Monthly Archives: May 2011

May Blogger’s Digest

May 31, 2011 by Craig Vodnik.

Now that our B2B series has settled in, we are wrapping up the month of May. Is anyone else out there really looking forward to a long, hot summer like we are? Your comments and questions are welcome at the end of each blog post or posed directly to our team at any time.

Here’s our list of favorite recent posts covering different topics in the e-commerce space.  Let us if you see any great posts that we can consider for a future digest.

Econsultancy – Four Tips for Improving Website Personalization: How are you personalizing your website to give your customers something special when they visit?

Chaotic Flow – The New Breed of B2B Buyer: Do you know what the new breed of B2B buyer is looking for and how should you engage with them?

Practical eCommerce – 6 key ‘Terms and Conditions’ for Ecommerce Merchants: Are your Terms and Conditions correctly defining how your company operates and sells through e-commerce?

Internet Retailer – The Gathering Strength of Social Commerce: Are you prepared for an explosion in social commerce?  Be ready in case this article is true.

Don’t forget to visit our Facebook page and tell us what topics you would like us to cover in the future!  We’re going to spend some time on SaaS in upcoming posts so stay tuned.

Dealing With Summer Sales Slow Down

May 19, 2011 by Craig Vodnik.

As the weather warms up after a long winter, consumers are logging off their computers and taking off to beach vacations, backyard barbecues and hiking excursions. But your business can’t close for the summer — so how do you cope with the traditional slowdown in sales activity without pulling out your hair in frustration?  We have some ideas for you!

Summer Doldrums

Most companies experience a traditional decrease in sales during the summer months and are at a loss to explain what is happening.  Fear not — a seasonal decrease is normal in the digital e-commerce industry due to most of the northern hemisphere taking vacations throughout the summer. People just aren’t in their homes (and on their computers) as much.  If your annual sales charts resemble any of the following, you are experiencing the typical summer sales doldrum:

Typical Annual Sales Chart

Example 1: Annual Sales Cycle

Typical Annual Monthly Sales Chart

Example 2: Annual Sales Cycle

Obviously, the southern hemisphere is in their winter season when the northern hemisphere is in summer, so you can’t just shut down your e-commerce activities. So what can you do about this expected seasonal decline?

What to do during the off-season

First of all, think about how many people are not at their desks, are thinking about their vacations or have other expenses during the summer (as compared to the winter when many folks are bundled up inside for months).  Not only are consumers less available during the summer, but they are less willing to spend money on unnecessary items.  So sending an additional e-mail campaign to your existing customers isn’t really the right thing to do.  Nor is it advisable to keep dropping prices in “specials” in order to generate additional sales to maintain an artificial sales volume.  Accept that there is seasonality, and plan accordingly. Additional situations that affect sales are:

  • New product release – decline in sales activities before new product is released and substantial increase after new product is released
  • Price change – increase as price decreases, but could be temporary if product is nearing end of product life-cycle
  • Market changes – competitors appear with similar products, likely to result in lower sales

Knowing that there are many things that affect your sales, in addition to the season, plan ahead to take advantage of the season.  Some ideas include:

  • Use summer to work with beta testers – take this off time to dig deeper to find out what your customers want in your product.
  • Prepare for fall/winter product release cycles – develop additional features that were on hold while you focused on sales.
  • Grow relationships with your partners to remain on the minds of your customers – enhance your channel relationships to increase future sales.
  • Don’t discount your own product to generate business, unless it’s an end of product cycle – Your customers should already receive sufficient marketing e-mails from you.  Don’t pile more on top trying to chase a few additional dollars.  It could do more harm than good!
  • Target mobile devices for communications – If you are doing your normal e-mail marketing, try a different target device to see if that works.
  • Take a well-earned vacation too – If everyone else is doing it, why shouldn’t you recharge the batteries a bit?

Be confident

It takes a confident person to admit that there is seasonality and to believe that the sales will return without additional effort.  Look at your own sales figures on a monthly basis for each of the last few years to confirm this and then use the off-season to recharge your business for the coming return of your customers in autumn.

Keystone: Each summer you’ll experience a naturally occurring decline in sales.  Don’t waste energy trying to maintain sales levels from the spring.  Instead, plan for the following autumn and winter.

What are some of the tasks that you plan for and complete during the summer off-season?  Have you found any successful strategies for selling in summer?

Support Inside Sales With B2B E-store Key Account Functions

May 4, 2011 by Craig Vodnik.

This is the third in a three-part series explaining how companies selling software to businesses (B2B) should leverage their eStore infrastructure across multiple customer touch points.

In the first post in this series, we discussed the idea of allowing B2B customers to buy direct online, which B2B companies have been reluctant to do because of the high prices of their products.  The second blog post focused on leveraging an eStore’s functionality to enable resellers to buy on their own time and with customized discounts.  In this third post, we show you how an eStore, rather than competing with your inside sales team, can increase their efficiency and feed leads to your inside sales team.  Didn’t think that was possible?

Symantec Purchase Options

Symantec Purchase Options

If you followed the lead of our first blog post in this series, you would likely allow direct sales via your eStore.  However, there’s a certain point in your business, whether it’s two, 10 or 50 license volumes, when you want to build a relationship with the customer who is buying a quantity that large.  In the previous model where no direct online selling was possible, companies requested that every potential customer contact your company to make a purchase.

That was inefficient because even the person who knows exactly what they wanted and was ready to buy had to have a one-to-one conversation that could only occur when both sides were ready to make the transaction.  With direct online selling, customers can serve themselves, which could swing the balance the other direction so that you almost never interact with your potential customers.  Customers who buy in volume or repeatedly are your most valuable customers since the average revenue per customer is more than the value of one license.  Therefore, you probably want to interact with these customers and start building a relationship.

The way to segment one-time customers from the volume-buying customers is to offer instant purchase pricing on your website for some volume levels, but require that customers who want larger volumes contact your inside sales team for pricing.

NitroPDF Volume Licensing Option

NitroPDF Volume Licensing Option

NitroPDF, a maker of PDF reading and writing software, follows this model fairly closely on their website.  When you decide that you want to buy NitroPDF Professional product, an option is available for the “Volume Licensing Program” (shown at the right), which offers discounts for as few as 11 licenses.  Unfortunately, it’s not clear that volumes of 11 or more receive special treatment unless you click on the “Volume Licensing” button.

On the “Volume Licensing Program” page, potential customers are encouraged to “Request a Quote” or to contact NitroPDF immediately.  This drives inbound sales inquiries to the Nitro team to handle immediate orders and begin building long-term relationships.

Once a relationship has been built with a customer and there’s a chance that the customer will buy additional licenses in the future, the inside sales person can create a user account for that customer.  This user account, called a key account, allows the customer to return to the store in the future and buy at a discounted rate, much like the resellers we mentioned in the previous blog post.  Companies can configure special pricing, pre-approve purchase orders and credit inside sales for orders submitted through the key account process.  The key account feature also benefits customers:

  • Timeliness – Volume purchasers want to order on their schedule, not necessarily only when your office is open.
  • Experience – Most volume purchasers are knowledgeable and don’t need to speak with your channel manager each time before placing an order.
  • Payment methods – Traditional purchase orders, price quotes and VAT-waived processes are supported online.
  • Credit limits – Buying on pre-approved credit limits reduces order friction.

Similarly, companies receive benefits by creating these self-service accounts for their high-volume buyers.  The ability for an inside sales team to manage a larger pool of volume license buyers in bulk increases the efficiency of the team.  Tracking buyers so that the appropriate inside sales person receives credit is also important in this model.  Because there are additional costs for running transactions through your eStore, be sure to adjust commissions received for these transactions.

Taking a look at Computer Associates volume licensing options, their cutoff point for customers to buy direct online is 2,500 licenses.

Computer Associates Volume Pricing Model

Computer Associates Volume Pricing Model

The problem here is two-fold:

  1. How many small and medium sized businesses do you know that can afford up to $43,000 worth of software?  That’s how much 2,499 licenses at $17.60 each costs.  Wouldn’t it be better to draw the line lower and have people call in if their order is over $20,000?  Of course, each company should decide where the line to order online or call in is.
  2. There is no option for someone who wants to buy more than 2,500 licenses.  The e-mail address and/or phone number of the inside sales team should be available on this page.

Symantec does a decent job of identifying the options available and drawing the line at 1,000 units:

Symantec Volume Licensing

Symantec Volume Licensing

However, as you probably noticed, the total cost is $1.162 million.  Why even make that available online?  If I were Symantec, I would want to talk to any customer thinking about spending more than $100,000 to ensure that they are getting the right product.  Also, once the right product is found, how about setting up a key account for that customer?

There’s a common thread throughout this series on how the eStore helps B2B companies sell their products online: self-service.  Make your customers fell comfortable spending larger amounts online, then get out of their way and let them do it!  It benefits your business in two important ways:

  1. Allows sales to occur even when your sales organization isn’t available
  2. Increases efficiency by moving some of your sales to a no-touch model

I welcome your feedback on this series and would love to hear if I’ve missed anything in how your business leverages a B2B eStore.

KEYSTONE: Create an eStore account for your large-volume buyers to allow buying to occur even when your office is closed.