Dec 18, 2023 • Podcast

Is e-commerce a friend or foe?

Paul gives you a few things to think about regarding your relationship with e-commerce. 

Show Notes

Is online ordering a threat to your livelihood? Then perhaps you’re just an order taker, not a value creator.

If an organization provides a digital platform for ordering, then the salesperson has no choice but to find new and unique ways to create value for their customers. 

View e-commerce as a sales assistant generating revenue 24/7/365.

When customers embrace an e-commerce platform, they buy more, and in different categories.

E-commerce cannot replace what you, the salesperson, bring to the table: problem-solving, knowledgeable expertise, relationship. That’s all you!

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Is e-commerce a friend or foe?

(Transcribed from podcast)

I was recently talking to the folks over at Industrial Distribution Magazine. I’ve been a longtime contributor there for several years, and the conversation focused on how e-commerce affected salespeople. And I wanted to share my thoughts and ideas because I know many salespeople out there view e-commerce as a threat. They view it as a competitor in some ways, and I think it’s important that we look past that and discuss how e-commerce impacts the overall experience, especially for salespeople that are in distribution. So we’re going to address that topic on today’s episode of The Q and A Sales Podcast. I’m going to give you a few things to think about as we discuss this topic.

Now, before we do that, one thing I would encourage you to do is pick up your copy of Value-Added Selling. In Value-Added Selling, I dedicate an entire chapter to what salespeople can do to create more value, even in a digital marketplace. It’s worth checking out. It’ll give you hope as well. I’m going to reference some of the data that we gathered for that chapter of the book.

So, first things first, let’s get back to this topic. One thing to consider, if you are a distributor-type salesperson or if your company has an online platform, it’s important to remember that when you place the order, when you transact the business, whatever it is, you are the most expensive way to process the order. Consider this. As the salesperson, you’re making anywhere from, who knows, I’ve heard everything from $50,000 – $60,000 per year up to several hundred thousand dollars per year. Every time you pick up that phone to place an order, to look through a catalog, to give product numbers, whatever it may be, you are the most expensive way to place an order. Not only from the cost of your salary and bonus and all that, but also think about it from the time wasted.

I’ve seen this with salespeople in the field before. When riding with salespeople in the field, I’ve seen them pull over in the middle of the day. And it takes sometimes 20, 30, 40 minutes to go through all of the orders they have built up. And so, it’s not just that you’re taking 30 minutes to complete these orders, that’s 30 minutes you can’t make an extra sales call. So the missed opportunity certainly comes into play as well. So consider that—for salespeople, for managers, owners listening to this, your salesperson is the most expensive way to place an order.

What I’ve seen though, with organizations who embrace e-commerce—offer their customers this platform—first of all, customers love it. They prefer to have this option. They may not always use it, but preferences have changed. We need to have that option available. For some salespeople, yes, you view it as a threat, and the reason why is because you are simply an order taker, not a value creator.

So here’s what will happen. For organizations that build an e-commerce platform or create a better digital experience for your customers, your salesperson is no longer able to take orders. Instead, they have to figure out ways to create value. Because salespeople, you are survivors. And so, if you take away one avenue where you create value, such as placing an order, you’re going to find a way to create more value. So, you view this e-commerce threat really as an opportunity. It’s an opportunity to free up your time to help you find new and unique ways to create more value for the customer.

For salespeople another thing to consider, with an e-commerce platform, you now have a sales assistant that works 24 hours a day, seven days a week. Now, this assistant isn’t going to call in sick. This assistant is not going to go on vacation. You have a new avenue to generate more revenue. It’s been shown that when customers embrace an e-commerce platform, they tend to not only buy more, but they tend to buy more in different categories. So, you have a wonderful opportunity to grow your business and expand that relationship.

So I did want to share a couple thoughts though, because with e-commerce, yes, you are helping the customer manage the transaction. They are now going to be utilizing the most cost-effective way for your company to process an order. And I know many of you are concerned that e-commerce may replace you as a salesperson. The reality is, you already are an irreplaceable part of the overall value-added solution.

Here’s why I say that. Our research shows that when customers are making a buying decision, they experience value from three dimensions. The first is through the product or service that you’re selling. Secondly, they experience value from your company. And finally, they experience value from you as the salesperson. And if you’re curious as to how much value you bring: the product brings 57%, the company that you work for brings 18%, and you as the salesperson, bring a full 25% of the value—a full 25%.

So let’s imagine here for a moment that your company adopts an e-commerce platform, and you’re no longer allowed to call on that account. You’re no longer allowed to email them, meet with them, call them on the phone, text them, send them a LinkedIn message. You name it, you can’t even contact this customer. That means this customer is only receiving 75% of the overall value. Because what e-commerce can’t replace at this point is your ability to solve problems, your knowledgeable expertise, your application knowledge, your ability to go out in the field, see their processes, and offer suggestions on how to improve it. That can’t be replaced…yet. I say, who knows? Maybe it will in the future, but for now, your job is safe.

And not only that, e-commerce can’t replace the relationship that you’ve built with your customers. Relationships matter, especially in distribution. It was interesting. In our most recent buyer’s survey, we asked decision makers, “Why would you choose one supplier over another,” and in both cases, relationship with the salesperson ranked higher, meaning more important than price. It ranked higher than price. So again, relationships are more important than price.

It’s interesting, earlier this week, I was working with two different companies. They’re in completely different industries and I had two different salespeople give me examples of how they were able to win business at a premium price because of the relationship that they’ve built. In fact, in one instance, the customer actually said, “The reason I’m going to pay 7% more is because of the relationship we have.” The customer directly mentioned it.

So, for salespeople out there right now, if you’re worried that e-commerce is going to replace you, I would say worry more about the value that you’re creating. Most top achievers are not worried with about e-commerce replacing their position. They know they play a pivotal role. So if you have too much concern about e-commerce replacing what you do, maybe you’re not creating enough value. Consider that for a moment and look for those opportunities to create more value. Look for problems to solve. Look for opportunities to demonstrate your expertise. Find a way to follow up more diligently. Make sure you’re being the resource quarterback for your customer and organizing and dedicating resources to making sure they have the best experience. And also, get out there and prospect and find new opportunities. You’ll be creating some value.

Make it a big day.

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