When your C-suite asks, “What’s your eCommerce ROI?” what is your reply? For many practitioners of B2B eCommerce, it’s a complex question. We recommend reviewing ROI through the three lenses of increased revenue, decreased expenses, and the entire cost/value of customer ownership.
Often clients tell us they only measure their sales impact in the eCommerce channel, and candidly, that short shrifts your entire Enterprise investments. When an end-user customer pre-shops on your website, calls customer service about product details and then buys with your sales representative, are you giving any credit (or attribution) to your website? You should. It’s the 24x7 face of your company for sales and operations. And it can be measured.
The combination of offline and online revenue (where eCommerce makes “an assist”) is a better way of looking at ROI, states Ian Heller of the Distribution Strategy Group. According to Heller, “Revenue should be viewed from eCommerce sales, all digital channel profits, and orders generated by the website but placed in other channels.” He states that this gives a better overall picture of contributors to sales.
But equally important, are you looking at the total number of orders, the number of new customers, your total number of customers, and how long you’ve retained them? This sets context for those sales numbers and how eCommerce is helping your overall business.
If you are saving money from channel shift, make sure you take credit. For example, if customers are self-serving and that decreases your operational costs, it’s important to note it. Your team increasingly connects with customers electronically (e.g., through email and EDI.) Those digital cost savings add up.
While there may be a commensurate upspend in IT, our experience shows that the benefits often outweigh the costs, and the overall cost to serve your customer decreases.
Additionally, has your team calculated any of the opportunity costs of not being able to maintain business with your B2B customers? Xngage archives are full of stories about clients who jumped into the digital commerce space when they were at risk of losing business. Quantifying and sharing those opportunity costs is critical.
The Full Cost/Value of Customer Ownership
When any senior leadership team asks about digital commerce ROI, they’re asking if either your channel, your digital transformation, or both, is important enough to fund into the future. Take the long view. When automobiles began to replace the horse and carriage, and when cell phones began to replace camera and film, customers voted for convenience and technology-enhanced solutions. Today’s B2B buyers are no different.
When reviewing the cost and value of customer ownership, consider these scenarios:
Will tech-enabled solutions continue to be demanded by your customers?
Will trends, like Artificial Intelligence or the Internet of Things, grow in your market?
Are your best salespeople using digital tools (plus their business acumen) to close opportunities?
If you answered yes to any of these questions, you probably know that digital investments help to future proof customer expectations. The full cost of customer ownership is delivering goods and services with greater precision to meet their needs, and the opportunity cost of not. The full value of customer ownership is increasing lifetime value, or moving that occasional buyer up to a loyal buyer, and hopefully, up to a best customer. In today/tomorrow’s world, that is an omnichannel customer who wants digitally enabled, time-saving experiences.
Dollars and cents. Dollars and sense. If your business case shows digitally driven revenue across the entire Enterprise, and multi-department cost savings from electronic engagement, you will likely see an ROI that benefits your B2B Enterprise. Want more information on organizing a detailed business case? Contact us here.