Aspidistra works with Sage and Pegasus to help you increase sales, improve margins and reduce costs. We are specialists in creating B2B e-commerce websites for manufacturing, wholesale and distribution companies.
The value of global business-to-business eCommerce is predicted to reach over $6.5 trillion dollars by 2020 as customers continue to embrace buying online. Research shows that the behaviour of B2B buyers has fundamentally shifted over the last few years, as an increasing number of tech-savvy millennials lead the way to digitalised procurement. As a result, manufacturers, wholesalers and distributors are having to rethink the way they work and how they sell to their customers.
In our experience, a lot of companies are keen to modernise their approach, and many have committed to opening an online sales channel to better serve the needs of B2B buyers. But the problem is, a large number of these companies tell us that their website doesn’t support the kind of seamless eCommerce experience that today’s buyers expect. On top of this, many of the cost saving and business efficiency benefits that should accrue with a digital sales channel often fail to materialise.
The source of these issues can usually be traced back to the inadequacy of legacy technology. We frequently meet companies whose systems are unable to cope with the demands of modern eCommerce and are not optimised to streamline sales processes. These B2B sellers are stuck with websites that were originally designed as sales tools or online brochures to support reps and face-to-face or telephone ordering. On the other hand, some B2B buyers say that while their supplier’s website allows them to buy online, the process is painful and protracted.
We know from market research studies and our own conversations with B2B companies that today’s professional buyers want to research and purchase products on their own terms. And if they can’t access the kind of sales experience they expect, they’ll quickly find another supplier. Increasingly they want to research and buy online, when and where they choose, and often using a mobile device.
Ideally, for straightforward purchases, buyers would like to get through the entire ordering process without human engagement. In fact, by 2020, it’s predicted that buyers will manage 85% of their businesses relationships without talking to a single person. Instead, they look for a seamless, automated, self-service purchasing experience that delivers quick and easy product discovery, detailed product information and images, and simple ordering and shipping. And these are just the basic requirements.
By taking a few simple steps to enhance website performance, top B2B sellers who want to maintain competitive advantage are able to offer much more than this. From providing personalised pricing, payment terms and promotions, to real-time inventory position, and individual order history, these sellers have integrated their websites with business and accounting systems to create a powerful sales tool. This not only supports customer loyalty by delivering an outstanding buyer experience, it also helps to increase average order value, cut out processing errors, reduce resourcing cost, and improve margin.
Budgeting for a new B2B eCommerce platform or improvements to an existing solution generally involves four key stages to ensure money is allocated to areas that will deliver the best ROI:
• Collecting information and insights
• Establishing priorities
• Evaluating proposals and quotations from providers
• Re-assessing priorities and allocating budgets
The first two stages are the most critical and time-consuming parts of the process – let’s take a closer look at what’s involved…
Collecting information and insights This needs to be undertaken on a number of levels with a view to aligning the capabilities of your eCommerce platform with business objectives and strategic goals. Start by clearly defining your company’s overall aims over the budgeting period, and drill down to individual departmental targets, then carefully examine how your eCommerce solution can support their delivery.
You’ll need to benchmark the performance of your system in order to assess its contribution to achieving your these goals. For example, calculate the proportion of sales that come through your website, work out purchase conversion rates and average order values, and plot changes and trends over time. If you sell through wholesalers or distributors, think about the kind of support they require and ask whether your site provides this.
Establishing priorities After you’ve determined how well your B2B eCommerce site supports the delivery of business goals, focus on analysing areas such as hosting, marketing, and software and development to highlight potential opportunities for enhancement.
Consider whether your hosting environment is optimised for your needs – is your site loading quickly enough, does it lag at peak traffic times, have there been any outages, and can it scale with any anticipated increase in customer traffic? If you have any concerns over hosting performance, share them with your provider and ask for proposals on how their services can better meet your needs.
For marketing, think about the way you’re using content, email, and SEO techniques – and question how you could better use these to drive more revenue. For example, are the latest versions of product catalogues and guides available on your site? Are you using triggered emails for events such as cart abandonment? Where do you feature on Google rankings when people search on your industry keywords? Again, if you believe you could work smarter in any of these areas, ask your provider for their recommendations.
With software and development, look specifically at the quality of your system’s integration with key business processes and assess the likely impact of any future changes to your site on the way these will work. Factors such as the customer’s ability to view their own prices and discounts, tailored offers and real-time inventory levels are essential to creating a personalised, high quality user experience. Also consider your site’s mobile performance, in particular conversion rates for mobile traffic.
Closer examination of issues like these will help you determine how well your eCommerce solution is able to support future business growth and strategic goals. It will enable you to identify opportunities for improvement, assess the likely impact of any enhancements, and establish your priorities.
Evaluating proposals and allocating budgets, briefing your eCommerce providers on these priorities will allow them to respond with their proposals, recommendations and costs – which in turn means you can fine-tune your priorities based on accurate predictions of ROI.
The recent fall in manufacturing PMI, which combines statistics for output, orders and jobs, reflects the nature of a challenging market for B2B companies. Manufacturers, along with wholesalers and distributors are searching for ways to get ahead of the curve, looking for anything that delivers competitive advantage.
Business-to-business sellers are keen to grow sales and address issues in areas where efficiency can be improved, cost reduced and margin increased. But in an increasingly digitalised world, many of the companies we talk to are struggling to leverage traditional sales processes to boost performance. They’re still relying on face-to-face visits from sales reps, phoned in orders, picking up business at trade shows, printing expensive product catalogues that are usually lost or thrown away, and placing ads in the trade press to generate new business. And it’s simply not enough to drive increased revenue.
We frequently see companies facing a variety of other challenges that come from manual business processes. For example, orders placed with reps or on the phone need to be entered manually, often without any accurate insight into stock levels. As well as being resource intensive and time consuming, (a recent survey reported that in over 50% of larger companies, handling the paperwork associated with the manual processing of a single sales order takes up an average of more than 51 hours), this often results in errors that impact on delivery times and sour the customer experience.
On top of this, in our experience, the service expectations of today’s new breed of business buyer are higher than ever before. They want a seamless ordering process with no mistakes, delays or complications. They want to be able to research products and place orders when and where they choose. And they’re not afraid to change supplier if sellers are unable to meet these requirements.
Time and time again, we’re seeing how traditional ways of working are failing to deliver for today’s B2B companies. The failure is not just in terms of revenue generation, and customer service, it’s also in operational efficiency and cost control. With this kind of squeeze on margin, it’s little wonder that many manufacturers, wholesalers and distributors say their business is only just about treading water.
The business-to-business companies we work with have made some simple changes to the way they operate, and this is having a big impact on performance. By creating an online sales channel, they’re able to be more efficient, more agile, more productive, and provide a more streamlined customer service. For example, with an eCommerce platform, there’s no need to manually enter orders, so processing errors are eliminated and inefficiencies are ironed out to deliver cost savings of up to 80%.
These companies value the benefits of features such as real-time visibility into stock availability, account-specific pricing, payment-on-account, and personalised offers. And they’re seeing how an eCommerce platform that integrates with business and accounting systems can have a big impact on the customer experience – for both new and existing customers – improving satisfaction, enhancing loyalty and increasing sales in the long-term. Lower operating costs and higher sales drive increased margin, which is helping to put these companies ahead of the competition.
As eCommerce continues to grow, sellers are facing the challenge of managing larger inventories and expanding supply chains, particularly those retailers dealing with both B2B and B2C customers. Lack of visibility and communication across these supply chains is becoming a significant issue and can result in increasing costs and compromised customer service.
Likewise, suppliers are having to cope with increasing customisation as they struggle to comply with the support services requested by their account customers, including different order forecasting, fulfilment and logistics processes, and a wide variety of technology standards for visibility, collaboration and synchronisation.
Process automation has made a positive impact in areas such as order-taking, storage, processing, distribution and inventory updates for supply chain partners, but improving order cycle time is still a big challenge for retailers. There is now huge pressure to improve supply chain visibility and communication, driven by the need for increased distribution centre and sales channel service-level requirements.
However, while investment in better control of inventory and end-to-end order visibility should be a priority in improving customer service and controlling costs, to achieve this, process improvements across the supply chain are necessary. Responsiveness and agility are key to a streamlined supply chain network, and ultimately, competitive advantage. At the heart of this is the supplier’s ability to meet customer demands for more complex and tailored services by embracing the most robust and adaptable B2B eCommerce solutions available.
As suppliers move from a traditional push supply chain approach to a customer-centric, demand-driven model the supply chain is able to manage demand rather than simply just responding to it. A B2B eCommerce solution that enables greater process visibility and collaboration throughout the supply chain will help ensure that suppliers are able to provide the right products at the best prices, while meeting the unique support service requirements of different customers.
With a non-integrated eCommerce system, your business will receive email notification of every order.
The order is keyed in Sage sales order processing where it is allocated, picked, packed and invoiced. The details are then keyed into the carrier’s system sitting in the warehouse to produce the shipping labels and the order goes on its way.
So – imagine this order is for £30, you charge £5 shipping at cost and will make £15 with your 50% margin; however, the order was incorrectly keyed and you have sent the wrong goods.
It takes your staff half an hour to sort out a return (£6 labour cost), the return costs you £10 and you make a full refund to the customer of £35 including £5 shipping. You are now £21 out of pocket. Worse still, when you receive the return it cannot be restocked and is scrapped at a loss of £15. You are now £36 out of pocket and with the 50% margin, you would have to make a £72 sale to recover your costs.
You would need to make a sale of £102 to get back to the position of having £15 in your pocket.
Business-to-business eCommerce is growing rapidly and those companies that have already adopted it are seeing a wealth of benefits. So if you haven’t already made the move, here are some of the reasons why investing in a B2B eCommerce platform could be the most rewarding thing you do in 2019.
Firstly, B2B buyers and the B2B purchasing processes have changed dramatically in recent years. Increasingly, Millennials are responsible for B2B purchasing and rather than buying through traditional channels like trade counters or sales reps, most prefer to research and buy online.
Research from Google in 2015 reported that around 50% of B2B buyers were Millennials, while another study revealed that this new wave of purchasing professionals expect the same kind of personalised buying experience from the digital channels they use, as a traditional sales rep might provide. Studies also show that around 90% of B2B researchers use the Internet to find the information they need for their work, while nearly a third of B2B buyers now make 50% or more of their purchases online. All this places great importance on having a strong eCommerce presence for your business
Today’s top-performing eCommerce platforms integrate seamlessly with business and accounting systems like Sage or Pegasus to deliver a high quality, customised buyer experience. From account specific pricing, individual order histories and payment terms, to tailored special offers, deals and promotions, platforms from technology providers such as Aspidistra help B2B sellers to engage with and retain customers.
Interestingly, such platforms can also help to improve the efficiency of your sales team. It’s easy for reps to use your eCommerce site to access product information and real-time stock levels. What’s more, there’s no need to produce large, expensive printed catalogues, and more time for reps to focus on selling higher ticket items and resolving any customer issues.
With the right B2B eCommerce platform, you can streamline the buying process and makes procurement faster and more efficient. Spending on B2B eCommerce has increased substantially and investment in technology solutions to support these demands has grown at a speed that’s twice that of B2C eCommerce. Indeed, according to Shopify, over 80% of B2B companies understand that B2B eCommerce offers a vital income stream with massive potential that is yet to be fully exploited.
This potential manifests in many different ways. For example, the best eCommerce platforms support a significant increase in order value, conversion rate and margin. In fact, analysts estimate that the average B2B order value is over three times that of the average B2C order. There are other benefits too. When you deal directly with your customer end-users through an eCommerce platform, you’re able to learn more about their needs so that you can adapt your products, services and promotions to fine-tune the customer experience.
In summary, B2B eCommerce is here to stay. It’s transforming the way businesses sell and buy products and services, and by investing in 2019 in a smart eCommerce platform you can quickly begin to capitalise on the potential of selling online – and rapidly gain competitive advantage.
Research shows that nearly 70% of millennials prefer buying online to bricks and mortar shopping. So it’s hardly surprising that as millenials increasingly find themselves in purchase decision-making positions within B2B companies, their preferences and expectations for the digital experience are impacting on the actions of sellers.
At the same time, there is pressure on B2B suppliers to move sales and customer services processes online. Many of these companies are subsequently basing the functionality of their B2B eCommerce platform on B2C websites. But by concentrating on consumer priorities, B2B sellers risk overlooking the more intricate nature of the business purchase. When you commission your B2B eCommerce platform, make sure you focus on delivering an outstanding B2B customer experience. Here are some of the factors you need to consider…
Firstly, a lot of B2C sites are based around creating an ‘Amazon-like’ experience, where visitors have the opportunity to engage with large quantities of content, such as alternative product suggestions and cross- or up-sell promotions, as well be entertained by material that supports brand positioning. However, this is not necessarily a browsing experience that will appeal to B2B customers. In our experience, business-to-business buyers are looking for the fastest and smoothest way to make their purchase and get the job done, so they can move on to the next item on their ‘to-do’ list. Anything you can do to help will be well received.
Secondly, there’s the issue of creating a customer account and payment options. In B2C eCommerce, customers usually have the option to avoid the time-consuming, sales prevention process of account creation – they can check out as a guest if they choose to. Any added complexity in the B2C buying process can result in lost sales, which has prompted some B2B sellers to forego the account set-up stage and encourage payment by credit card. But we often see how this approach can lead to lost opportunities and disengaged customers.
Business-to-business purchases are normally made on account, and business customers are more relaxed about account application processes – products tend to be higher value, sales cycles are longer and relationships more long-term. Establishing an account-based relationship with your customers enables them to buy on account, and if your eCommerce platform is integrated with a business and accounting system such as Sage or Pegasus, they can benefit from a more personalised buying experience with customised pricing, discounts and promotions.
All this supports the longevity of B2B customer relationships, and reinforces the fact that unlike B2C, (where the focus is on one-off purchases), for most B2B companies customer repeat purchase and retention are high priority and critical to optimising lifetime value. Building this kind of B2B customer relationship usually involves a greater level of customer support and interaction than for B2C purchases, especially for more expensive or complex products, so your B2B platform needs to be capable of delivering such a user experience.
In the B2B environment, there’s usually a lower volume of enquiries, but they tend to be more complex to address, and here’s much more focus on providing a personal experience. Customer service teams need to have in-depth, detailed product knowledge and a good understanding of how products fit into a customer’s business systems and process. At the pre-order stage, it might be advisable for enquiries to be answered by the sales team rather than a customer support representative.
Finally, it’s worth reviewing your site’s content strategy to check that it’s geared to business customers. Business-to-consumer sites prefer to use short sound bites and simple, easily digestible copy, often prioritising entertainment value over substance. Business buyers want to see detailed product information, in-depth specifications, industry comment and advice on best practice. Such information helps customers make more informed purchase decisions – and it helps your business create a knowledgeable, professional and trustworthy image.
The manufacturing industry has seen significant disruption over the last ten years or so, especially in the way companies manage their approach to trading – from the move to customer self-service, to the evolving role of distributors in the sales ecosystem. Such disruptors are the direct result of digital transformation in the manufacturing sector and the accompanying growth in B2B eCommerce. However, in our experience, these disruptors are better viewed as business facilitators that need to be integrated into your business model to maximise their value. Let’s take a closer look at some of the challenges that come with business disruptors and how we can turn them into business opportunities.
Manufacturers with stockist or distributor networks need to adapt to an increasing desire by end-user customers to have greater control over the purchasing process – which usually centres around the ability to bypass resellers and buy direct. Larger customers that struggle to find additional value in their relationships with distributors and prefer to buy directly from the manufacturer often drive this disruptor. With increasingly sophisticated eCommerce platforms that integrate with business and accounting systems like Sage or Pegasus, manufacturers can provide a smooth and seamless experience that’s highly customised to individual customers.
Selling direct to end-users also has additional benefits, such as collecting data from customers to inform product development, improve personalisation and enhance the customer experience, and fix operational issues before they become business problems. However, it is important that manufacturers give careful consideration to the implications of the direct sales model before making their move. They must weigh up the benefits of data ownership and the potential for increased margins, against the strength of any customer relationship that distributors may have forged and the added value they bring to those relationships.
Customer demand for changes in the way manufacturers approach pricing is another disruptive challenge. Traditionally pricing for manufacturers’ products has been a complex, manual process based around the creation of individual prices for individual customers. This is time consuming, inefficient and error-prone. By embracing eCommerce that is fully integrated with existing business systems, pricing can be simpler and more transparent, based on the information for each individual customer account already held in Sage or Pegasus. Switching to a faster, more dynamic technology-based solution delivers a step-change in support and adds value to business relationships by enhancing the customer experience.
Getting to grips with the changing role of the business-to-business sales representative is also a potential disruptor for manufacturers. Automated sales processes and the self-service customer experience have now put marketing at the centre of the buying cycle, while the sales role is more of a support offering. Consequently, reps must be prepared to offer consultative advice and customer support at any stage of the sale process and play a particularly important part in selling higher ticket items. They also have the chance to optimise up-sell and cross-sell opportunities. In reality, sales and marketing functions must be more closely aligned to ensure a streamlined customer experience across a multitude of possible interactions.
Perhaps the biggest disruptor in the near future for manufacturers and wholesalers will be the Internet of Things (IoT). Smart, fully automated factories managed using real-time data received from machines, and in-field products transmitting a constant flow of information that predicts performance and operational issues are set to transform B2B buyer-seller relationships and open up opportunities to deliver new services across the entire customer journey.
Today’s business-to-business eCommerce platforms offer manufacturers and wholesalers a unique chance to provide their customers with a simple, seamless user experience, as well as the flexibility to meet continually changing market demands.
With analysts reporting that nearly three quarters of B2B buyers now say that buying from a website is more convenient than purchasing from a sales rep, and over 90% preferring to buy online once they’ve decided what to buy, it’s clear eCommerce is a must-have sales channel. Let’s take a quick look at some of the main business benefits…
Firstly, launching an online store gives your business more prominence and profile. And it provides a vehicle to build a trusting relationship with end-user customers who value the fast, hassle-free purchasing process that comes with a good eCommerce platform. In addition, potential customers can find your products and services more easily through Internet search engines – which results in more visitors to your site and more opportunities to sell.
With the right B2B eCommerce platform, you can offer customers a truly personalised experience. Integration with business systems such as Sage and Pegasus enables features like account-specific pricing, discounts and payment terms, personalised offers and promotions, individual order histories, and the display of real-time inventory levels at the ordering stage. You can personalise for international audiences too, with the ability to feature different languages and currencies
All this adds up to a customised, relevant experience for visitors, which saves them time and makes their job easier. And it means that your business can grow turnover, cut costs and and increase margin. At the same time, you also have the opportunity to build a direct relationship with your end-customer and can benefit from positive customer reviews left on your site.
By automating ordering and customer management processes, a B2B eCommerce solution means you need less resource to handle the simple, more repetitive tasks – and there are also fewer errors resulting from manual keying. It helps to streamline shipping processes and improve efficiency across your business. You can focus your team’s efforts on other areas of the company like new business development or in areas where more personal input is required – for example with complex purchases or higher ticket items.
Today’s best-performing B2B eCommerce platforms are intelligent, powerful and easy to use. They help to drive business efficiencies, attract new customers, and sell more products at a higher margin – all while delivering a high quality customer experience.
Traditionally, sales reps have been at the heart of almost every B2B company. Many of these businesses are reluctant to implement eCommerce for fear of alienating and compromising the work of sales people, whose performance is recognised as key to success.
On paper, it’s easy enough to incentivise reps with commission for their role in securing online purchases, or for allocating online customers to specific members of the sales team so they have the opportunity to develop the account. But in practice, using eCommerce to support your reps is slightly more complex.
In our experience, the best place to start is by ensuring you have the right B2B eCommerce infrastructure in place. This means deploying a high quality, highly flexible platform that can easily align with your specific business model. Make sure all appropriate product data features on the site and is kept up-to-date – customers will not trust your site if they find out that information is incomplete or inaccurate.
Pricing on the site needs to be accurate and current too, as well as being tailored to individual customers – otherwise buyers will simply bypass your site and phone into customer services to ensure they get the best deals. Pricing should incorporate any special customer terms, bulk discounts, promotions and offers, which involves integration of the eCommerce platform with accounting and business systems such as Sage and Pegasus.
Such integration can also enable you to calculate and track online and offline sales by customer, with activities across all channels monitored and recorded. Aggregation of information in this way helps you to allocate customers to sales team members based on a variety of factors. It also underpins the successful incentivisation of your reps by ensuring that online, telephone and yard sales are all accurately recorded and reps rewarded accordingly.
So how should you treat the incentivisation of online sales? Your eCommerce site should be a powerful sales tool in its own right, bringing in increased turnover while making the job of your sales reps easier. Arguably then, you could consider restructuring your sales commission package to reflect this change in situation – a change that could be better for both your business and your sales reps.
For example, say you previously offered reps 6% commission on new sales and 3% for repeat purchasers; after restructuring you could offer a flat 4% across all sales attributed to each individual sales person. With the increased revenue generated through your online channel, your business benefits from a better bottom line, while reps can also benefit from earning greater commission.
In short then, your eCommerce platform needs to help sales people sell more, and your sales people need to be rewarded for securing new business, repeat business, upselling and cross-selling. At the same time, it’s important that reps understand the competitive advantage that comes with a high performance B2B eCommerce solution and that this involves considerable investment from the business. Overall though, a state-of-the-art platform should support the generation of greater revenue per rep.