609.4233

5th Floor info@liveperson.com

New York, NY 10018 www.liveperson.com

It’s so much more effective to upsell customers who are already doing a transaction with us than to blast something out to a large group of customers who aren’t currently on our site. LivePerson

is truly enabling us to take digital engagement to the next level.– Janet Davila, E-Commerce Product Owner, Newark element14