Q&A: How To Use Technology To Improve Your Bottom Line

Industrial Distribution's Jack Keough recently hosted a webinar entitled "Distributors: How to Use Technology to Improve Your Bottom Line." The event examined the role of technology in today’s distribution marketplace and how it can be used to improve bottom-line performance. The audience had the opportunity to ask our panelists questions at the end of the webinar, and the answers are here in an exclusive Q&A.

Industrial Distribution's Jack Keough recently hosted a webinar entitled "Distributors: How to Use Technology to Improve Your Bottom Line." The event examined the role of technology in today’s distribution marketplace and how it can be used to improve bottom-line performance. Topics covered included:

  • Ways distributors can use technology as a competitive weapon in order to reduce costs, find new customers, and improve customer satisfaction.
  • How your website can be made into an important marketing tool for your business operation.
  • Specifics as to how to increase your business through e-commerce.
  • NEW data from the ID Survey of Distributor Operations, discussing how distributors are using solutions like ERP, CRM, and e-commerce to their competitive advantage.

Panelists for the event included Steve Epner of BSW Consulting, an industry veteran who has been studying the distribution marketplace for many years, and focuses on ways for distributors to use technology as a competitive weapon. Additionally, Paul Scott, president and founder of the GoingClear Group, a Boston-based web development, management, ventures, and solutions company, offered suggestions on making your site more navigable and how to measure and analyze traffic to your website.

The audience had the opportunity to ask both Steve and Paul questions at the end of the webinar. The popularity of the topic led to quite a few inquiries, and because of time constraints not all of the questions were able to be addressed. Since this topic - and these questions - are at the front of distributor's concerns in the marketplace today, we have compiled those questions and Steve and Paul's answers here. Please chime in at the end of this article to share your own observations or ask further questions in the comment section below. To watch the webinar in full, please click to register here.

Question: What level of efficiency must a distributor’s ecommerce site contain to be considered competitive in the marketplace?

Steve Epner: It depends on the market, geographic area, competition, and the value proposition. There is no one answer.

Paul J. Scott: In terms of having an efficient, competitive distributor e-commerce website, we would recommend on the operational side that your website be developed in a scalable, feature-rich framework. From there, you need a user-friendly and effective design with well positioned CTAs (Call To Actions), along with an easy user-experience path from home page to check-out. In addition to on-site website efficiencies - there are also several ways to be effective off-site as well from creative marketing including SEO (Search Engine Optimization) and Re-Marketing campaigns to follow your users throughout the web if they have visited but not purchased from your website just yet.

Question: How do bounce rates for sites not optimized for mobile vary relative to those that are optimized?

Paul: The simple answer is that you want to be Mobile Optimized. We've seen bounce rates higher for non-mobile optimized websites, which is a reaction to your prospects or customers wanting to make a purchase, but not having the user-experience/optimization needed to complete that purchase . . . Mobile websites can be developed, typically, at a lower cost than app development.

Question: Is PPC (Pay Per Click) generally better for SEO (Search Engine Optimization) than organic methods for businesses that generally only target smaller regions vs. nationwide?

Paul: We are fans of a balance of some PPC and some SEO. Typically, you can get much better long-term results from targeted geography-based SEO as opposed to PPC. It's our opinion that SEO produces a better ROI for geo-based Search Engine Marketing.

Question: Does it make sense to buy entire ERP systems anymore? Or does it make sense to buy modules that excel at a specific task (inventory, marketing, etc.) and then link them together via an API?

Steve: This is a great question without a great answer. Multiple applications tied together is a good idea. We call it "best of breed" and it has been around for a long while. Until the middleware (like ION and ICE), they are better integrated and proven, although there is still a great deal of extra work related to using best of breed concepts. There is also a concern with finger pointing. Over time, I believe it will become more prevalent.

Question: Leasing vs. buying software?

Steve: Mostly it is a question of internal financial management: do you want the cost to be on the income statement (a monthly lease) or on the balance sheet (an expense and depreciation)?

Question: I'm sure the start-up cost for a functioning ecommerce site is all over the map, but can you give us an idea of what to budget?

Steve: First, you have to decide what the purpose of the site is going to be. Is it an information site, an interactive sales site, an ordering site, a catalog site, or a set of portals? Then, you need to know if it will be used mostly on mobile devices or desktops/notebooks. If it is for commerce, will there be lots of small orders, or a smaller number of large orders? Finally, are the users sophisticated or beginners? Given those answers, it is almost easy to give you a ball park figure that only has a 90% fudge factor built in.

Paul: The cost of an ecommerce website can certainly vary. My company, GoingClear Interactive, has developed ecommerce websites ranging from $20k all the way up to $120k. For starter type ecommerce web properties leveraging existing back-end frameworks, typical costs can between $20k to $50k.

Question: What makes a registration more 'sticky' Why should someone fill out a 'Who are you?' form?

Steve: Stickiness depends on many things. A more sticky registration can be one where you provide real meat for them to access, but only as long as they are connected. It is an old trick, but it works. The amount of information on the form is directly related to the value of the material provided. For a simple "advertising blurb," the max is an email address. For a $50 book, you can request a great deal more. You will still have to do some testing to understand what your market will accept.

Paul: Excellent question - you have to show value.  It's safe to say that the user who is about to fill out the form fills out plenty of forms, so why should fill out this one?  You shouldn't be just another collector of data for your own marketing purposes.  Instead, provide some sort of complimentary guide or top ten list that might entice them to complete their registration.

Question: What big data technologies should we be paying attention to?

Steve: Big Data has not reached the normal sized distributor yet. It is coming. The fact that people are finally waking up to the possibilities of using these relationship managers is big. Anytime, anywhere, on any device: big data is huge.

Question: How can a small distributor get involved with ecommerce and focus on legitimate inquiries and not get bogged down with fraudulent inquiries and international spammers?

Steve: You need filters on the way in. Make it too hard and you will lose real buyers; make it too loose and you will waste too much time. Experimentation is the best way to learn.

Paul: Spam and fraud can be defended against with simple coding and programming within the form pages of your website so that it helps to lessen the amount of those illegitimate requests, the ones requesting 25 million parts with overnight shipping.

Question: What suggestion to you have for a regional distributor who has not established 'national' reach, yet sees the need to get into ecommerce?

Steve: E-commerce can be done on a regional basis. You can use key words to focus your marketing efforts. In your write up, keep focused on the regional nature of your business and it will serve you well.

Paul: To begin, ecommerce is the key to whether you are a national brand or local brand. Websites are scalable as long as they are initially developed with that in mind. You can get started with a regional focus and can always expand your reach as you go with ease in terms of your web property.

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