Increasing Revenue Via an SAP B2B Order Management Website

Written April 16th, 2010 by
Categories: CEO's Blog
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The economy must be turning around. Over the past couple of years most of our conversations were about  investing
in an SAP Integrated B2B Order Management website in order to save internal operating
costs
.  Now we’re starting to hear more companies talking about justifying their investments by having to demonstrate that they are capturing new business.  So that got me to thinking.  Can a B2B Order Management website really generate incremental revenues for a company?

My original thinking was NO because all we were doing was converting existing orders that our clients would have received via other channels (phone/fax/email) into web orders.  From that perspective, at the end of the day you wouldn’t see a net growth in revenue, just a redistribution of that revenue to a channel that your customers preferred exercising and was cheaper for you to operate.  Those were both good things, but you probably weren’t going to generate any incremental revenue.

My thinking is now evolving.  There are definitely several scenarios where you could expect your web channel to generate net new revenue to the company.  Here they are in no special order:

  1. Sell overstocked or discontinued product. – No sense writing off inventory if you don’t have to.  Update the pricing for the remaining inventory in SAP, produce a simple Flyer announcing the “Sale”, we’ll convert it to an online “digital print version” and let your website do the rest for you.  Of course you can always move products over to eBay :-).
  2. Sign up new customers.  The B2B business model presumes a predefined relationship with your customers…as opposed to the B2C model which accommodates one time purchases.  While new customers usually don’t “trip over” your B2B website, you can make it easier for them to sign up with you once they’re there.  Drive Medical provides registration forms on their public website.  That page generates 0.06% of all of the page hits for the entire website.  That means people who haven’t done business with Drive in the past are interested in doing business with them in the future.  That should generate new revenue.
  3. Reclaim lost customers. Time and time again we hear that a primary motivation to put up an SAP Integrated B2B Order Management Website is to keep up with the competition and the technological expectations of your customers.  Even if you think that you have the highest quality product, the best prices and plenty of inventory, if you aren’t easy to do business with…defined as accommodating the way your customer wants to interact with you…you will lose (or already have lost) them.  Win them back and generate new revenue!
  4. Cross-sell products/services.  Just like you get hit up to buy insurance for all of your high tech toys when you are at your favorite electronics store checkout counter, link new products and services to existing items in SAP and have them show up when your customer puts them in the cart.  That should increase your average order size!
  5. Offer shipping incentives.  We can keep track of how much your customers are putting into their shopping carts and remind them that if they “only ordered a little bit more”, they could receive free shipping.  Once again, average order sizes…and top line revenue…should increase for you.
  6. Rescue abandoned shopping carts.  We’ll immediately notify you every time one of your customers abandons a cart.  We’ll also tell you what was in the cart at that time.  Take the initiative to reach out to them and maybe you can find the product they were looking for in another warehouse, give them a discount, or offer them the same item in a different color?  That should add to your top line and take away from your competition’s bottom line :-)!
  7. Simplify returns.  This may be counter-intuitive, but it falls in the category of “people like doing business with companies that are easy to do business with”.  I’m on a first name basis with my UPS driver thanks to my wife’s orders with Zappos.  Read this post about how being return friendly can increase your revenues.  While we don’t yet support registering returns via our b2b2dot0 service, it is on our Roadmap and is a fairly straightforward process to implement.  As soon as someone raises their hand for it, we’ll do it.
  8. Change your distribution strategy.  Now that you have a web channel, maybe you can cut out some of the middlemen in your demand chain?  Assess what value they provide…carry inventory, marketing, financing, support/services etc…and see if you can retain some of the margin you gave them by going direct.  You may find that not only will you increase your bottom line, but that they weren’t doing as good a job marketing your products as you thought they were, and your top line will grow as well 🙂

There you go.  Eight ways off the top of my head to have your SAP Integrated B2B Order Management Website generate incremental revenues for your company.  Only you will be able to determine if any of these strategies, or others I haven’t thought of, are relevant for your company and what their contributions to increasing sales will be.

While I can’t guarantee what those numbers will be, I can guarantee two things:

  • that you will realize significant internal processing efficiencies
  • this will make you easier to do business with for a good portion of your customers

These two items used to be enough to justify your investment with us.  If you also need to generate new revenue from your B2B customers, pick a number from 1-8 :-).

Happy Selling!

Sam