Many traditional B2B companies are scared to embrace business to business eCommerce because they feel it will ostracize their sales representatives. Sales representatives are the life blood of almost any B2B organization, and making sure they are happy and incentivized to perform well is key to success.
The answer to making B2B eCommerce work well with sales reps is simple in theory. All you need to do is ensure that sales reps receive commission for influencing online purchases. Perhaps better yet, sales / customers that start entirely online are given to sales reps as leads or accounts they can manage to grow and build into larger accounts with incentives.
However the execution of this and management of this to be successful is much more complicated in practice. Thus the need for a well thought out strategy that can be put in place via platforms like Magento.
Lets start with the why?
B2B eCommerce growth is expected to exceed 7% each year from 2016 to 2021, and is already accounting for 11% of total eCommerce sales. Therefore, ignoring over 10% of sales, with expected growth showing it will likely reach closer to 20% of total sales in coming years is a major miss step.
It is also clear that almost all B2B purchases start with online research, and having a high quality digital presence via B2B eCommerce will lead to more overall sales.
So where do you begin?
I believe there are several components to getting this infrastructure in place to be successful. The first is infrastructure. Infrastructure requires having a high quality flexible B2B eCommerce platform that can adapt to your specific business model. Most B2B companies are unique in some manner, and thus the platform must adapt to that uniqueness.
The platform alone is not enough. You must ensure other elements are in place too. Appropriate product data that is constantly up to date across all product lines is essential to B2B eCommerce. If your data isn’t up to date, customers will simply call in and not use the website because it isn’ t accurate or could be misleading with old or not accurate product data.
Just like product data, customers will not buy online if pricing isn’t accurate. If they know they can get better deals by calling in, why would they ever buy online? B2B pricing is not always so simple. You may have tiered pricing for certain bulk discounts on different items, different pricing per customer or customer groups, and other unique pricing offerings. Despite this complexity, this can all be accomplished via most modern B2B eCommerce platforms.
Unfortunately the train doesn’t stop here. Most B2B companies need multiple systems to succeed, and an eCommerce platform alone cannot house all the data and work flows needed in an organization. Thus the need for systems like an ERP, CRM, OMS, PIM, and other systems depending on your company. For you to properly calculate total sales per customer, you need to integrate systems, specifically your ERP and CRM systems so that you can have a clear record of both online and offline sales for all customers. This gets especially tricky for customers who may buy via many different people and channels. Aggregating this data is key to being able to properly incentivize your sales rep.
Imagine that you are a sales rep and you get a major company like CVS to sign up with your company and they are now buying online, but some customers are also calling in from certain CVS locations to buy via phone. You know that this is bringing in millions of sales per year, yet you are only compensated for a small portion of these sales because they are not all being tracked. This would be infuriating and lead to turnover.
Lastly, once you have this infrastructure in place, you need to ensure you can view all sales per customer, and assign customers to sales reps based on parameters like location or who actually created the first touch point with the customer.
So in Summary you need:
- A Flexible B2B eCommerce platform
- Accurate product data that is up to date and easy to find
- Accurate pricing per customer or customer groups
- High quality integrations among major systems like ERP, CRM, etc
- Ability to view customers total sales across online and offline sales channels associated with sales reps
- Ability to assign customers to sales reps in the appropriate system, most likely your CRM
So now, how do you incentivize sales reps via website sales? This really depends on your margins and business. There are many ways you can do this without hurting your bottom line.
An important thing to do from a management perspective is to make sure everyone is on the same page regarding the investment required to make the website successful. The website is a sales tool that already does or can bring in significant revenue on its own and makes the sales reps job easier. Therefore you may need to reduce the commission percentage per sale or new customer but ensure that all sales through the website are still accounted for, so that commission can be given to reps.
An example of this is that the old model may have been 5% of new sales results in commission and 2% of repeat sales from those customers results in commission. The new model is simply 3% of all sales attributed to the sales rep results in commission. If total sales have grown way beyond old sales because of the website, or that 3% includes existing customers purchasing through the website that in the past would not have been considered commission, this can result in more commission for reps, and more total sales for organizations.
Regardless of what you do, several things need to happen. The website needs to help reps sell more and the reps need to be compensated for customers they bring in that now buy online, or for up-selling customers who only bought a little online previously.
Additionally, the sales organization and company as a whole need to recognize that B2B eCommerce digital transformation requires investment, and that this investment has to come from somewhere. Therefore compromises within the organization have to be made somewhere to account for this investment.
Some things to consider in regards to becoming more eCommerce focused:
- Ensure sales reps understand the competitive advantage of having a high quality B2B eCommerce website
- Ensure sales reps also understand this takes significant investment
- B2B eCommerce should result in higher revenue generated per rep