04 Oct Creating a B2B eCommerce Business Case
Up until now you have most likely been operating without a framework to build your strategy, select technology, design your customer experience, and launch your Digital Branch. Without a framework, answering questions like “How do we get to 10 or 20% of our sales in our Digital Branch?” become incredibly difficult. These types of goals have not been broken down into what levers are available to pull to get to those types of numbers. A framework provides the steps, stages, and levers for you to understand and execute against to drive real results out of your Digital Branch.
First things first though – why do you even need a framework? The main reason is to help keep you focused on your goals. There are 3 key steps in implementing your strategy framework – each of which will help you to focus more deeply on your strategy:
Step 1: Choosing the right framework
We are discussing two different frameworks, and for each one we’ve outlined why they’re useful. We’ve also provided examples of what types of organizations might use them. A key part of choosing the right framework is self-reflection about your own organization.
Step 2: Applying the framework to your goals
As you go through and create your strategic plan, for each goal that you create, you’ll need to think carefully about how it fits into your chosen framework. You may even find that it doesn’t fit at all. Either way, this process will again force you into thinking deeply about each of your goals and whether they’re well aligned to your overarching vision.
Step 3: Reviewing your plan against your framework
Use your framework to determine how well aligned your Digital Branch Strategy is with your strategy framework. Are you too focused on one particular element of the framework? Do you have a good overall balance of goals?
For best in class companies, the framework becomes a central tool in all aspects of the Digital Branch. Frameworks provide the following:
- “The framework is the tool that helps us prioritize the features that we are building.” Each feature is evaluated according to how it will affect the business case and the return on investment.
- “The framework provides all of our teams a common language.” Semantics are hard – especially between Marketing and IT. The framework defines the semantics by which the company talks about their Digital Branch. It helps everyone get on the same page.
- “The framework helps us measure our success.” KPIs are built on the goals in our strategy, framework and business case. Now that everyone in our organization has a common semantic language, we actually understand the measurements, what they mean, and even how to make them actionable.
At the end of a day, we use a Framework to provide clarity inside of our organization.
Two Frameworks to Consider
There are two primary frameworks that we will focus on:
- B2C / Customer Acquisition Framework
- B2B / Customer Adoption Framework
Most of you will want to start by understanding the latter: B2B Customer Adoption Framework, but it is important to understand both.
The B2C / Customer Acquisition Framework
The Customer Acquisition framework is for companies that wish to convert unknown customers into customers. This framework seeks to find customers that are looking for your products or services, bring them to your site, and convert them into a buying customer.
Most B2C companies use this simple framework. Some distributors that are going national with their Digital Branch will also choose to use this framework.
We need to start with a simple formula that this framework is based on:
Traffic times conversion times average order value (AOV). A simple formula that most eCommerce teams use as their primary framework for customer acquisition focused sites.
Every analyst report talks about how B2B buyers still use Google to research their products. You want to maximize all available and relevant traffic to every piece of content on your site. Not just every page. Every single piece and fragment of relevant content on the site. The website needs to be Search Engine Optimized, and (gulp) most of the time that means moving the catalog from behind the login screen. That doesn’t necessarily mean giving access to pricing and inventory, but make sure the search engines can find the basic product information. Traffic is about building your funnel really really big.
Once the B2B user finds the site, products, and content via search engines, we must direct them to what they are looking for in as few clicks as possible. You don’t know what your customers are looking for (or problem they are trying to solve) and even you knew what they were looking for you don’t know how they want to find it. 70% of people coming to your site want to use a search box. MultiChannel Merchant wrote when asked to cite the top features or functions they would most like from suppliers in the selling process, most business buyers chose enhanced search functionality on their website (60%). Conversion starts with search and navigation and ends with a simple and intuitive transaction. One page checkout, one click checkout, multiple payment methods (invoice, PO, credit card, etc.).
AVERAGE ORDER VALUE (AOV)
A lot has been written about how to increase average order value (AOV). Merchandising, bundles, kits, cross-sell, up-sell, related products and cross-reference. AOV is about maximizing the value of the order. Another way to represent the Customer Acquisition Framework is as funnel – like this:
B2B / Customer Adoption Framework
The customer adoption framework is a B2B eCommerce strategy framework and a key part of the Digital Branch. The primary question we are answering in this Framework is: How can we get customers to use and adopt our new site? Companies that choose this framework will be starting their Digital Branch by getting their current customers to use their new eCommerce site as a research and ordering platform.
STEP 1: THE TOP OF THE FUNNEL IS A CUSTOMER
In B2C, you might see a framework that looks like this for the purposes of measuring acquiring new customers. At the very top of a B2C funnel is often a customer that we do not yet know. At the bottom of the funnel pops out a customer.
As Distributors, often the top of our funnel is a Customer! We know them. They have purchased from us in the past, maybe many, many times. We may even know their families, where they are going on vacation this summer, and where their kids go to school.
This is fundamentally different from our counterparts in B2C.
STEP 2: THE CUSTOMER REGISTERS
The first thing a customer will do on your site is register. That means they get a username and password, and their account is associated with their company account in your ERP. This means they now get their pricing and their terms and conditions.
STEP 3: THE CUSTOMER USES THE SITE (BECOMES ACTIVE)
Distributors customers are typically asking 3 key questions when they come to your site:
- Do you have it?
- What’s my price?
- When can I get it?
Notice, that we have reached step 3, and we have not yet mentioned transacting or ordering. That is the beauty of a framework and funnel. We are moving the customer logically through each step. In Step 3, we want to help the customer simply use the site to answer these 3 questions.
STEP 4: THE CUSTOMER PLACES THEIR FIRST ONLINE ORDER
The customer registered and started using the site, now they place their very first order. If you ever want them to place another order online, you better make sure that this first order is flawless or what we call “The Perfect Order.”
STEP 5: THE CUSTOMER USES THE SITE REGULARLY AND PLACES MANY OF THEIR ORDERS ONLINE
The final step is the customer now using the site to answer their 3 questions and ordering on a regular basis.
There is still a funnel. By increasing registrations, you increase the opportunity for activity, first orders, and regular orders. Each of the steps is a lever for you to pull to generate more revenue.
The Conversion Points are Your Job
While the steps are important, the most important part of this framework is understanding the conversion points between the steps. These conversion points are how you can measure how your site is performing.
Ask this question for each of the below: What did we do to increase them? How will we increase them next month?
- How many registered customers did we have? What did we do to increase them? How will we increase them next month?
- How many sessions (activity) did we have? What did we do to increase them? How will we increase them next month?
- How many first time orders? What did we do to increase them? How will we increase them next month?
- How many orders? What did we do to increase them? How will we increase them next month?
- What was the Average Order Value? What did we do to increase AOV? How will we increase AOV next month?
Example KPIs for this framework might be:
Your job as a Digital Branch is to find ways of influencing the conversion between step.