Manufacturers’ game plan: Crafting a strong business case for ecommerce

Kris Harrington

In today’s digital age, ecommerce has become an essential tool for businesses across industries. For original equipment manufacturers (OEMs) in the manufacturing sector, implementing ecommerce presents a multitude of benefits. This blog post aims to guide OEMs on how to write a persuasive business case for integrating ecommerce into their operations. Specifically, we will explore how digital self-service tools, such as ecommerce platforms, can significantly reduce administrative burdens and drive business growth.

Reducing Administrative Tasks:

One of the primary advantages of implementing ecommerce in a manufacturing business lies in the substantial reduction of administrative tasks for various teams. If you were to take a close look at the percentage of time your customer-facing teams are spending on administrative activities, you will likely find it is anywhere from 40% to 60% of their daily activity. Efficiency gains in administrative tasks translate into significant time and cost savings. Let’s examine the primary areas where these benefits manifest in an equipment and parts business:

1. Customer Service: By offering a digital self-service platform, OEMs empower dealers and customers to find product information, track orders, and access support resources independently. This streamlined approach reduces the volume of routine inquiries and frees up customer service teams to focus on more complex issues and proactive customer engagement.
2. Technical Service: ecommerce platforms can provide comprehensive product documentation, troubleshooting guides, and self-help resources. By enabling customers to resolve technical issues independently, OEMs can reduce the strain on their technical service teams, leading to improved response times for critical cases.
3. Sales Teams: With ecommerce, sales representatives can spend less time processing manual orders, answering calls or text messages for price and availability, or fielding questions regarding when an order will ship.  They will spend more time engaging in value-added activities like building customer relationships and driving revenue growth. Automated order management and self-service capabilities empower dealers and customers to place orders directly, reducing the administrative burden on sales teams.

Business Growth Opportunities:

While the administrative benefits of ecommerce are compelling, the true power of this digital transformation lies in its ability to drive business growth. Let’s explore how ecommerce can unlock growth opportunities for OEMs and aftermarket organizations businesses:

1. Product Recommendations and Upselling: Ecommerce platforms equipped with recommendations can help organizations analyze customer behavior, purchase history, and preferences to provide product suggestions (like kits and product upgrades). By leveraging upsell and cross-sell functionality, OEMs can increase average order value and revenue per customer. In traditional environments where call and email volumes are high, it is very challenging to be proactive in this manner for every opportunity and customer.
2. Serving Long Tail Customers: Long tail customers may have lower purchasing volumes individually but collectively represent a substantial market opportunity. Digital self-service tools enable manufacturers to efficiently reach and serve long-tail customers who may not warrant extensive personal attention from sales teams. By offering a user-friendly ecommerce platform, OEMs can ensure these customers have access to product information, support resources, and a seamless purchasing experience from anywhere in the world. Most often, these customers are better serviced through ecommerce as getting to them can cost both time and money.
3. Optimized Pricing Strategies: Ecommerce platforms allow manufacturers to implement consistent pricing strategies, offering personalized discounts, tiered pricing, or promotional campaigns. These pricing capabilities, coupled with data-driven insights, enable businesses to maximize margins and increase revenue.
4. Improved Inventory Forecasting: By implementing ecommerce enabled with a good analytics engine, OEMs can analyze search trends to determine what customers are searching for but not ordering. If these orders are lost due to no product availability, planners can make adjustments to forecasted demand to ensure the right inventory is on the shelf. In the aftermarket, it is commonly known that inventory is often more important than price when equipment is urgently required to get back to work.
5. Faster order-to-cash process: By providing customers with a self-service online platform, manufacturers enable them to browse equipment and parts catalogs, place orders, and make payments seamlessly. This eliminates the need for manual order processing, reducing the potential for errors and delays. With automated order fulfillment and integrated payment systems, manufacturers can accelerate the order processing timeline, leading to quicker order confirmation, shipment, and invoicing. Ultimately, the faster order-to-cash cycle improves cash flow, enhances customer satisfaction through prompt order fulfillment, and drives overall operational efficiency.
6. Enhanced Customer Satisfaction and Loyalty: A well-designed ecommerce platform offers convenience, self-service capabilities, and a seamless purchasing experience, leading to increased customer satisfaction. Satisfied customers are more likely to become loyal, repeat buyers, fostering long-term relationships and generating sustainable revenue streams. For OEMs, a better aftermarket customer experience translates into purchasing your whole goods again in the future. The annuity from a great customer experience cannot be understated.

Building the Business Case:

When constructing a business case for implementing ecommerce in a manufacturing business, it is crucial to highlight the quantifiable benefits and tie them back to the organization’s strategic goals. Consider the following points:

1. Cost Savings: How much time is your customer service and sales team spending on administrative tasks today? Calculate the potential time and cost savings resulting from reduced administrative tasks across customer service, technical service, and sales teams. Emphasize the efficiency gains and the resulting resource reallocation.
2. Revenue Growth: Demonstrate the potential revenue growth opportunities by leveraging ecommerce, including increased average order value, expanded customer base, optimized pricing strategies, better inventory management, faster order-to-cash, and improved customer satisfaction leading to customer loyalty.
3. Competitive Advantage: Highlight how ecommerce can give your manufacturing business a competitive edge by meeting customer expectations for digital self-service, personalized experiences, and convenience. Discuss the potential risks of falling behind and potential loss of market share.
4. Long-Term Viability: Articulate how embracing ecommerce aligns with industry trends, evolving customer preferences, and the shift toward digital transformation. Illustrate the potential risks of not adopting ecommerce and the benefits of future-proofing your business.

In conclusion, implementing ecommerce into your customer support processes brings significant benefits, particularly in terms of reducing administrative tasks and driving business growth. By streamlining customer service, technical service, and sales team processes, OEMs can unlock efficiency gains and allocate resources strategically.

Additionally, leveraging ecommerce enables revenue growth through product recommendations, improved service to long tail customers, optimized pricing strategies, faster order-to-cash, improved inventory turns, and increased customer satisfaction and loyalty. By constructing a well-crafted business case that outlines these benefits, OEMs can secure the necessary investment for implementing ecommerce and position themselves for success in the digital era.

Kristina Harrington is the co-founder and CEO of GenAlpha Technologies, which provides digital commerce technology for manufacturers. Prior to GenAlpha, Kris worked for more than 10 years in leadership positions at two large multinational original equipment manufacturers, Bucyrus International and Caterpillar, supporting the mining industry. In her various positions, she worked with internal stakeholders, dealers, and customers to deliver business results both in aftermarket and equipment sales. She can be reached at kharrington@genalpha.com.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact contributing editor Paul Demery at paul@digitalcommerce360.com.

Follow us on LinkedIn and be the first to know when new Digital Commerce 360 B2B News content is published.