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.
Although perhaps not as visible as the explosion in online B2C trading, B2B eCommerce is increasing at a pace. To put that in perspective, Frost and Sullivan report that global B2B eCommerce sale will exceed $6.6 trillion by 2020, compared to $3.2 trillion for B2C.
So despite the more complex nature of B2B selling and the need to address some unique challenges, reducing or removing friction from the sales processes by enabling customers to self-serve is helping to boost revenue and margin for manufacturers, wholesalers and distributors. According to the Harvard Business Review, companies that make buying easy are over 60% more likely to record a high quality sale, while McKinsey says that more than 85% of B2B decision-makers prefer to use self-service tools for reordering, rather than having to deal with a sales rep.
These figures should come as no surprise. Around 50% of today’s B2B buyers are millennials – they’ve grown up in the digital age and they expect to be able to make business purchases using intuitive online technology that delivers an Amazon-grade customer experience. However, we still see many B2B sellers relying on legacy, under-specified eCommerce systems that are unable to provide a smooth and seamless buying experience. Let’s look at some of the ways other companies are improving their online sales performance by meeting the expectations of their buyers… watch b2b sales grow
Be the King of content – online buyers need access to a raft of detailed, accurate background information on which they can base informed purchase decisions. Make sure it’s your company’s eCommerce website they come to for the best quality free content, and not your competitors.
Provide comprehensive product information – ensure it’s up-to-date, detailed and consistently presented across all your products. Your eCommerce website has to function as a product catalogue that allows buyers to easily find, compare and understand everything about the products they want to buy.
Make the buyer’s job faster and easier – digital savvy buyers need to be aware of all the timesaving, self-serve features you’ve incorporated into your site to make their lives easier. Pay special attention to ensuring that site design, navigation, search capabilities, and the checkout process are fully optimised for your customers.
Use smart technology – choose a high performance eCommerce platform that delivers a streamlined, engaging experience for buyers, and is capable of driving a holistic omnichannel approach. Implement a system that provides customers with account-specific pricing and customised terms, allows them to review their order history and offers different payment options. By ensuring that your eCommerce platform integrates with the business accounting system, you can provide an engaging, personalised customer experience that features real-time stock levels, automated re-ordering, tailored rewards, and special up-sell and cross-sell promotions.
Put mobile first – increasingly buyers work on the move, with recent research showing that around half of B2B search enquiries were made using mobiles. So make sure your site is optimised for mobile in order to deliver the best possible experience.
Join the conversation – incorporate live chat into your system to help build deeper relationships with your customers, resolve issues quickly, and increase order values.
Don’t make shipping a stumbling block – companies that have problems getting their customers through the checkout often cite shipping issues as the cause of lost sales. Therefore it’s important to ensure that selection of a shipping option is an intuitive, automated process, that prices are reasonable and that there are no unexpected costs. From past experience, adding in a fast delivery alternative is also a good idea.
Work the way your customers work – remove as much friction as possible from your eCommerce system by aligning your workflows with the way your customers want to do business.
As the popularity of B2B eCommerce as a preferred sales channel continues to grow at pace, there are still plenty of manufacturers, wholesalers and distributors that remain to be convinced of its benefits. This is despite all the evidence suggesting that setting up an online store helps to enhance the customer experience, boost order value, increase margin, cut cost and reduce processing errors.
The main concerns for these companies tend to be around security issues; convincing customers to embrace the new technology; ensuring that the system can deal with the complexities of B2B sales processes; and compromising the personal relationship that exists between sale rep and customer. But with Frost and Sullivan forecasting that global B2B eCommerce sales will hit over $6.6 trillion by 2020, not recognising the evolving expectations of customers and failing to embrace B2B eCommerce could significantly compromise business performance.
Common perceived B2B eCommerce challenges
Here are a few of the common challenges we see on the journey to eCommerce transformation, as well as some of the benefits companies can expect to accrue…
Firstly, successfully moving existing customers over to a new digital sales channel is a big worry for many businesses. Some long-standing customers might be so entrenched in dealing with their personal rep or account manager that they see no benefit in going digital. Does that mean you’ve wasted time, resource and money on a white elephant?
Far from it – recent studies say that nearly 75% of B2B buyers research their purchases online, and over 90% want to order online, so you should be able to move the majority of customers over to your eCommerce platform with ease. With the right system, they’ll find it easier to manage their orders, schedule recurring orders and keep up to date with news and special offers, while your sales team can focus on closing new deals and growing existing customer accounts. If your customers are reluctant to use your eCommerce platform, chances are it’s not making their job any easier – so the site is not doing what it’s supposed to be doing and you’ll need to address any shortfalls in the user experience or technology.
Secondly, some businesses remain unconvinced that an eCommerce platform can handle the complexities of business-to-business trading. This skepticism often comes from the knowledge that many B2B platforms have evolved from b2c solutions, prompting the questions: are they fit for purpose and do they deliver the unique features required for B2B? However, the fact is that leading vendors like Aspidistra have made big investments in developing bespoke digital solutions that operate smoothly and efficiently to provide a world-class customer experience.
Before commissioning a B2B eCommerce provider, careful research of vendors and their solutions will help you identify a platform that offers intelligent, built-in functionality for features such as account-specific pricing, discounts and promotions; order history and real-time inventory levels; the facility for multiple buyer roles within each account; and scalability to support channel growth. With the need for companies to provide the best possible resources for buyers, partners and sales teams, top B2B eCommerce providers are able to integrate eCommerce platforms with other business systems to deliver a seamless solution. This helps companies generate new sales revenue, at a lower operating cost with increased margin.
Another challenge that companies perceive they face is in managing customer relationships once a digital channel is operational. Traditionally, sales reps or account managers have a close relationship with B2B buyers, offering them a hands-on, personalised service. Although eCommerce is becoming increasingly popular with buyers, especially for smaller ticket items, some sellers worry that without this close, personal relationship, customer service will suffer.
However, with a best-in-class B2B eCommerce platform, you get the best of both worlds. Reps and customers have a shared view of any issues, and while customers are empowered to manage their own purchasing process, their rep is only a click or phone call away if any personal assistance if needed.
Implementing the right B2B eCommerce solution
If you’re thinking about implementing a new eCommerce solution or upgrading a legacy system, here are a few factors that are worth considering…
Make sure you do your research – there’s a lot of expert opinion out there and information on eCommerce best practice. Look for all the information that relates to your kind of business and the sector you work in – and equip yourself with the facts before you make any decisions.
Ask prospective vendors all the difficult questions at the start of the process – get them to confirm their B2B capabilities, look at example of their work and make sure they are a good fit for your business. Choose a provider who can scale their solution as your business grows and support you over the long-term.
Remember that customer experience is at the heart of successful selling – with the complexities that come with B2B, it’s best to ensure that you try to offer a streamlined self-service ordering process, backed by the ‘human touch’ support of your sales team.
Despite huge revenue-earning opportunities for manufacturers, wholesalers and distributors, many B2B eCommerce initiatives are still failing to realise their potential. Analysts report that a large number of B2B eCommerce systems currently generate less than 10% of a company’s overall turnover, and while most have trialled some kind of B2B eCommerce activity, many small and medium size organisations have yet to adopt an authentic B2B eCommerce platform.
But the eCommerce landscape is changing fast as more and more B2B sellers embrace digital transformation. Here are some of the key considerations that are helping these companies make smarter decisions about transitioning to eCommerce…
Increasing revenue – not the only goal
Firstly, although increasing revenue will inevitably be a high priority, it should not be the only goal. With the right eCommerce solution, companies can make dramatic improvements to operational cost and efficiency through automating low value tasks and cutting out manual processes to eliminate errors, as well as enhancing customer service. It’s the sum of all these benefits that makes the real difference in terms of improved profitability and increased customer loyalty.
Secondly, it is critical for companies to understand the role of every team member involved in the buying cycle, how an eCommerce channel will impact those roles, and what needs to be done to secure support from all interested parties. For example, sales reps may feel threatened by the introduction of online selling, seeing it as rendering their services redundant. As a result, they may be reluctant to onboard existing customers. Likewise, if customers fail to embrace eCommerce, customer services team members end up having to manage yet another sales channel without the business enjoying any significant returns. To secure strong buy-in from all staff, the eCommerce platform must support the jobs of everyone involved in the customer lifecycle.
B2B eCommerce built from ground-up is best – but why?
Next, the complexities of B2B selling are often overlooked or misunderstood. This is most obvious in eCommerce platforms that were originally designed as B2C systems and are unable to deal with requirements such as account-specific pricing, discounts and payment terms, personalised order histories, detailed product specifications, real-time stock visibility, and customised promotions. The best performing B2B platforms are developed from the ground up and seamlessly integrate with other business and accounting systems to address the specific challenges of selling online to other companies.
In addition, although B2B selling is becoming increasingly automated, (particularly for lower ticket items and regular repeat purchases), there will always be a requirement for ‘the personal touch’ from sales reps or customer services teams – especially when it comes to higher value, lower frequency sales. It is therefore essential that customer-facing personnel have easy access to the platform so that they are able to troubleshoot any issues and stay informed of all customer activity.
In summary: Choosing the right B2B eCommerce platform is also about choosing the right B2B eCommerce technology partner. Companies need to be able to rely on responsive and expert support for their eCommerce ecosystem, which means partnering with a provider that understands the complexities of B2B online selling, and how technology can add value for manufacturers, wholesalers and distributors across the entire organisation.
Manufacturing firms that have always managed their business-to-business customer-facing sales processes using traditional tools such as phone, fax or email are often reluctant to make the move to online trading. Despite an acceleration in the shift to B2B eCommerce, many of these firms find the idea of adding a digital sales channel worrying or confusing and may lack the understanding or commitment to make eCommerce a business reality.
In such circumstances, we often find the best way to progress is with the support of an eCommerce leader – someone within the business who has a strategic vision of what a digital transformation project involves, a clear view of an end state, and the ability to align all departments around this vision to deliver a successful outcome that benefits all parts of the organisation. In other words, someone who can own the project.
eCommerce Leaders need pan-business visibility
We sometimes see the role of eCommerce leader allocated to a manager working in marketing or IT, but these appointments are frequently problematic because neither department has the pan-business visibility and knowledge required to deliver an eCommerce vision across the organisation. Introducing eCommerce will change processes across all areas of the business, so manufacturers need to identify a leader, (typically from the ‘business management’ function within the company), who has the 360-degree perspective necessary to deliver a successful eCommerce project.
In the sales department, for example, the switch to self-service ordering could interfere with long-standing customer relationships that have been established by the sales team. The eCommerce leader would need to recognise any issues that are likely to be created and collaborate with sale professionals from the earliest stages of the project to agree an approach that would attract the full support of the entire department.
At the same time, implementing an eCommerce solution that fully integrates with accounting systems so that buyers can see information like personalised prices, shipping details and real-time stock levels, will dramatically increase efficiency by automating interactions that would previously be undertaken by the customer service department. The eCommerce leader will need to work closely with customer services representatives to ensure they remain engaged, motivated, and their roles evolve to align with and fully support the new eCommerce channel.
The eCommerce Leader’s role includes helping to reduce the workload for IT
Without the real-time integration of eCommerce software with existing business systems, companies often see an increase in workload for their IT department. A crucial part of the eCommerce leader’s role is to choose a digital platform that reduces the workload for IT and enables the department to focus on optimising systems in other areas of the business. Again, this requires the capabilities of an eCommerce leader who is willing to collaborate with colleagues and who has a clear understanding of what the technology behind a digital sale channel needs to achieve.
The marketing team will no doubt want to ensure that the digital platform delivers a smooth, slick customer experience that’s as good on a mobile device as it is on a desktop computer. The eCommerce leader must balance this requirement with the practicalities and technology integration needs demanded by the customer services and IT departments. And last but not least, there’s the finance department; self-service ordering brings different kinds of transactions and new customer payment options, which the eCommerce leader needs to understand as part of a departmental workflow that can be fed into the overall B2B eCommerce plan.
A holistic view, leading to a comprehensive roadmap.
With this kind of holistic view of the business and a clear vision for the future, the eCommerce leader can develop a comprehensive roadmap for the successful transition to online trading. While ensuring that workflows from across the business are represented in their transformation plan, the eCommerce leader also represents the voice of the customer – someone who can step in and say which processes and interactions work at a user level, and which don’t.
The eCommerce leader must decide what qualifies as a successful project, and which metrics need to be taken into account when measuring achievements – at a departmental level as well as at an organisational level.
Manufacturers, wholesalers and distributors considering modernising their B2B eCommerce websites will often use the comparison of return-on-investment when assessing the performance of legacy systems against a new platform. Most of the time, however, the true value of ROI is a challenge to work out because it involves reviewing many variables, rather than the simple calculation of: (revenue from new solution – revenue from legacy solution) x 100 / investment.
A broader assessment is required in order to provide more accurate and informative insights, and this should include closer inspection of the following areas…
A platform that automates the entire ordering process effectively, from product research to despatch, can deliver huge gains in efficiency. If your current system contains manual processes for pricing, ordering, stock management and customer communication, for example, you could be risking expensive errors and racking up unnecessary operating costs. These inefficiencies are difficult to factor into ROI calculations, but their impact on both turnover and margin can be significant.
Business-to-business sellers often approach us because their existing eCommerce websites are failing to maintain sales revenues and retain customer loyalty. Poor eCommerce performance usually stems from a poor customer experience, where buyers have to jump through too many hoops to get the information they need or to make a purchase.
For example, we frequently see websites where buyers are unable to search their order history, or access personalised pricing, discounts and offers. Inadequacies such as these often arise from websites that are not properly integrated with business and accounting systems, which in turn can impact on customer engagement and lead to lower returns per customer and ultimately compromise customer lifetime value.
The technical capabilities or failings of an eCommerce platform also have a big impact on the volume of site traffic, bounce rates and order values. If customers and potential customers get frustrated, they will go elsewhere – for example, if they can’t easily find the products they’re looking for because of poorly designed navigation, if links are broken or pages fail to load. We advise B2B companies to check their site analytics for insights on overall site and individual page performance in order to understand which areas of the site are losing revenue and where improvements can be made in the future.
Maintaining competitive advantage
Our experience with a wide range of B2B sellers highlights the challenges of arriving at an accurate eCommerce ROI figure for legacy systems. However, it is clear that companies need to take a more wide-ranging view of their current system so that additional factors like those described here are taken into account. This holistic assessment will help to ensure that companies make timely, better-informed decisions about upgrading their eCommerce websites so that they are able to maintain competitive advantage and increase profitability.
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.