KPIs (Key Performance Indicators) are crucial for measuring the progress and success of your online business. Think of metrics such as traffic volume, conversion rates, average order value and retention rates. Companies that sell to professional buyers online can benefit from B2B-specific metrics. Read on to discover six B2B e-commerce KPIs that can help you expertly manage your web store.
Why B2C KPIs Aren’t Enough
Many of our clients have an online sales portal for existing customers that isn’t open to the general public. For most of these companies, offering better customer service and increasing the efficiency of their sales are the main reasons to start selling online.
The relationship B2B companies have with their customers is quite different from most online retailers because it’s much more personal. Professional buyers place orders with the same supplier more frequently, and B2B order sizes are typically larger than those placed with B2C web stores. And compared to consumers, B2B buyers usually have less choice when it comes to suppliers.
With so many differences, it’s no wonder that consumer-focused e-commerce KPIs simply aren’t enough for B2B. If you’re looking to take your web store management to the next level, consider implementing these six B2B e-commerce KPIs for online sales.
KPI 1: Online Customer Retention Rate
This B2B online sales KPI lets you pinpoint ways you can improve their buying experience and drive repeat business.
Customer retention is obviously an important KPI for retail e-commerce. Why is this different for a wholesaler, distributor or manufacturer selling online? Most of our own clients tell us that their B2B e-commerce platform is an alternative to other sales channels, so they want to compare how customers shift between various channels on an individual level.
For example, if individual customers place orders online more frequently than before, this could indicate that your web store effectively fulfils their needs. But if customers shift back to offline ordering after initial use of your B2B e-commerce platform, this could mean that the web store is falling short and requires improvement.
KPI 2: Percentage of Returning Customer Visits
Repeat purchases are an important KPI for B2B sales. And the number of returning customers might be just as crucial. This B2B KPI indicates how well your sales portal is meeting needs beyond just placing orders.
The difference between selling to consumers and professional buyers is that in B2B, a visitor is always a customer – not just a random visitor looking at ten different web stores at the same time. If a customer keeps visiting your online portal it means that it serves a purpose for them.
The majority of our clients are highly satisfied with the way their Sana web store helps their customers find the information they are looking for, 24/7. And not just product details, but also information about the online and offline orders they placed before – even if they were placed years ago.
KPI 3: Customer Satisfaction
This sounds like a rather obvious one. However, the fact remains that adoption of online tools to measure customer satisfaction isn’t as widespread among wholesalers, manufacturers and distributors as it is among retailers. This makes measuring customer satisfaction a bigger challenge. But it also means these B2B companies can realize a quick win by implementing online tools that let them efficiently measure and report on customer satisfaction.
This isn’t the only way you can keep track of customer satisfaction. Because relationships with B2B buyers are generally more personal, you can conduct in-depth interviews to learn more about the why and how of the online shopping experience. Be sure to utilize that relationship as it has proven to be a valuable source of ideas for improving the overall value and success of a B2B e-commerce platform.
KPI 4: Online Order Frequency
“This KPI indicates to what extent an online sales portal is improving the efficiency of our customers’ sales organization.”
For many of our clients, B2B e-commerce is not so much about the percentage of online revenue, but rather about the number of orders placed online. Smaller orders placed offline are often more work than they are worth when you consider how time-intensive they are for your sales team.
These orders are an important part of your business. However, they only reflect a small part of your total company revenue while tying up a large chunk of your resources.
A B2B e-commerce platform frees up your sales team to handle the large orders that are typically placed through other offline channels. This lets you increase the number of orders you can process without increasing your staff.
To determine the profitability of adding an online sales channel, it’s critical to measure online order frequency and compare it to the total amount of orders.
KPI 5: Average Order Value
“This KPI allows our customers to determine whether their online sales portal is changing buying behavior.”
What makes this B2B online sales KPI different from the well-known B2C version?
B2B businesses not only have the ability to compare this KPI with other points in time, but also on an individual level and in comparison with offline orders placed by the same customer.
This KPI should indicate whether you are capitalizing on the cross-sell and upsell potential that an e-commerce platform has to offer. It will also let you know whether you are helping your customers find not just the products they’re looking for but the products they need.
KPI 6: Effect on Offline Sales
Another good B2B e-commerce KPI is orders placed outside office hours. This clearly indicates that you are fulfilling a need for your customers and builds your case for continuing to invest in your online business.
A more challenging metric is the average order value of customers who do online research before placing their orders offline. By comparing the average order value of these orders with the average order value of offline customers who don’t do online research, you can determine whether your B2B web store provides the right information about your assortment or specific products.
The Benefit of B2B-Specific KPIs
With these targeted B2B e-commerce KPIs for online sales, it should be easier to keep an eye on both the details and the bigger picture. Keeping track of B2B e-commerce-specific metrics not only lets you see the return on your investment, but it also helps you recognize trends. Trends that you can then capitalize on to get more customers ordering online, and with increased frequency.
Want to know more about B2B e-commerce? Download our ebook and find out why an online sales channel is the key to success for B2B companies!