B2B Cart Abandonment is Not B2C
Myths of B2B eCommerce
Featured Guest – Justin Racine
In episode 1 of “Myths of B2B eCommerce”, Justin Racine, Director of Marketing & eCommerce at Geriatric Medical and Surgical Supply joins us to discuss the surprising statistics around B2B cart abandonment, the power of analytics to enable a company’s sales representatives to be more efficient, and the evolving role of the B2B sales representative.
Statistics about high cart abandonment rates in B2C make many B2B marketers assume that cart abandonment in B2B is also generally just as high. According to Forrester, 88% of B2C web buyers reported they have abandoned an online shopping cart without completing a transaction. And according to Business Insider, B2C merchants left nearly $4.6 trillion on the table in 2016. The podcast moves into exploring how high reported cart abandonment rates in B2C contrast with B2B.
Geriatric Medical is a medical products distributor based outside of Boston, Massachusetts. The company was founded in 1945 as Bo Peep Diaper Delivery Service. When it was founded, Bo Peep would pick up used cloth diapers, clean them and return them to the users. Fast forward 70 years later, the company evolved into different areas. What was once a one-product business turned into a full-service distribution company for health care facilities in New England, with over 30,000 products. Geriatric Medical sells to long-term care facilities, hospitals, home-care health providers and anyone who utilizes or needs health and medical products for their patients and end users.
When Geriatric Medical started its eCommerce journey four years ago, it was all about giving customers easier, more efficient ways to buy. Geriatric Medical wanted to deliver their customers the best opportunity to find what they were looking for quickly, add it to the cart and proceed to their checkout so they could move onto other important parts of their roles. Overall, Geriatric’s eCommerce journey has always been about freeing up the time that their customers traditionally took to place orders to allow them to do what’s really important in their roles: take care of the patients.
After implementing InsiteCommerce®, Geriatric Medical wanted to explore whether cart abandonment rates on their eCommerce platform were aligning with the high abandonment rates other companies were reporting. From there, they would establish a retargeting strategy to ensure customers who weren’t finalizing their checkouts were being advertised the products they were interested in one point in time.
Cart abandonment rates are so valuable because they traditionally enable companies to understand whether their customers are looking elsewhere for products. In B2C, typically if people are leaving products in their cart, they’re likely buying somewhere else or doing further research. So Geriatric Medical assumed there would be an opportunity to recapture revenue that was potentially lost from their current customer base by exploring their own rates. If their cart abandonment rates were as high as they believed they would be they would develop a strategy to ensure they were retargeting where necessary.
Geriatric worked with Insite to build out reports and portals within InsiteAnalytics for eCommerce to find out whether their cart abandonment rates were as high as they assumed them to be. Surprisingly, they found out essentially the opposite. Geriatric Medical was seeing a 99% cart fulfillment rate – a less than 1% cart abandonment rate. This was a shocking finding compared to the high average cart abandonment rates in the industry. They thought there would be a larger opportunity to recoup some revenue that was lost. But what they were seeing was that the customers who were ordering with them were generally completing their orders and rarely abandoning.
Only 647 of 75,000 unique carts were abandoned on Geriatric Medical’s eCommerce site in 2017.
We’ve all heard about the reported death of the B2B salesperson, Racine does not agree. The sales person’s role has certainly changed but it has not gone away. It has become much less about ordering and more about consulting, freeing up sales people from the mundane tasks to those that are more high-value. Geriatric Medical’s sales people work to make sure their customers have the right, approved items. They work with the order placers to make sure they are placing the right orders. The sales people are working as consultants more than anything else. That has helped drive the ability for Geriatric Medical’s customers to order the items they know they have to order and not have to abandon their carts if mistakes are made.
A lot of buyers making purchases with Geriatric Medical have clinical roles and backgrounds and their main responsibility is to take care of their customers, not to order medical supplies. Therefore, Geriatric Medical’s customers don’t always have a lot of time to shop around. They are ordering from Geriatric because they are used to the process and know they will receive great customer service from everyone in the organization.
The majority of B2B customers don’t shop, they buy. Some of Geriatric’s customers do shop but it’s on a small scale. When they do shop it’s for products they don’t buy very frequently. However, when people are buying, they are ordering their regularly purchased items from the distributor that they are working with and have the relationship with. It’s about a level of service that is second to none. Any good buyer working with Geriatric is going to stick to a set formulary of products and not look to mix it up every other week.
At least for Geriatric’s specific industry, where there are real patients to care for, buyers shouldn’t mix up the products they are buying because some products can have different features from brand to brand. For example, you wouldn’t buy a different wound dresser from week to week because nurses have grown used to a certain brand and understand how to use it.
A lot of B2B eCommerce is really about driving organizational and business efficiencies both for the buyer and the seller.
The seamlessness of adding products to a cart and checking out is extremely important for Geriatric Medical’s customers and their success. Once items are added to the cart on their site, someone could place an order in less than 5 seconds. That’s because the entire checkout process is on one screen – they can enter their PO, add any additional notes and pick their delivery date. Their customers are able to place orders very quickly and require a very seamless checkout process. Customers can see which items they have purchased from before. In addition to the formulary list, they can also view their purchase history list. They know what brands they have purchased in the past.
Geriatric also holds their customers’ carts on their websites for a few days, in case of an emergency. Holding onto their carts longer and letting the customer see what they have purchased in the past reduces the order barrier.
Geriatric uses data analytics to determine the different creative elements that are needed throughout its marketing and eCommerce projects. They use data to look at statistics like cart abandonment but they also use it to look at how their sales team is doing. Then they use the data and analytics to be proactive with their sales people so they can reach out and be proactive with their sales team and arm them with powerful reports.
For example, a sales person can see that a customer is no longer buying vinyl gloves from Geriatric. The information can be found on an analytical report that Geriatric sends out to their sales team each week. A sales person can reach out to that customer and ask what is going on, whether they have found a lower price or a different brand.
Geriatric is just beginning its venture into a more holistic view of analytics. The company wants to be able to use analytics to view what their customers are doing on traditional and digital channels. With InsiteAnalytics, Geriatric doesn’t just track orders that have been placed on its eCommerce site, it also tracks orders that have been placed by phone with sales people, or orders via EDI. Geriatric can dive into each individual channel and see where orders are coming from.
Geriatric can make a lot of data-driven business decisions with the help of holistic analytics. For example, if it sees an increase in customer service department orders, they can often tell that there may be something wrong with the eCommerce site experience, causing customers to elect to buy from customer service representatives instead. There may be some feature or some section of their website that isn’t easy or intuitive for their customers to be using.
InsiteAnalytics takes a holistic view and can help businesses understand whether a customer started online, or finished with a sales representative. Insite has helped Geriatric immensely.
“I have a lot of experience with other commerce platforms…but the connected commerce idea with InsiteAnalytics working alongside InsiteCommerce and Google Analytics, and being able to pull other pieces of data in and hearing where it’s going from a roadmap standpoint is all really exciting for us,” Racine said.
With a holistic view of commerce and traditional sales, the role of the sales person changes. When Geriatric started the process in 2016 with Insite, its salespeople saw this eCommerce platform as their replacement. They were not as onboard as they are now to learn the features, promote it to the customers and be a guru of the site.
It was important for them to learn that eCommerce was not their replacement, but was another powerful tool that they could have in their toolbox to help them sell the products. It wasn’t a replacement it just changed the way that their sales people operated. They didn’t need to take orders each day, they were able to focus on fostering relationships and working with their customers to become a better guide for buying.
“We’re hiring more sales people now than ever. Our sales team is larger than it has been in our company’s history,” said Racine.
Geriatric customers enjoy the ability to self-serve online, while sales people help consult and educate. The sales team conducts business reviews with customers, makes them aware of product trainings, webinars or in- services, and helps them find new products that might save them money, and ultimately provides them with better clinical outcomes.
“Our sales people make sure that our customers and their patients have everything they could possibly need to allow for the best possible patient care,” said Racine.
Companies that have relied entirely on eCommerce have re-hired sales people, recognizing that in order to introduce new products, and help customers with more complex products or designs, you need to have that expertise and experience to help guide them. That’s the value of commerce and traditional sales combined.
83-84% of Geriatric’s company revenue is coming through their eCommerce web store. A lot of B2B organizations might be in the 5, 10, or 15% range. Because so many of their orders are coming through the website, it allows sales reps to be less focused on placing orders on a daily basis and more focused on developing and fostering relationships with specific customers, working with their formulary, and introducing them to knew clinical education programs that might be out there.
A lot of B2B companies may be at the beginning stages of their commerce. When Geriatric partnered with InsiteCommerce in 2014, they were at 55% online but in just four years that increased to 75-80% revenue in the eCommerce web store.
With InsiteAnalytics, InsitePortfolio, InsiteCommerce and a solid commerce strategy, things just work the way they should. It can be daunting if cart abandonment rates are high, but it’s a myth that was never true for Geriatric.
“Just because something happened in 2017 doesn’t mean it will stay the same in the future. As directors of eCommerce or eCommerce managers, it’s our job and role to never be satisfied with what has happened in the past but to be constantly innovating, changing and creating new site features or new ways that customers can find and do the things they want so that 1% cart abandonment rate doesn’t turn into 10 or 20%. It’s important to give the areas that are doing well attention to make sure that they keep staying that way. I want to be the first person to ever say we have a 100% cart fulfillment rate, ” said Racine.