With the end of 2016, many B2B companies are reviewing this year’s ecommerce performance and planning for next year.
All too frequently, B2B ecommerce development is short sighted. Companies frequently ask, “I have requirements to do X. What is the best solution?”
In fact, they may find the best solution for X, but six months or a year later, when there is a new set of requirements, that solution may not be the best fit. If you look past your current needs to your long-term strategy, you will make better decisions.
Quick Start: 1-hour Strategic Plan
Here is a quick exercise as a starting point for your strategic planning.
Set aside an hour to go to a coffee shop or elsewhere, where you can focus without interruptions. Bring paper, a pen, and a copy of your mission, vision, and company goals. If you have a defined brand and unique selling proposition, bring those as well.
First, review your company’s mission, vision, goals, brand, and unique selling proposition.
Answer these questions.
- How will my company use the web to gain a market advantage?
- What experience can we create online for our customers that Amazon cannot match?
- What tools can we offer that will make our customers’ lives easier?
- What website tools and features will be important to mobile users?
- What metrics will define success for our ecommerce site?
Ideally, you have a team that can consider and work through these questions together and work with the leadership of your company to gain approval. However, if your company is not contemplating these questions today, your time in asking them will help plan for growth.
Next Step: Prioritize
Once you have the answers to these questions, take time to reflect. Choose strategies that you believe will make the most impact. Many times these strategies are related to market opportunities, overall business priorities, or pain points.
If you aren’t sure which strategies will make the most impact, get feedback from others. Approach trusted partners and look at what others in your industry are doing.
Improving your website speed, mobile experience, and quality of search results are common priorities for serious players in the ecommerce space. Consider adding these to your plans, if they are not.
Building a Longer Term Outlook
With your priorities in hand, create a vision for what your ecommerce site will look like in three years.
- Will your current software platform enable you to meet these goals?
- What development will be required?
- What are the options for third-party add-ons to the software you have?
Typically there are multiple paths you could take. Potential software packages will likely offer different features and have different costs. One solution may cost less in the first year, but more over time.
Consider assembling a cost comparison that looks six years out. While technology is constantly changing, a comparison based on assumptions and current licensing can still be helpful.
One solution may cost less in the first year, but more over time.
For example, I recently developed a six-year cost comparison for a company that showed solution A had a lower first-year cost, but over six years solution B was roughly 30-percent less. Solution B has a more robust feature set, which means there will be less customizations required to achieve the company’s goals and, moreover, the development costs are lower — the architecture of solution B enables upgrades to cost less.
Licensing structures can vary. Some licenses cost the same each year. Others are higher up-front with a percentage in subsequent years. Others are based on revenue and will increase as your site succeeds. Consider how the license structure will affect the long-term costs.
Hosting, support, and maintenance costs are also a consideration and could be added into your comparison. If you are using a SaaS cart, you will benefit from no hosting costs, but, depending on the solution, you may experience trade-offs in other areas.
One Company’s Journey
A few years ago, I met with a company that had specific goals for a website redesign, to improve its ecommerce functions and its content. The website was a key part of the company’s overall business strategy. The staff knew this was the first of many phases and they wanted to take an incremental approach.
We offered two solutions. One met their immediate needs at a lower cost, and the other was initially more expensive but had a greater ability to scale. They decided to go with the lower cost alternative with the understanding that the company would likely outgrow it in a few years. The staff wanted to take it one step at a time.
Since then, they have approved additional projects and customizations on the lower cost version. With each new project, the cost to move to the higher-end option gets more expensive, as the move will involve recoding what they have already paid for. Some of the staff’s requests would be much easier to implement in the higher-end option. But the switching costs are high — versus staying on the current platform — even though the long-term costs are lower. Recently a company executive told me, “I wish we had gone with [the higher-end option] in the first place.”
The key is to make an informed choice. Many companies ignore their overall strategy and fail to plan for long-term costs. Map out your priorities and estimate your long-term costs. It will help create a more effective B2B ecommerce strategy.