Many CEOs regard ROI as the most important factor in choosing a B2B commerce platform. Most B2B businesses determine the ROI first, before making an important change. So, what happens if it is impossible to entirely quantify the true ROI of a decision?
This is a challenge that many B2B sellers encounter when it comes to making a decision, or if they do not know whether to take on a new B2B e-commerce platform. Of course, you can use a formula to calculate the ROI of the e-commerce software, but the chances are that it won’t be an accurate depiction of the return on your investment. A standard e-commerce ROI calculation reads as follows:
(New Site Income – Old Site Income) x 100 / Investment = ROI Percentage
This formula can be a great way to obtain a general idea of the differences in income that are associated with your investments, but they often don’t take into account the entire context surrounding the investment models. If you apply this formula to online B2B e-commerce shops, it is too simple and can be misleading.
For a more accurate and nuanced perspective of the possible ROI of a B2B e-commerce platform, you need to figure out the following:
An e-commerce platform, which offers extensive automation, has the potential to generate solid income and return. Think about your existing order process: inventory management, shipping and communication with your customers. Are these processes automated in any way? No? Then you are probably wasting time and money on these manual processes.
Although the man-hours and loss of turnover resulting from inefficiencies are often difficult to quantify for the purpose of ROI calculations, they can have an enormous impact on operating expenses and on the generation of income.
Online B2B sellers that are market leaders, probably will not see any increase in turnover if they implement a new e-commerce platform. Does your shop dominate the market? Then you need to look beyond the turnover figures to determine what your return will be if you invest in a new e-commerce platform.
Investigate the possible impact of the new e-commerce software on the long-term figures, such as customer lifetime value (see below) which gives a much better idea of what your ROI will really look like.
If your existing e-commerce site doesn’t succeed in establishing and retaining the interests of your customers, then it is possible that those customers will spend less or even start looking elsewhere. Customers are more likely to keep coming back if they have an account on a site that they find easy to navigate and to understand.
Improving the custom return rate with an e-commerce site that is built to retain their loyalty, means increasing the lifelong customer value, an important source of income.
Are your sales and service teams under pressure? How much of their day is actually spent on sales, retention, and support? If a new e-commerce platform frees up their time by automating sales and supporting processes, then they can spend more time each day on supporting customers, closing deals, and concentrating on the matters that are most important for you.
High bounce percentages, low site traffic, and low loading speeds may be symptoms of a bad e-commerce platform. Visitors may leave because they can’t navigate through your product catalog. Users may click away because certain page elements are faulty or do not load.
The use of Google Analytics and other support programs offering site performance analysis for checking the performance of individual pages can provide useful insights into your customers’ onsite experience. Use this data to identify the weak points, so that you can tackle them with your new e-commerce platform. (See also our article with tips for your B2B webshop)
Even small faults can have a large impact on your business results, above all if they occur frequently. Without a comprehensive e-commerce platform that manages error-sensitive processes, such as VAT calculations, inventory updates, and shipping, B2B businesses run the risk of making frequent, expensive mistakes.
Although the true ROI can be extremely difficult for B2B e-commerce sellers, today’s e-commerce climate doesn’t allow much free time for decision-making. B2B sellers who are pondering a platform upgrade risk seeing their online market swallowed up by a competitor who has implemented new e-commerce software much earlier. That is why, when considering a new e-commerce platform, it is important for B2B sellers to take a holistic view of their business activities, customers, and long-term goals.