Regardless of where a company is today, the internal conversation always comes back to trying to decide whether digital commerce will provide a return on investment. To set the stage for this article, consider these stats:
- 60% of B2B leaders surveyed believe their company does not generate enough data.
- Only 32% agreed that they know how to use their data in a meaningful and actionable way.
- When asked whether their company can track and calculate digital ROI effectively, only 27.7% said yes.
For business leaders unable to prove ROI, it becomes very challenging to make the case to implement a digital commerce project because the focus is on the cost of implementation, instead of the opportunities ecommerce holds. Fortunately, there are a myriad of persuasive arguments which will directly affect return on investment.
Uncovering ECommerce ROI Opportunities
The Power of Engaging Customers Digitally
Offering customers an online store where they can order your products isn’t exclusively about the customers themselves (even though we would like our customers to think otherwise). Having an online store gives brands a new channel where they can offer both loyal and new followers access to new and existing products, recommendations, promotions, real-time inventory, and additional shipping capabilities. In addition, it provides a platform where it’s far easier to experiment with new offerings before rolling them out company wide. Digital commerce also offers the ability to capture real time data on how customers interact with each one of these items, enabling business leaders to make data driven decisions, taking the guesswork out of how best to reach segments of your customer base.
Retain Existing Customers
In a world where customers are increasingly fickle and demanding, the old marketing adage “It’s cheaper to keep current customers than it is to attract new ones” has never been more relevant than it is today. Customers want to engage with the brands they love in a convenient and friction free manner. As much as some of us may miss it, gone are the days of calling Bob to place orders. Consumers expect to be able to access product information and perform research 24/7. Customers also expect convenience and flexibility when it comes to paying. Supporting multiple payment methods beyond standard credit cards (e.g. PayPal, Google Pay, Apple Pay, etc.) can reduce the possibility of customers halting a potential purchase at the very end of the process. End users also want to be able to order supplies in the field, check inventory and arrange pick up or delivery. While it sounds demanding and difficult to implement digitally, these needs are now table stakes to retain customers. Sadly, if their preferred vendor doesn’t offer this, customers are highly likely to find a new supplier who will.
Attract New Customers
Almost all the same considerations apply when attempting to attract new customers. Like your existing customers, new potential customers expect convenience, friction-free access to information, flexibility in payment methods, as well as robust shipping options. Digital commerce also provides an excellent tie in with social media and promotions targeting new customers. These provide new vectors to have people visit your site and browse your products. In order to successfully execute, it’s imperative for every stakeholder in the buying process to be able to do their role digitally with your business. For example, CSRs will still play an important role, but they might now be responding to questions via online chat features on your site in addition to traditional support over the phone.
Increase Wallet Share
Since the dawn of time, every business owner and marketer has been trying to conceive ways to capture more of their customer market. Share of wallet is a reflection of how important your products are to your buyers. The higher the share of wallet, the more customers are dependent on your product to perform their jobs. Driving higher share of wallet is one of the most impactful growth opportunities for manufacturers. In addition to helping drive revenue and decreasing the average cost of goods created, higher share of wallet is the key to unlocking the retention brands dream about. With share of wallet being key to business prosperity, B2B and D2C (direct to consumer) ecommerce is imperative for companies who want to be able to compete for market share among today’s digitally savvy customers. As much as everyone is sick and tired of hearing about the Amazon Effect, it truly has changed the rules of customer engagement.
Offer a Direct to Consumer (D2C) Channel
The past 18 months have seen the vast acceleration of manufacturers offering their own Direct to Consumer channels. As of Q3 2021, selling Direct to Consumer is the most popular topic in B2B marketing. Brand manufacturers who have set up a D2C channel have seen explosive, double digit revenue growth in the past year. While selling D2C does have business considerations to consider such as how fulfillment and shipping will differ, the ROI in adding a new stream of revenue has been revolutionary for companies, especially for those hit with hard economic times during the pandemic.
Provide B2B and Distributor Channels
Each of your customer types, or personas, desire to have a message tailored to them. The great news is that B2B software platforms like Optimizely and Shopify Plus make it relatively easy for clients to set up different channels, or branded microsites, for each type of customer. With these capabilities, it makes it more streamlined than ever to serve your longstanding and loyal distributors, while being able to directly onboard new businesses as well. Providing customers everything they need and more to do their job efficiently and effectively will grow your customer pipeline and earn increased share of wallet.
Grow Revenue Per Product
For years, manufacturers have fought to get their distributors to merchandise and market their products in the absolute best way in the absolute best locations. Unlike any other time in history, marketers are now in the driver’s seat themselves thanks to B2B ecommerce. Armed with websites and customer portals, savvy marketers are now able to reach their customers 24/7 to have their products in front of their customers at the moment of their decision. Superior digital merchandising, smart product recommendations and refined customer catalogs are driving increased revenue per product, while also increasing customer satisfaction and retention.
Increase Customer Self-Service Activities
For years, manufacturers have been hesitant to enable customer self-service activities. Partly, this was due to not wanting to put people out of a job. However, as digital change has taken over the industry, roles have evolved. Now that customers are largely enabled to self-serve 24/7/365 through their customer portal, CSRs have matured from order takers to product experts. The immense value CSRs are now able to provide customers when they need help or product recommendations is unparalleled. With consumers being able to do all their research and purchasing activities in the portal and message their CSRs with questions, it provides a fast, feature rich, friction free and dependable purchasing process. Additionally, internal streamlining of CSR duties can enable companies to reduce their personnel expense and decrease overhead.
Decrease Cost Per Customer Acquisition
Calculating cost per customer or cost per acquisition could be an entire white paper in and of itself. However, the one consistent theme to all of the steps to calculate this cost is knowing your data. It’s critical to know where your customers are coming from, why they’re coming to your website, which products they’re interested in, how long it takes them to complete an order and what obstacles they run into. Analyzing all this data empowers your team to make adjustments, which in turn will decrease the cost per customer over time.
Expand Product Gross Margin
When calculating the ROI of an ecommerce solution, one of the most often overlooked sources of ROI is in the higher product gross margins that come from increased sales. Savings opportunities include buying materials used to make items at a reduced cost, calculating marketing costs across more merchandise and spreading overhead out across larger commodity quantities. When these savings are taken into consideration, it’s clear how quickly boosting your product gross margins can have a vast impact on your profitability, making a great case for ecommerce.
The Ultimate Result? Boosting the Company’s Market Capitalization
For readers who may not understand market capitalization – It is the total value of all of a company’s shares of stock and is calculated by multiplying the number of stock shares outstanding by the current share price. For example, if a company has issued 1 million shares and its share price is $50, its market cap is $50 million. Shares outstanding includes all shares — those available to the public and restricted shares available to and held by specific groups. Market cap allows investors to size up a company based on how valuable the public perceives it to be. The higher the value, the “bigger” and “less risky” the company. For C-Level executives, increasing market capitalization is incredibly rewarding. Not only does it signify the company has been doing a great job, but it provides the opportunity to attract investors to help obtain cash for further growth initiatives.
In summary, there are a multitude of ways in which implementing a better ecommerce infrastructure can provide ROI for your company. BlueBolt helps manufacturers and distributors alike modernize their ecommerce offerings with platform recommendations and implementation, connecting legacy systems and integrating third party applications to create a sleek and efficient framework. The result is a user-friendly interface for customers which enables them to self-serve 24/7, while streamlining internal processes. The impact is a return on investment in many areas across the business which any discerning business leader will be excited to realize.