Operational Inefficiency Turns Your B2B Business into a House of Cards
You know your sales team better than anyone. You know how talented they are. You know how knowledgeable they are about products that your B2B company offers. And you know that they have strong relationships with your customer base.
But just like any B2B sales leader in your shoes, you’re worried your sales team isn’t turning all that potential into profit.
And how could they? Each year, margins are being eaten away, your cost of sale is rising and your targets for growth have never been more competitive.
It stands to reason that the sales tactics you’ve used for a while now just aren’t doing the job like they used to. If your sales team isn’t equipped with tools, programs and frameworks that can help them win more deals, then the foundation of your B2B business could crumble from beneath you.
It’s time to understand this problem you’re facing: How can you get more out of your sales teams in the face of increasing pressure?
Here are the two most common hurdles holding you and your sales team back:
- Your sales team does not yet have a B2B e-commerce solution to ease the labor burden of your employees and automate processes.
- For suppliers who already use a mainstream B2B e-commerce solution, they often find the solution isn’t pulling its weight.
No matter the cause, both of these scenarios create a drag in efficiency and threatens the strategic vision of your organization.
The only solution to this is empowerment. Empowering and enabling your sales team to reach their growth targets through aligned solutions, such as ERP-integrated B2B e-commerce, that help boost your team’s success and doesn’t hold them back. Once you free your sales team up, they will achieve more and strategically use their skills to boost the bottom line.
This guide will show you what’s been holding your sales teams back, what the impact of these issues are, and how you can create a structure of enablement to drive revenue and achieve B2B commercial success.
The Prison of Inefficiency: Why Your Win Rates are Stagnating
You’re looking for opportunities wherever you can find them to win deals and make sales that add to the bottom line of your B2B business. Members of your sales team are undoubtedly doing the same. So why does it seem like these growth opportunities keep slipping through your fingers? Here are a few of the main reasons you may be seeing a dip in productivity in your team:
Overreliance on manual labor
B2B businesses are slightly more insulated from market forces when compared to B2C businesses. Combine this with most B2B business’ focus on building customer trust, you tend to find that many B2B businesses are behind when it comes to implementing automation tools. B2B buying involves a high level of complexity and customer-specific agreements during the order process. Automation becomes much more difficult due to these factors.
This means that most of the sales functions of more traditional B2B businesses take place over the phone or via email, leading to a lot of administrative work for sales teams to do on top of their regular job functions.
Average offline sales touches necessary to complete a B2B order:
- B2B supplier vetting: The customer is determining whether their business needs and your offering align.
- Product information/order quote: The customer asks questions about product specifications and requests a quote from you.
- Quote follow-up: A salesperson on your team contacts the customer to inform them of what the quoted price will be for their order.
- Order confirmation: The customer submits the order to your team member. The order then needs to be processed in the ERP.
- Delivery update: The customer requests an update on when they can expect to receive their order.
- Customer feedback: You contact the customer to determine their satisfaction with the products and service.
But when you leave this valuable inventory tracking and order entry to salespeople, human error will undoubtedly occur at some point. Each of the sales touches listed above creates an opportunity for error. Any error in your transaction data can create a pile-on of order errors, support tickets, troubleshooting and extra work for your team.
Your sales team’s skills and talents are demanded elsewhere. They shouldn’t be devoting significant time or talent to tedious order entry. This is a prime example of a process that could be automated to improve efficiency.
Missing out on more impactful opportunities
If your sales teams are distracted by tedious and rote processes, what exactly are they missing out on? They miss out on closing more impactful sales.
Every B2B business has customers that require more guidance for what they need and what items they should purchase together. This is where consultative selling comes into play. Consultative selling can help your customers be more successful and inspire advocacy amongst those customers for your business. In addition to this, your sales team can focus on high-value sales, such as customers who place larger value orders that require more white glove service.
These are the types of scenarios that your sales team loves and where they perform at their best. If you aren’t using customer data to focus on these types of customers, then you are missing out on valuable revenue that keeps your margins steady and adds to the bottom line.
Adding Fuel to the Fire: Why Mainstream E-commerce Causes More Issues with Efficiency
Efficiency problems aren’t just plaguing offline B2B companies. In fact, they are often prevalent amongst B2B companies who have implemented an e-commerce solution that just isn’t up to scratch. This can be extremely frustrating as you could be thinking that you’ve solved the issues with inefficiency, when the solution you chose could be making the problem worse. These underperforming e-commerce solutions are often referred to as mainstream e-commerce.
Here are the top three reasons why mainstream e-commerce is hindering your sales teams, instead of enabling them:
1. Data discrepancies that cause expensive order errors
Mainstream B2B e-commerce automates many tedious administrative processes, but it often does so in a highly unstable way. Because these solutions do not integrate directly with your business’ ERP, there are often multiple sets of product, inventory and customer data; one set in the ERP, and the other in the mainstream web store.
Have you already spotted the problem? More than one set of data is a recipe for disaster. Particularly because the data in your ERP is enormous and complex. It would be nearly impossible to duplicate it 1:1 without errors. You’re setting yourself up for more work to maintain the data and this often causes order errors that demand even more labor to fix.
If you think about it in the context of material loss, these types of errors can end up draining the billable hours of your sales team, meaning the cost-of-sale expands far beyond what is expected and necessary.
Instead of solving the problems of your sales team through automation, the mainstream e-commerce solution has created more work and inefficiency.
2. Shoring up customer trust is an inefficient use of sales labor
If your mainstream B2B e-commerce solution is indeed causing order errors and increases in support tickets, then you probably have some pretty frustrated customers on your hands.
If your customers start losing faith in your web store, this can set into motion a vicious cycle that continually undermines the ROI of such an e-commerce solution. Customers become more likely to not adopt the web store, leading you back to a place where the majority of sales processes are once again happening manually. Customers would rather call or email to get answers to their questions and ensure that their orders go through.
Every sale intended for your web store that gets routed back to your sales team raises your cost of sale average and thins out your margins. Not to mention it endangers the valuable relationships you have with your customer base because sales teams must field negative feedback about the buying process.
3. Mainstream e-commerce limits customer outreach and growth
In an ever-tightening competitive landscape, customer outreach and demand generation are key components of your sales strategy. It may become necessary to scale quickly to meet the needs of customers in a different market.
However, mainstream e-commerce doesn’t have a connection to the internal business logic that lives in the ERP that would make such a pivot possible. The administrative work we alluded to earlier? Multiply that by 10 when it comes to manually setting up the logic within your mainstream web store for an expanded customer base.
As you roll out this new process, your sales teams will be sidelined to check whether things are running smoothly. First, they will have to check inventory data before the order gets sent to the warehouse for picking. Then, they have to check shipping options. Finally, they must ensure the order gets there on time. Your customer relationships are riding on this going smoothly.
If you can’t move fast to capture the opportunities you see on the horizon, it puts a cap on the ability of your sales teams to sustain growth.
Inefficiency by Numbers: How Metrics are Affected by Stunted Commercial Processes
Here are the Key Performance Indicators you need to keep an eye on:
Inefficiency is a deceptive thief. It takes from your organization’s bottom line in ways that may be hard to notice at first. However, the longer your sales teams go without an enablement structure, the more likely you are to see the following issues:
Higher cost-of-sale (COGS)
You have probably heard the phrase, “you have to spend money to make money” — and this is true. But how much money do you have to spend? This is the question many B2B sales leaders are preoccupied with.
Of course, there are ways that you can make changes to the equation in terms of which vendors B2B businesses choose. The cost of supply and raw materials can be reduced, but these are largely factors that are outside of your control.
What you need to focus on is the cost of labor variable in the COGS equation. If you don’t eliminate manual processes for your sales team, your cost-of-sale will stay high.
Thinner gross profit margins
Another sneaky aspect of how inefficiency eats at your bottom line is in your gross profit margin. In an ideal world, you would like to always see a sizeable revenue buffer. After you subtract the sum of your COGS, you are left with your profit margin.
As targets get more competitive, keeping your profit margin healthy becomes more difficult. Once again, this is where reducing the cost of labor is a key strategy to keep your profit margin growing so that you can hit your growth targets.
It’s important to reiterate that reducing cost of labor is not code for thinning out your team or making your sales team redundant. This is about automating a select set of processes so that your sales team can be set free to focus on high value sales.
Higher rates of employee turnover
As millennials and Gen Z employees move up in the workplace, it is necessary to take their preferences into account. Most workers of these generations are looking for more impact in their roles, and their performance soars when placed in an empowering environment.
It makes sense that you free your sales teams from tedious tasks such as answering questions from customers because they can’t find the correct product information or taking a routine repeat order that could be automated.
Not only does it reduce your cost-of-sale and keep your profit margins healthy, but it has the extra benefit of giving your sales team the enablement they need to get their jobs done. Once they feel supported in their role, job satisfaction will rise, and turnover will drop.
QUIZ: How efficient is your current B2B sales operation?
Use this quiz to see how you compare to peers on the issue of B2B e-commerce efficiency.
Empowering your Sales Teams to Reach Full Capacity with ERP-integrated E-Commerce
What your sales teams need to maximize their potential is a powerful sales assistant that automates tedious processes and empowers them to do more.
ERP-integrated e-commerce is a solution that fits like a puzzle piece into your sales strategy. It allows B2B businesses to get more from their sales teams so they can reach their targets.
So, what is ERP-integrated e-commerce?
Your ERP is the heart of your B2B business. It contains all the inventory, customer and product information your business needs to run smoothly.
With ERP-integrated e-commerce, you benefit from a single, unified hub that eliminates system silos and provides your online buyers with accurate and reliable data, 24/7.
All those tedious processes can be effectively managed by this B2B e-commerce solution as it becomes the perfect partner for your already strong sales squad.
Here are a few examples of processes that an ERP-integrated B2B web store can automate for you and your team:
- Repeat orders: Order history is available in real-time for every customer (along with special pricing logic for each of them), allowing them to place and schedule repeat orders with ease.
- Answering product questions: The web store displays all the product information available in the ERP as well as accurate inventory tracking, so customers can effectively self-service.
- Order-to-quote functionality: Your sales team will no longer be distracted by calculations and haggling over pricing when an effective quote generator is included in the B2B web store.
How ERP Integration Helps Your Team Become a Machine for Sales Efficiency
The topic of making your B2B sales team more effective is an issue that has many different angles. We’ve discussed how it can stem from a lack of effective tooling to tooling that doesn’t pull its weight when it comes to upskilling your team. But how can ERP integration answer each of these challenges and get your team to a place where exceeding targets is attainable and sustainable?
ERP integration sets your sales team free to do what matters most
As discussed above, traditional sales structures deliberately cause a resource crunch on your sales team. When you combine this with the knowledge that most B2B customers are millennials who have come to expect online buying, it is clear that B2B e-commerce is a necessity.
But not all B2B e-commerce solutions are created equally and there is a reason why ERP integration provides support and empowerment for sales teams that mainstream solutions don’t. It’s great to talk about reducing phone calls and manually-input repeat orders, but that can only be possible if the web store works efficiently, runs reliably with little maintenance and has the features which inspire customers to adopt it.
Once your sales team can reliably move away from time-consuming administrative work, a new realm of possibility opens where they can use customer data to craft more targeted pitches to the right customers. They can put their full focus toward assisting higher-value customers with making complex purchases, therefore lowering the average cost-of-sale and boosting the gross margin.
You can always rely on your B2B web store data to be accurate
There’s a reason why setting up a web store is a lot more complex for B2B businesses than it is for B2C businesses. If done incorrectly or without the right priorities decided upon, then your business could suffer more than it benefits from such a solution.
When you choose ERP-integrated e-commerce, you are taking a step toward a future without order errors caused by a mainstream web store. The integration takes place natively within the ERP and all business-critical data is synced in real time with your web store. This leaves no space for errors to take place. The data in the ERP is always correct and it is always aligned with your web store.
When your sales team is no longer redirected to fixing orders and following up on data discrepancies, they are freed from a part of their job which is often unfulfilling and unrewarding. As their trust in the ERP-integrated solution grows, so does their confidence and ability to close a high-value sale. They can make informed and inspired pitches to these high-value customers that increase the likelihood for secured cross-sell and upsell.
Customer trust is never in question due to proven accuracy and reliability
An ill-aligned e-commerce solution should never be thought of as a quick fix that you can quickly slap a bandage over and troubleshoot once you have more time. Spoiler alert: that mythical “free time” will never come to pass if you are using mainstream e-commerce.
ERP integration gives you that free time because the real-time syncing of information between the web store and the ERP means that there is no opportunity for errors to occur. It guarantees accuracy at all moments throughout the buying process with little maintenance. Your customer’s buying journey will be smooth, fast and effective. They can rest assured that the product they ordered will be in stock and delivered according to their specifications, all while enjoying the personalized account service in the web store that includes their customer-specific pricing and recommends value-added products for their order.
For true sales empowerment to take place, your customers need to rely on your web store consistently. That’s what sets ERP integration apart. It is consistently accurate and consistently reliable. This means your sales team will be consistently transcending menial administrative work and accomplishing more.
Your teams can reach new heights when mainstream e-commerce isn’t tying them down
A sales team without ceilings for their productivity and ambition is the only type of sales team that will be able to reach their targets time and time again. A mainstream e-commerce solution can create invisible boundaries for your team.
Take for example the ability to scale your operation. To exceed growth targets, you may have to offer a more diverse set of products or target a new base of customers. If you had to take time to build that strategy out by coding it into the web store manually, you wouldn’t be using your pool of resources very effectively.
ERP integration solves this problem because scaling happens in the ERP and is automatically updated in the web store. This means that all the logic you need to expand to a new market will be placed in the ERP. Now, your sales team has the tools at their disposal as soon as they are needed to conquer this new opportunity
Helping Your Team Exceed Targets Puts B2B Sales in Overdrive
Nobody in the world of B2B business would choose to hold their team back deliberately. Most business leaders are trying to do everything they can to make sure their teams have the tools they need to succeed. What we have learned is that improving sales efficiency and achieving operational excellence is a result of small and large decisions that have trickle-down effects on your business.
Making the choice to implement an e-commerce solution to help automate small tasks is only a quarter of the battle. The larger part of the battle is about making the right choice of e-commerce solution so your teams can be sustainably empowered for the months and years to come.
That’s what sets ERP integration apart from the mainstream solutions:
- It reliably services B2B customers in a way that keeps them ordering through your web store.
- It conveniently updates all important transaction data in real time so customers can achieve seamless self-service.
- It allows your sales team to evolve tactics to become more data-centric and targeted when it comes to upsell and cross-sell opportunities.
ERP integration offers you and your sales teams more. So, it’s not a black-and-white situation of having your team do more with less. It’s about getting your sales team to achieve more through more thoughtful, dedicated support and empowerment.