Learning the Basics of B2B Payments
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Some decision-makers regard ROI as the single most important factor in an ecommerce platform purchasing decision. For most B2B companies, determining ROI prior to making any significant changes is par for the course. So what happens when the true ROI of a decision is impossible to fully quantify?
This is a challenge many B2B merchants encounter when it comes to deciding whether or not to adopt a new B2B ecommerce platform. Sure, you could use a formula to calculate the ROI of ecommerce software, but chances are it won’t yield an accurate representation of your true return on investment. A standard ecommerce ROI calculation formula looks like this:
(New Site Revenue – Old Site Revenue) x 100 / Investment = ROI Percentage
While this formula and similar ecommerce ROI calculators can be great for getting a general idea of the revenue changes associated with your investment, they aren’t always able to encompass the full context surrounding those revenue figures. When applied to online B2B ecommerce stores, the figure this formula yields is narrow and potentially misleading.
For a more accurate and nuanced perspective on the potential ROI of a new ecommerce platform, you’ll need to consider the following:
An ecommerce platform that offers extensive automation has the potential to deliver massive returns in efficiency. Consider your current order processing, inventory management, shipping, and customer communication processes. Are these automated to the extent you desire? If not, you may be wasting time and money by keeping these processes manual. While misspent man-hours and sales lost due to inefficiencies are often hard to quantify for ROI calculations, they can have enormous impact on operating costs and revenue generation.
Online B2B merchants that own their market are unlikely to see their revenue increase upon implementing a new ecommerce platform. If your store is a market dominator, you will need to look beyond revenue figures to determine what your return on investment would be with a new ecommerce platform. Investigating the potential impact of new ecommerce software on long-term metrics like customer lifetime value (more on that below) will give you a much better idea of what your ROI will really look like.
If your current ecommerce site fails to capture and retain customer interest, those customers may start spending less or even looking elsewhere. Customers are more likely to return when they have an account on a site they find easy to navigate and understand. Improving customer return rates with an ecommerce site built to engage them means increasing customer lifetime value, a significant source of revenue. To learn more about how customer lifetime value can be increased with a customer-centric ecommerce site, check out the Miva Paper Store case study.
Are your sales and care teams tied up with busywork? How much of their day is actually spent in sales, retention, and support? If a new ecommerce platform frees up their time by automating sales and support processes, they can spend more of the day supporting customers, closing deals, and focusing on the initiatives that mean the most to your bottom line.
High bounce rates, low site traffic, and slow loading speeds can be symptomatic of an ecommerce platform failing to pull its weight. Visitors could be leaving because they can’t navigate your product catalog. Users might be clicking away because certain page elements are broken or fail to load. Using Google Analytics and other site performance analysis tools to check on individual page performance can offer actionable insight into your customers’ onsite experience. Use this data to determine the weaknesses you would like a new ecommerce platform to address.
Even small mistakes can make a big impact on your bottom line, especially when they occur on a regular basis. Without a comprehensive ecommerce platform managing error-prone processes like tax calculation, inventory updates, and shipping, B2B businesses are at risk of making costly and frequent errors.
While true ROI can be extremely difficult for B2B ecommerce sellers to nail down, the current ecommerce climate does not leave much time for leisurely decision-making. B2B merchants that drag their feet on a platform upgrade could find their online market locked down by a competitor who pulled the trigger on new ecommerce software much sooner. This is why it’s important for B2B merchants to take a holistic look at their business’ operations, customers, and long-term goals when considering a new ecommerce platform.
Interested in learning more about B2B ecommerce? Our guide to the future of B2B takes an in-depth look at the tools and strategies online wholesalers are using to get ahead of the curve.
Miva offers a flexible and adaptable ecommerce platform that evolves with businesses and allows them to drive sales, maximize average order value, cut overhead costs, and increase revenue. Miva has been helping businesses realize their ecommerce potential for over 20 years and empowering retail, wholesale, and direct-to-consumer sellers across all industries to transform their business through ecommerce.