I am often asked by distributors if they should charge a setup fee for creating a customer catalog on Four51. My standard sales answer is almost always “that depends”…
Sales Series: What is the real value of online ordering?
Want to increase your margins? Want to leverage technology to increase your order volume without increasing staff? Want to sell more products to existing customers? Want to have your customers stay with you forever? (I know you need to fire customers occasionally, but most of them you want to keep around!) Get all of your customers ordering online now!
In a recent post, Four51 CEO Mark Johnson discussed the question of charging your customers for costs associated with creating a catalog to enable online ordering. In the end, I think it is best to provide the technology solution with no additional financial barrier to getting online. One of the main reasons not to charge a setup fee is that once you get them online, customers have a difficult time switching vendors. Another less obvious reason is that the customer becomes much less price-sensitive and you can actually get them to pay more for product when they order online than when they don’t. I have personally experienced this phenomenon on several occasions.
I recently signed a customer under very interesting circumstances. Having heard the question that is the title of this post numerous times, I think the following story might be helpful to a lot of you out there who feel the frustrations of competing with large corporations.
I was talking with a small distributor who competes with one of our newest, largest customers. The first thing the distributor mentioned when we got on the call was the press release regarding our recent deal with this big customer. Naturally, I was expecting the worst (because I hear it a lot): “How am I going to differentiate myself with your solution when it is available now from one of my biggest competitors?”
In my opinion, franchises are the ideal fit for the Four51 application and our data can back that up. Currently, more than 30% of the Top 200 Franchises (based on worldwide sales) are buying online through the Four51 platform. This includes everything from restaurant chains to convenience printers to upscale coffee shops. Therefore, they’re concerned about brand continuity, order cycle times and spend management.Four51 addresses all of these issues. However, when selling your capabilities, do you start with the franchisee or the franchisor?
As I talk with prospects and current customers, every now and then I end up in a conversation with someone who sees the value of Four51, but is having trouble getting their customer to change their current order process and actually use the site.
Humans are creatures of habit and, as a result, they tend to be resistant to change. What drives us to change a behavior, typically, is the promise of a benefit we will receive by doing things differently than what we’re used to. So, if your customer is used to ordering products from you a certain way, they’re probably going to be hesitant to start using the site you have set up for them unless you give them a reason to change their ways.
There are a couple things you can do to make the transition easy (and more appealing) to your customer.
The first thing you should do is set up a very basic storefront with a few of their products and that mimics the workflow that they would go through to place an order. Remember, you are going to want to make this as simple as possible so they feel comfortable using the site. Typically, after using the site a few times, they will realize the benefits and see how convenient it is to place their orders online.
Another thing you may want to consider is providing some sort of incentive or reward to get customers using the site. It could be a bonus dollars program or you could offer a discount of products ordered online for a limited time. It doesn’t have to be huge, but something that helps push customers towards using the site will go a long way in helping them re-define their behaviors.
Whatever your idea is, remember to start out with a simple site, and if customers are hesitant to visit it, provide some motivation to push them towards it. Once they use it a few times, they should begin to see the advantages. (And it wouldn’t hurt to send them a follow-up report with their first quarter’s cost savings, too…just to seal those new behaviors you worked so hard to create!)
One of my favorite times of year is right around the corner: football season.
Every year, the so-called “experts” begin to incorrectly pick who will win the Super Bowl and some off the field issue is blown out of proportion and is beaten to death by the media (see: Brett Favre) because there aren’t any games to write about yet. It’s also the time of year I try to figure out how early or late in the season the Vikings will break my heart and leave me waiting for next football season. (I’m predicting an early January letdown.)
Anyway, as I look at successful teams across the NFL and try to figure out the parallels between them, one major characteristic stands out. With few exceptions, the team that wins the Super Bowl typically has a great defense. We definitely saw a great example of a team with a great defense as the Giants upset the Patriots in the Super Bowl.
Now, when we look at why ‘defense wins championships’ (as the old saying goes), there are two main reasons that come to mind. The obvious one, of course, is that if the other team can’t score, they can’t win; everybody knows that. But what isn’t as apparent is that the better your defense is, the more opportunities (possessions) it gives your offense to score, and the more opportunities the offense has, no matter how bad or how good they are, they’ll eventually put some points on the board. That’s why we see teams winning with mediocre offenses; the defense keeps feeding them the ball and eventually they capitalize on a scoring opportunity.
After that long winded example, the point I’m getting to is that using Four51 effectively is like having a great defensive football team; it levels the playing field. Whether you’re a large company or a small two person shop, effectively using Four51 not only makes serving your current customers more efficient, it can create more opportunities for new clients or additional services for your current ones because of your web presence and capabilities. It allows you to compete on the same playing field whether your other abilities (talented players in NFL speak) are the same as your competitors or not.
So, during this training camp, fine tune your Four51 skills so you’re ready to compete when the season starts.
To me, the word data evokes images of horror and pain, as if I’m being suffocated by endless rows and columns of ubiquitous Excel spreadsheets. Wow, scary…deep breath. To other masochistic souls, data is sheer bliss. Thankfully, here at Four51, we have some of these data freaks whose entire job it is to sort and sift through the seemingly endless information produced by the application.
The key with data is to make it relevant to you. Did you know that we processed nearly 1 million orders in 2007? Or that there are over 20,000 companies buying online through Four51 today? Yep, that’s right, the data says so. What else would you like to know? What do you need to get the “oohs” and “ahhs” from your customers and prospects? We constantly strive to provide you with the tools you need to more effectively present your e-commerce capabilities, but we need your feedback to do so! Chances are we have the information you need to help you seal the deal!
I was on a sales call with one of our customers the other day and they made a statement that I thought was a little bold…they told their prospect that if he started doing business with them and used Four51 to place their orders, our customer would save them 30% on the operational overhead associated with processing, tracking and reporting on those orders.
We then discussed two of the many items that the customer orders: business cards and product flyers that they produce for their retail customers. The business cards are still ordered by an administrative assistant who fills out a form and faxes in the order.
You’ve heard this process before: The proof is produced and faxed back for approval, changes are made, the proof is faxed back and the order is finally produced. Tracking consists of calling the supplier to see where the order is. If you can believe it, the flyer process is even more inefficient. Every time there is a new price or product feature added to the product flyer, they order flyers from their supplier who sends them to the home office. The home office employees then split up the order by sales rep and the sales reps drive the flyers to their retail customers and drops them off. This particular customer has a half a dozen sales reps that service several dozen retail locations. (Just think of what you could save this customer in terms of gas alone!)
At first I was nervous, but at this point I found myself that 30% may be a little conservative!
What a powerful selling message. Can you demonstrate to your customers how they can save 30% by ordering online? Is 30% a good number?
During a recent discussion on effective strategies for selling Four51, a customer remarked, “Hearing all of your stories and learning from past success is great, but what are the things I SHOULDN’T do?” This struck me as an odd thing to blurt out, yet extremely insightful at the same time.
What techniques have you learned to avoid during the e-commerce sales process? When going up against a competitor with similar capabilities, what didn’t work? Success is a blessing, but the ability to learn from past mistakes or missteps is a skill.