Change Is Sweet

Dotcom-ing the Brand

Nestlé was slow to embrace the Web: Its first site, CarnationBaby.com, didn't go live until June 1997. At the time, Nestlé's Web strategy was basically the same as that of its competitors (including General Mills, Kellogg, and Procter & Gamble) -- which is to say that it didn't really have a strategy. Nestlé simply let its eight divisions concoct their own Web projects, betting that each unit would figure out what works best online. The result: They all did the obvious, which was to dotcom their brands.

"Basically, we took each of our brands, put a '.com' at the end of it, and put it up on the Web," recalls Nick Riso, 35, who was vice president of national sales before Weller tapped him to lead Nestlé's e-business initiative. "We ended up with a mixed bag: LibbysPumpkin.com, Stouffers.com, TollHouse.com." Riso's brown eyes widen as he talks; his hands are in perpetual motion. His zeal for Nestlé's Net effort borders on the evangelical. Colleagues have taken to calling him "the Reverend."

"Excuse me, but CarnationMilk.com is not a go-to site!" he exclaims, warming to his theme. "People aren't exactly falling over each other to check out canned milk in a dotcom. But what's clear now wasn't so obvious two years ago, when every other consumer-products company did the same thing. We all had 'brand.com.' The philosophy was 'Build it, and they will come.' "

For a while, they did come. Wonka.com, an early Web venture that showcases kid-oriented candies like Gobstopper and Nerds, generated 13,000 hits during its first month, in December 1997. Nestlé executives were elated. But back then, Webheads would hit on just about anything with a URL. Once they logged on to a site like CarnationMilk.com and discovered that there was no "there" there, however, the hits stopped coming. "We quickly realized that we had taken the wrong approach," Weller recalls.

Even worse, responsibility for Nestlé's Net strategy fell to its brand-marketing representatives, who gave it a low priority -- and for good reason. They were each expected to spend just 15% of their time developing tactics for growing the company's Web presence. "I knew the person in our nutrition division who was supposed to be devoting 15% of her time to the Web," recalls Becky Chao, 32, who now directs e-business for confections and snacks, and who was previously the brand manager for Carnation Instant Breakfast. "In fact, she saw the Web as a nuisance. I really couldn't blame her -- not when 85% of her performance evaluation was based on measurements that had nothing to do with the Web."

Chao admits that she too was slow to appreciate the Web's potential. "I'm not an early adopter," she says. "I didn't have any vested interest in the Web, other than to see the company excel in this area." But she is a straight talker. In the fall of 1999, she attended an off-site for gen-X employees that had been organized by a group of Nestlé's senior leaders. When the conversation turned to the Web, Chao didn't hold back: "They asked us, 'How are we doing? Are we at least performing better than our competitors?' I told them that we weren't even on the same playing field."

Indeed, Nestlé leaders were somewhat at a loss over what to do next. So they did something that was pretty radical for a big, entrenched market leader: They conceded that they didn't have all of the answers, and they enlisted in-house proselytizers like Riso and Manion to talk with people who seemed to be in the know -- employees, retailers, consumers, key figures from AOL, Yahoo!, and other Web heavyweights.

"We put a lot of questions to those folks -- especially people from the portal sites," recalls Manion. "We asked, What's really happening in the marketplace? What are customers telling you? What have you discovered that can help us drive our business?"

A Return on Trust

Nestlé's Web gurus came back with two big insights. First, brand-centric sites come off as abrasive and obtrusive to jaded online consumers. In a world that bombards them with more and more advertising, Web users instinctively look for beacons of trust and reliability. Second, the Internet has helped transform branding from a one-way lecture into a two-way conversation.

How, then, should Nestlé approach brand-leery, Net-savvy consumers? The answer: Nestlé would invert its entire approach to Web marketing. Instead of putting the brand first, it would put the consumer first. It would treat the brand as a resource.

Nestlé's new Web strategy focuses on creating sites that help and inform consumers. Each new site draws on a common functionality and a common language, starting with the site name, which incorporates the company's ubiquitous "very best" slogan: "VeryBestBaking.com" (recipes and cooking tips), "VeryBestPet.com" (advice on grooming and nutrition for dogs and cats), and "VeryBestBaby.com" (what you'd expect).