Over the past few weeks we’ve been discussing how to create more revenue with a strong eCommerce solution, from tactics that grow revenue within each product line, to finding new customers, to retaining existing customers by adding value and increasing efficiency. In our last post of the series, we’ll discuss one of the biggest challenges mid-sized manufacturers and distributors are facing, particularly in the era of Amazon – growing revenue per customer.
Increasing share of wallet among existing customers means not only casting a wider net, but taking a deeper dive into the customer’s organization. Manufacturers and distributors need to really understand what their customers are buying and also how they like to buy. Building individual customer profiles is an important activity, but you also need an eCommerce solution that can help recognize certain buying trends among groups of customers regardless if they purchase online or through traditional channels. Along with personalization techniques, these patterns can provide a powerful combination that results in effective marketing strategies based on a true understanding of your customer. As a result, lower value selling tasks can become automated, giving your customer service representatives (CSRs) and salespeople time to focus on higher value initiatives.
It’s not enough to know who your customers are anymore. You have to understand their behavior, and particularly how they interact with your company. Do they prefer to purchase online, through traditional channels or a combination of both? Are they searching for products in a custom catalog online but ordering from a salesperson? Do they tend to re-order online but need help for larger orders? Building customer profiles or even personas can help you think like a marketer, and generate more revenue with every order.
Insite has helped launch hundreds of manufacturing and distribution eCommerce solutions. Although opportunities may exist that are unique to your organization and customer base, there are some common strategies that can help point you in the right direction to build more revenue with every deal, per individual buyer and across well-defined customer segmentations. Let’s start with selling.
Cross Selling and Up Selling
We’ve talked before about the benefits of connecting products together to upsell customers during an order. Understanding customer buying profiles will help you identify good opportunities for successful upselling tactics. Perhaps there’s an alternative product on which the margin is larger. Boosting and burying techniques can help float those products to the top, rather than ones more commonly purchased that deliver less margin or revenue. Perhaps a lower margin product experiences more returns or has performance issues, but seems to be a popular choice. This is an excellent opportunity to suggest a higher quality product in its stead.
Cross selling, particularly for distributors who sell many complementary product lines, can also boost revenues. Perhaps you can suggest purchasing a spool of wire when a wire duct is about to be purchased, for example. Understanding the accessories that are typically purchased or are complementary to a specific product, as well as creating unique kits and bundles, are commonly used cross selling tactics. A strong eCommerce solution can help automate those tactics and accelerate revenue opportunities. Often, experienced salespeople can help create these complementary “sets” based on past experiences to help train the system.
For both upselling and cross selling, however, it’s important to have an in depth understanding of your customers’ buying preferences and behavior. Additional selling tactics are just “white noise” if they’re not perceived as a relevant suggestion that will save the customer time in the long run.
Understanding customer behavior is also key to introducing new products to existing customers, and identifying relevant products. Lists can be viewed a bit like a “secret weapon” in this scenario. Custom lists can be created that show customers you understand their buying history and habits. A list can be viewed as a consultative tool that provides value, and demonstrates that you’re thinking about what would make their buying experience more efficient. In addition, lists can help customers feel as though they’re receiving a personalized experience and in some cases, may make it easier to onboard them into a new eCommerce system.
Customers should be encouraged to share lists among their own teams, creating a way for them to increase productivity and potentially save money as well. Offering free shipping based on the higher spend in a shared list is one creative way to encourage a higher spend per order, for example.
In many ways, using lists as a promotional tool can be a powerful way to increase share of wallet without being annoying. Sales can create a list of new products that simply shows up in a customer’s file. Once notified that a list of suggested “new products” are in their profile, customers may order samples, turn the list into an actual order or save it for later viewing.
Too often, manufacturers and distributors take an internal approach to product organization and taxonomy which can be an obstacle to increasing revenue. Understanding customers will help develop an “outside in” approach to information. Defining and naming attributes in a way that helps researchers and buyers find them is key, but understanding how they really “think about” their purchases provides the underlying information that builds really powerful internal search mechanisms.
For example, many organizations provide search by brand or product line. But customers may not be loyal to a specific brand. They may instead choose to purchase based on price, reputation or review, or functionality. Most customers may have several different ways they find information, and it’s important to understand all the potential “views” that may lead to faster relevant search results, and more items in their shopping cart.
Whether you’re using lists, sophisticated search, or cross selling and upselling, any of these promotions need to be designed based on a deep understanding of your customers’ unique buying behavior. This means not only at the point of purchase, but at the beginning of the cycle when they’re only beginning to look for a solution. B2B commerce doesn’t rely on the type of impulse buys that happen every day in retail, but we can save customers time and money by suggesting relevant additional products in a thoughtful, collaborative manner. In that moment they’re buying more from you, because you are making their lives easier.