The IDEXX eCommerce Journey · Surveys are IDEXX -branded – customers know they are doing the survey for IDEXX. Invitations were sent to all active IOO users, lapsed users and non

The IDEXX eCommerce Journey Donalee Santoro, Vice President Business Operations Companion Animal Group

Lulu Santoro

2 © 2017 IDEXX Laboratories, Inc. All rights reserved.

What I’ll cover

The journey begins

Structure and planning

Staying focused

Measuring up

Founded in 1983 as AgriTech Systems 1991 IPO as IDEXX Laboratories ~$1.77 Billion annual revenue Over 7000 employees More than 175 countries S&P 500 index NASDAQ -100 index


Our purpose: To be a great company that creates exceptional long-term value for our customers, employees, and shareholders by enhancing the health and well-being of pets, people, and livestock.

Companion Animal Group (CAG) – Pets Water, Dairy – People Livestock, Poultry - Livestock


Exceed the expectations of our

customers

Empower and reward employees

Achieve and sustain market leadership

Cultivate entrepreneurial spirit

Contribute to our communities

Innovate with intelligence

We are guided by 6 core principles


IDEXX has generated exceptional performance over the past 25+ years

$0

$20

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$60

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$120

($ per share)

IDEXX Stock Price 1991 to 2017(1)

(1) Monthly stock price ending February, 2017, adjusted for dividends and stock splits.

The journey begins


Territory-Centric

Distribution model for recurring revenue

Hospital-Centric

Fully direct customer-centric model

Product-Centric

Product-centric model

‘13 ’15 + ‘14

Our journey began with a vision to get closer to our customers

IDEXX eCommerce Distributor eCommerce


Customers were enjoying an online ordering experience with their distributor; parity was a must

Market research guided our understanding of the

current customer experience and informed our high level objectives…


Low Customer Effort

High Adoption

Pleasing Experience

Structure and planning


We engaged industry experts to help us ensure functionality, scalability, and sustainability and avoid organizational bias

External consulting partners Former Senior VP Corporate Marketing and eCommerce


Strong partnership and collaboration across the team is essential; focus on roles, not the number of people

Product Owner

Brand Owner

Digital Marketing

Channel Revenue Owner

IT Project Owner

• Product owner – responsible for the strategy, platform roadmap, capabilities, requirements development, primary interface with IT

• Brand owner – responsible for consistent look and feel

• Digital Marketing – responsible for site marketing, personalization, descriptions, hierarchy, positioning, awareness, adoption, utilization

• Channel revenue owner – responsible for demand generation through the system

• IT project owner – responsible for system implementation of the roadmap, system uptime and reliability


Our current platform is an on-premise solution; which has limitations compared with a cloud-based solution

V.S.

Technical debt – maintenance of platform Expensive delivery of functionality Infrequent releases

Low technical debt – low maintenance Out of box functionality Frequent releases


An informed roadmap delivers functionality that resonates with customers; at a pace that can be adopted

IDEXX Online Order ExperienceFebruary 2017CAG Customer Insights


MethodologySurveys are IDEXX-branded – customers know they are doing the survey for IDEXX.

Invitations were sent to all active IOO users, lapsed users and non-users.

Active and lapsed users were emailed a survey invitation with a link to the online survey. 13958 were sent an invitation and 1207 responded for a response rate of 9%. [Margin of error: +/- 2.7]

We faxed the survey to non-users, realizing technology could be a barrier, since they’re not currently ordering online. 3298 were sent an invitation and 364 responded for a response rate of 11%. [Margin of error: +/- 4.8]

To maximize response rate, respondents were entered into a drawing to win 1 of 20 $100 Amazon gift cards.

Surveys were in the field from February 8-24, 2017.


46%

36%

10%

8%

100%

81-99%

50-80%

Less than 50%

% of Orders Placed OnlineBased on current IOO users (n=1207)

Q. Approximately what percentage of the time do you order using idexx.com/ordersQ. Why don't you place all of your IDEXX orders online?

Over 80% of survey respondents place the majority* of their orders online, which is their preference. They call when they need assistance.

Total(n=586)

<50%(n=54)

50-80%(n=111)

81-99%(n=421)

Call when assistance is needed**

54% 15% 42% 63%

Preference/easier to call 21% 52% 34% 14%

IDEXX contact us 18% 7% 10% 22%

Technology limitations 7% 6% 11% 7%

Getting familiar with IOO 6% 24% 13% 2%

Website is difficult to navigate 5% 15% 2% 5%

Want to ensure order is right 3% 6% 4% 2%

To expedite order 1% - - 1%

Need to order while driving 1% 2% 2% 0%

Why not 100% Online?Based on those who order <100% online (n=586)

*majority = 80% or more

Text highlight green = significantly higher

**types of assistance broken out on the next page

‘The fastest and easiest way is to use the online system. I can see my history and expiry dating on product to make better stocking decisions. I do not like to call in and have to work through the phone tree.’


Assistance ranges from product questions, to help finding certain products, help with discounts, etc.

27%

15%

9% 8%

2% 1%

Call when I havequestions

Call when I can't findsomething

Credit for expiredproducts/points/specials

Call support and order atthe same time

Triplebackorder

Call to add something toorder

Types of Assistance NeededBased on those who order <100% online (n=586)

‘If I have a question about something I'm ordering, I like to get a quick answer, and that's just simpler if you are talking to a person.’

‘Occasionally I have questions about order and after speaking with rep she offers to put order in for me. I think it's great that she is willing to do this for us’

‘I love the ease and convenience of online ordering, you've done a great job making the website easy to navigate! The only time I call is if I have a question.’

‘Some of the IDEXX products we use aren't available online, instead the website directs us to call in the order.’

‘The majority of products I order online but last time I needed to order Sedivue products they were still unavailable to order online, if they are all available to order online then I will order everything online.’

‘If I need to request credit for expired product, I have to call in to have it applied to a reorder. The website doesn't have that capability.’

‘Checking and using points.’

2013 2015 2016

Launched US CAG site

Launched WLPD and International sites

Simplified registration

Added Practice Supplies

Promo codes and Points

2017

Site redesign w/ mobile-responsive UI

Sales ordering in Customer Support Portal

User survey

Added Reference Lab Supplies

Scheduled Orders

Frequently Ordered Products

Homepage redesign

Call to order

User experienceNew capabilitiesLarge initiatives

Improved search

Single sign-on integration w/ other IDEXX properties

User survey

Shipping policy updates

New marketing capabilities

Offline ordering


Key performance indicators ensured we measured the critical few; informing marketing efforts and roadmap development

2015 Standing up the platform

2016 Improving the

experience

2017 Maximizing the

capability

Integrated, low effort experience

• Percent of customers ordering

• Percent of direct revenue • Customer Satisfaction

User-centric redesign to further adoption

• Customer satisfaction • Percent of direct revenue • Percent of orders

Drive awareness and adoption

• Monthly site traffic • Registrations • Percent of direct revenue • Customer satisfaction


An integrated and targeted marketing plan supports desired results

2015 Standing up the platform

2016 Improving the

experience

2017 Maximizing the

capability

Staying focused


Prior to the launch of our eCommerce site, IDEXX already had several independent digital properties…

A confederation of digital sites, each with a unique customer experience and technology platform, which lead to an

unintentionally high effort experience for our customers

Idexx.com ILC

Social Media

Phone

VC+


…a digital identity project was re-initiated in 2016 with a new strategy and vision to create an integrated digital experience

RELATIONSHIP Facilitate use of all sites with easy access Personalized experience on sites Customized access and self-service

capabilities

IDENTITY Simplified, universal registration One login using email address Ability to view and update profile

information in one place from anywhere

Online Orders

ILC

VC+

MyIDEXX BillTrust

Points

IDEXX. com

CURRENT STATE Siloed sites with multiple logins required No unified, consistent navigation between sites Fragmented digital approach to engaging users

Live 2 days ago!

Measuring up


1© 2017 IDEXX Laboratories, Inc. All rights reserved.

Internal use only.

Current Month

vs. Previous

Month

vs. Previous

Year Month

YTDYE

Goal

YE Forecasted

Goal

Mitigation (if >3%

below goal)

Total Visits 104,494 + 13% + 60% 294,279

Unique Visitors 31,483 + 9% + 20% 64,801

New Registrations 398 - 20% - 26% 1,478

Unique Customers Ordering

11,480 + 5% + 21% 13,314

% of Direct Customers Ordering

58% + 1 + 8 56% 61% 61%

Total Orders 43,633 + 16% + 24% 119,459

% of Direct Orders 61% + 1 + 8 61% 68% 65% See slide 2

Total Revenue (M)RA/VetLab/Practice Supplies

$27.6$8/$19/$0.2

+ 15% + 23% $74.2$21/$53/$0.6

% of Direct IHD Revenue

68% + 1 + 8 67% 75% 72% See slide 2

Satisfaction 96% - 3 - 1 97% 97% 97%

System Uptime 99.6% - 0.4 + 2.0 99.7%

Online Orders Monthly Dashboard – March 2017

Highlights

• Traffic up 13% in March as a result of 5% increase in unique customers ordering and 16% increase in total orders

• New registrations down in March due to delayed launch of Digital Identity

• % of all direct orders increased 1 pt to 61% due to RA and VetLab increasing to 60% and 67% respectively

• % of direct IHD revenue increased 1pt to 68%

• Decrease in satisfaction due to storm shipping delays in March

• 3 hr. outage delay during R1 launch on March 12

Tra

ffic

Use

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xper

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o Monitoring against KPIs helps with course correction if needed

o Monthly dashboard shared broadly across the commercial organization and IT partners

We measure against our KPIs monthly with a dashboard that informs on our progress against our goals


Internal use only.

Current Month

vs. Previous

Month

vs. Previous

Year Month

YTDYE

Goal

YE Forecasted

Goal

Mitigation (if >3%

below goal)

Total Visits 92,212 - 3% + 55% 189,785

Unique Visitors 28,814 - 3% + 16% 46,260

New Registrations 495 - 9% - 15% 1,080

Unique Customers Ordering

10,882 + 0% + 20% 12,419


57% + 0 + 8 56% 61% 61%

Total Orders 37,471 - 5% + 19% 76,791

% of Direct Orders 60% + 2 + 9 59% 68% 68%


$24.1$7/$17/$0.2

+ 3% + 22% $47.5$13/$35/$0.3

% of Direct IHD Revenue

67% +0 + 9 67% 75% 75%

Satisfaction 99% + 2 + 5 98% 97% 97%

System Uptime 100% + 0.5 + 0.1 99.8%

Online Orders Monthly Dashboard – Feb. 2017

Highlights

• Traffic and new registrations were flat or slightly down after the ISR “Fax-to-IOO” initiative ended first week of Feb. driving 96 of the 495 new registrations

• % of all direct orders increased 2 pts. to 60% due to RA, VetLab, and Reference Lab Supplies increasing to 59%, 64%, and 63% respectively

• % of direct IHD revenue remained the same at 67%

• Satisfaction increased to 99% in Feb. based on 69 responders and quick, easy experience

• No outages in Feb.

Tra

ffic

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Internal use only.

Current Month

vs. Previous

Month

vs. Previous

Year MonthYTD

vs. YTD Forecast

Goal

Total Visits 97,573 + 17% + 73% 97,573

Unique Visitors 29,831 + 13% + 22% 29,831

New Registrations 585 + 85% + 6% 585

Unique Customers Ordering 10,919 + 7% + 26% 10,919


57% + 0 + 9 57% + 0 60%

Total Orders 39,320 + 17% + 41% 39,320

% of Direct Orders 58% - 1 + 8 58% - 1 63%


$23.4$6/$17/$0.2

+ 14% + 41% $23.4$6/$17/$0.2

% of Direct IHD Revenue 67% + 2 + 9 67% + 2 70%

Satisfaction 97% + 0 + 0 97% + 0 97%

System Uptime 99.5% - 0.4 - 0.5

Online Orders Monthly Dashboard – Jan. 2017

Highlights

• Double-digit traffic increases in Jan. due to increases in new registrations and users

• ISRs were heavily focused on IOO in Jan, reaching 50% or 2k of the order-by-fax accounts with significant contribution to new customer registrations

• % of direct orders decreased 1pt due to IHD with % of Ref Labs and Practice Supplies increasing to 62% and 57% respectively

• % of direct IHD revenue increased 2 pts due to increases in customers, orders, & revenue

• Satisfaction remains high at 97%

• 1 outage on Jan. 4 for 4hrs due to Common Middleware Services

Tra

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KPI – Key Performance Indicator


While we stood up our online store ~ 2 years ago, the percent of customers purchasing through our online store places us with Digital-First Firms for % of customers buying online…

Fifty-five percent of “digital-first” B2B organizations (those that began focusing on eCommerce five or more years ago) report that more than half of their customers currently complete transactions online, compared to only 22 percent completion for “lagging” firms that began focusing on eCommerce less than three years ago. (Source: Accenture)

22%

10%

55% 55%

0%

10%

20%

30%

40%

50%

60%

Lagging Firms

Mid-Maturity Firms

Digital-First Firms

IDEXX

eCommerce Maturity X % of Customers Buying Online

Lagging Firms – focus on eCommerce < 3 years ago Digital-First Firms – focus on eCommerce > 5 years ago


…with a large portion of our revenue flowing through our online store

Thirty-three percent of the digital-first B2B organizations see more than one-third of their revenue come from online sales, compared to six percent of lagging organizations. (Source: Accenture)

50%

27.1%

4.1%

18.8%

% of Revenue Online

0 - 10% revenue online 11 - 35% revenue online

36 - 50% revenue online > 50% revenue online


o You must have a strategy informed by customer data with a clear vision of the desired experience

o Seek expertise (consult or hire) from outside to capitalize on experience and avoid organizational bias

o Have a plan and continually test / measure against the plan

o You should expect to get some things wrong and need strong agility to adjust

There are several keys to success…

IDEXX Laboratories, Inc. holds the copyright in this material. No part of this document may be reproduced or transmitted in any form or by any means, whether electronic, mechanical or otherwise, for any purpose, without the express prior written permission of IDEXX Laboratories, Inc. IDEXX® is a registered trademark of IDEXX Laboratories, Inc.

Proprietary rights notice

Documents

The IDEXX eCommerce Journey · Surveys are IDEXX -branded – customers know they are doing the survey for IDEXX. Invitations were sent to all active IOO users, lapsed users and non