The majority of manufacturing innovation today takes place at the product level and on the factory floor, not the sales side. In fact, eight out of 10 manufacturers still depend primarily on their internal sales force, and less than one out of five offer a digital buying experience. This number is surprising, especially since today’s buyers prefer to source, vet and shop from suppliers who are online.
For manufacturers, making the conversion to e-commerce sales can be lucrative. According to research firm Digital Commerce 360, in 2019 U.S manufacturers’ B2B ecommerce sales grew nearly 21%, to $430 billion. That growth rate is almost 20 times faster than the growth in total U.S. manufacturing sales. Add to this the fact that buyers are purchasing both small and large products online. Another study by McKinsey & Company reported that 70% of B2B decision-makers say they are open to making new, fully self-serve or remote purchases in excess of $50,000; and 27% would spend more than $500,000.
With these kinds of statistics, it pays to start now. Here are five steps to a successful e-commerce strategy.
1. Be a leader
Your e-commerce strategy should be defined and embraced at the most senior level of your organization. E-commerce touches every part of your manufacturing operation, from the initial order to the final delivery. If done correctly, it can be a game-changer—especially if you are like so many manufacturers—drowning in wasteful manual processes. Your customers will love you for giving them the option to self-serve. Part of being a leader is taking the time to get educated and understand the unit economics and force multipliers that e-commerce will bring to your business.
2. Build the right team and plan for change management
Change is hard. Any company who undergoes a significant digital change should include change management in their process. According to McKinsey and Company, 70% of projects fail as a result of limited or no change management. In manufacturing, the stakes are even higher. Management should take the time to select and train the right team players – including those already on board and new hires from outside. Critical to a company’s success is having a team that shows real interest in addressing system changes and is equipped to challenge those manual processes inherent in every system. Some existing employees may feel defensive – especially those who’ve been in place over the years and know the processes well. By tapping into the enthusiasm of those wanting the change and showing those with the depth of knowledge of company processes that they are valued, you can begin to create a collaborative team to increase adoption of the project.
You may also be surprised at the level of fear your sales and operations team will respond to with this change. The fear of change is natural and can be allayed through open communication and showing the employees how the technology will make their jobs easier, not replace their positions. Either way, you need to make sure your entire team is on board. Outside specialists who understand the unique structure of manufacturers can fill in the gaps with expertise on fulfillment, customer experience, and the generation of high-quality traffic to your store.
3. Start small and grow
Start with parts and accessories that take a lot of your salesperson’s time and turn them into a self-serve e-commerce experience for your customers. You can expand to popular SKUs and more complex configurable products later. This serves 3 critical purposes: 1) it frees your sales team up from low-value, high touch orders so they can focus on higher-value accounts; 2) it shows your sales team that e-commerce can augment them - not compete with them; and 3) it demonstrates to your customers that you value their time—allowing them to place an order 24/7 without needing to talk to a salesperson.
4. Sell your story and your unique value proposition
Potential customers want to know why they should buy from you. There are many manufacturing websites with minimal personality, not to mention confusing value propositions. On average, buyers will read about 20% of the content on your web page. Based on this, I recommend you focus on three areas:
Compelling content: Too many words can overwhelm a potential customer and lead them back to your biggest competitor – the back buttonPowerful product images: These should be displayed along with detailed specs, and/or a configurator to allow buyers to create what they needVideos that showcase your products in use: If you really feel like lengthy explanations will help your product sell, put the text in a FAQ or blog section.5. Make it easy for your customers to buy
Take the time upfront to map out your customer’s buying process—include every step—even if you are selling a complex and/or configurable product. Your new digital experience should replicate the journey while minimizing the number of hurdles it takes for a customer to place an order. As you build your website, you want to think about the information you need to capture from the buyer, and how that should be displayed to your team. This is a good area to integrate with other software, such as your CRM, to better manage your customer’s expectations.
Think about all the areas that an e-commerce channel needs to collaborate with, including billing, production, engineering, customer service, sales, and marketing. Make sure that you are providing the relevant information to each area. This is especially true if you require an online configurator with real-time pricing.
Dusty Dean is a former manufacturing executive and co-founder of BITCADET.
