Red On Marketing Blog

B2B Sellers of the eCommerce Seas: Promise of the Shopping Cart

Like the crafty Pirates of the Caribbean, B2B sellers lured by tales of gold on the high seas of the Internet need to be aware of the dangers lurking in ecommerce waters.

Just as Captain Jack Sparrow and Will Turner have different goals and fighting styles, each business has different needs. For example, typically B2B companies have comparatively few products posted online compared to thousands featured on a consumer site. That leads to different considerations when choosing the appropriate vehicle for sailing off into the profitable sunset.

So before you hoist your flag and open for business, let’s take a moment to understand the moving parts in a working ecommerce platform.

Payment Gateway: This virtual port is where an order is actually charged to a customer for a transaction. It is not part of the shopping cart! Payment gateways provide a high security Internet portal for each merchant for manual order transactions and account reporting. The gateway also offers an application programming interface, or ‘API’, for sending and receiving encrypted order transaction information.

This is the source of eCommerce, the passing of dubloons from one account to another electronically. A payment gateway does not need a shopping cart, but a shopping cart needs a payment gateway. The merchant pays a monthly gateway fee and a percentage on each transaction.

Merchant Account: A B2B seller needs a merchant account to accept credit card transactions from the gateway. A merchant account is generally an added option to an existing business account at the business’s local bank. The merchant pays a monthly fee and a percentage on each transaction. Many factors come into play when a bank calculates a merchant's various fees, so it’s important to keep a working relationship with your banker. Missing data like exact address match, as well as off-page factors like your business credit, can influence your rates. Take the time to shop around for rates. The points can add up faster than skeletons in a Disney battle scene.

Alternative Payment Methods: Be sure to examine both sides of every payment method. PayPal accepts credit cards from out-of-network clients; however they have a lifetime limit ($2,500) before clients are required to sign up. PayPal can hold funds from out-of-network (large amounts) or unverified sales. This is part of fraud protection and can take some time to clear. A merchant account, on the other hand, goes right into your bank account. You own it, not PayPal.

Shopping Cart: In its most basic form, a shopping cart is a specialized web application that allows a customer to add products, calculate prices, estimate taxes, and estimate shipping. The application will then bill (not charge) the customer, produce a nice receipt page and send an email confirmation.

Shopping cart websites are essentially the check-out part of a brick and mortar supermarket and a virtual product catalog rolled up into one. The idea is to make it work like a real shopping cart... where you walk around choosing stuff and putting it in your basket. When you're ready to pay, you go to the checkout and it's all added up. You pay by credit card or debit card, and your payment is verified electronically. On the merchant’s side all the payment transactions and approval codes are batched for payment at the end of the day via the gateway. Sales are compared to gateway transactions to reconcile the accounts. 

Fraud protection: The online merchant is at a disadvantage with fraud, having both cyber gangs and the credit card companies against them. Specialized services provide card-not-present fraud protection for merchants at an additional cost. 

The Whole Enchilada

A gateway combined with a shopping cart application provides the greatest flexibility in selling products by giving payment transaction and merchandising tools to the B2B company. With that flexibility comes additional learning and time requirements. 

When evaluating services, don’t forget the cost of your time in managing a store and the daily clerk duties it entails. The simpler the flow, the easier it will be to utilize the resource.

Separate “must haves” and “nice to haves” based on your long-term business priorities. That’s where developing a written business plan around an online service or product line is so important. Mastering the mechanics of digital distribution and payment is far more important than trying to build the best B2B website at first. Small steps get you there quicker.

There is no one size fits all in B2B online sales.  That's why it is important to get the right kind of help with B2B eCommerce.

I just want to take payments

Many times in the services industries there is no one set price for a product, or clients pay for time or by subscription. This can be difficult to handle with a standard shopping cart. That is where experienced sailors of the ecommerce seas can help keep you from getting seasick.

This is the first article in a three part series on B2B eCommerce. The next installment examines the pros and cons of different ecommerce solutions and how you can minimize the price of doing business online. Please share your experiences and ask your burning questions about how to protect your booty from the curse of too many fees.

This article is by Sam Chapple, captain of Ecommerce and Internet Marketing at B2B Communications.

B2B Websites -- What You Get For Free (Alot of Work)

When it comes to choosing a web content management system to build your B2B website, what you get for free is a lot of work... especially if you try to integrate with a shopping cart or CRM.

When people evaluate a Content Management System for a B2B website, they often miss some very important requirements. They always seem to look for the one that’s ‘best’ and cheapest. Instead, they should base the choice on the intended audience and skill set of the site operators.

Probably the biggest mistake is going for a Content Management System that is perceived as ‘free’. This is a mistake because there is skill in running a website, and many ‘free’ CMS require a multitude of skills and time to develop, test and deploy. This does not end up being a one-time cost either.

Let’s look a little closer at the various options without getting lost in a particular CMS.

Open-Source

There are many ‘community’ based software projects like WordPress, Drupal,  Mambo, Joomla!, Post Nuke and a whole lot more that are technically free. That is, the source code is
available to everyone and can be freely modified and distributed, but not sold.

These projects are excellent sources for development applications but are not some kind of out-of-the-box solution. Many times they end up in the hands of inexperienced but well meaning people who get completely lost in the complexity and the assumption of open-Source software that you know what you are doing, and if not, you will find the answer. That is, no technical support.

It’s true there are user forums and it’s true that open source is a great hobby. But if you are not willing to dedicate your precious time learning about the applications and getting under the hood, then ‘free’ is not ‘free’. 

Closed-Source

Closed-source software applications are proprietary. That means the code behind the application is not available and is usually a trade secret. This is done for business reasons. It’s very difficult to develop software without money.

Companies license their closed-source applications for use only, not modification. Closed-source software companies like Oracle or Microsoft also offer paid support.

The big drawback to closed-source is its cost: It’s relatively expensive and requires additional resources (as does open-source) such as web servers and operating systems.  

Hosted Services (SaaS)

Answering the call of the small business hosted services are application service providers (ASP) and the new breed, SaaS, or Software as a Service. This means you rent the application and not own it. This is an easy way for small businesses to get the tools that the big businesses already have. Probably the most well known is SalesForce, a Customer Relationship Management system that offers cradle-to-grave tracking of business leads and contacts.

A powerful inbound marketing platform called HubSpot incorporates blog, website and content management along with powerful analytics to track leads generated through a process called ‘closed loop marketing’. This is a process of gaining feedback in the form of email addresses, phone numbers and business addresses as lead follow-up, and data to track results.

There are also times when unscrupulous website designers sell an open-source application branded as their own. It’s important to understand and compare your options. It’s fairly easy to check on a brand by using a search engine like Google. You should be able to find a fair amount of feedback on a particular system you are interested in.

What you get for free is a lot of work. I know. I have a ‘free’ sail  boat in my back yard. Free comes in many forms.

This article is by Sam Chapple, Ecommerce and Internet Marketing Manager at B2B Communications.

B2B Marketing Agencies - Who Needs 'Em (DEALBREAKER SERIES PART 2)

After you resolve to do more effective marketing, there are a few decisions ahead. Among them:

1. Do we need professional help? Or could we do it ourselves?

There are lots of good reasons to self-serve:

• Saves cash
• Keeps all marketing communications efforts centralized
• Builds skills internally
• Leverage free resources available

DIY resources

There are great resources available for DIYs. I recommend just about any MarketingSherpa benchmark report or how-to guide you can get your hands on. Even if it's an old outdated version it could  be an eye opener. Vendors like Google Adwords include campaign set-up and support, so why not take their free advice?

Or, if you already do mailers and telemarketing, you could always increase the volume of each. All that requires is bigger lists and a bit more cash outlay. It could be low-hassle, in the sense that the path to increased exposure is nice and short. No fussing with messaging. No fiddling with design. Just feed more bills in and get more leads out.

Machine out of order?

If that will work, do it. And instead of messing with marketing, do something more fulfilling.

It’s a question only you can answer. You have the 30,000-foot perspective on how you’re doing relative to your business goals.

But as you weigh your decision, let me offer a couple points:

• First, unfortunately, bad marketing is worse than no marketing at all. The reason is that it takes more time and money to repair the damage from a bad impression, than to make a good first impression.

• Second, if you're a b2b company, it's probably not enough to just do more of what you’re used to doing already – if what you’re doing is conventional marketing like advertising, call outs, mailers and Yellow Page ads. I could go on about why; in a nutshell, it's because savvy business decision prevent and resent interruptions. 

Inbound marketing involves helping your target market find you easily when they are searching for help. It includes such tools as search-engine optimization, which is a way of making sure your website contains the same keywords that people are most likely to use when they are looking for your kind of product or service. But it has to be done in a way that impresses both search engines and high-potential prospects. And SEO is only one of many tools used in inbound marketing.

As Laura Ramos, formerly of Forrester Research, wrote in How To Avoid Becoming Obsolete,

“Focusing simply on new campaigns, clever advertising, and delving into social media will only paper over problems. Turning up the heat on conventional marketing activities won't spur the profound changes required.”

Decision point

If you don’t need professional marketing, stop here.

And if you need help shifting to a new, more productive, inbound marketing approach, it’s still not time to hire. It's time for your next decision. Look for our next Dealbreakers article due out next week!

B2B ecommerce: best practices in 2009-2010

If you’re looking for practical, best-practices marketing advice on what works and what doesn’t, you can’t beat MarketingSherpa’s research. Nothing but tried-and-true findings straight from the trenches. The recently released 2009 Ecommerce Benchmark Report is full of new information to help drive sales. Here’s why I’m a fan…

We’re loyal followers and avid readers of their products – and also affiliates. That means you can purchase new reports at a discount from our site. Very cool.

Zero in on what matters to you

I especially like how MarketingSherpa acknowledges that not all organizations are created equal and what works in one industry doesn’t necessary work in another. That’s why they’ve separated out lessons to be learned from “High Knowledge” organizations that are making use of advanced web analytics and automation. And why they’ve broken out data for B2B vs B2C products and B2B vs B2C services.

That means, as a B2B marketer, I can look at products or services data and zero in on:

• Trends, benchmarks, and challenges
• Metrics for cart abandonment, tools and promotions, and shopping cart tests
• Free and paid media tactics and tests
• Email, offline, search, and social media tactics
• Conversion rates

Think beyond pricing

Knowing we’re all coping with lean economic times, the report also highlights tactics and tools that can increase revenues without further chipping away at slim margins, such as:

• Limited time/inventory promotions
• Loyalty programs
• Customer reviews/ratings
• Product videos

 

Find answers to top questions

Most importantly, the report answers questions that are top of mind for many ecommerce marketers, such as:

1. How can I lower shopping cart abandons?
2. What percentage of repeat customers should I expect?
3. What motivates online shoppers to buy?
4. What marketing tactics bring the best ROI?
5. What’s the average ecommerce search click conversion?
6. How does my site’s search presence stack up against our competitors’ visibility?

We’re conducting a shopping cart audit next week. As an e-retailer, it’s too easy to lose touch with your customer’s experience. Having an objective third party test the waters can help ground you in the user’s perspective and answer questions such as:

• Is it working the way we expect?
• Where are the leaks?
• What is causing friction?
• How can we make it easier?

Help a marketer out

Here’s where you can do your part for the greater good. We’ve likely all had a bad online shopping experience. If there was one thing – or two or three – that you’d change to make a process easier, what would you suggest?

My pet peeves are 1) being asked to enter my shipping address, even if it is the same as my billing address. Couldn’t you just give me a checkbox: “Use billing address as shipping address”; 2) wiping out all my data if I try to submit without filling in a required field; 3) not letting me change the quantity ordered once I’m hit with the grand total.

What are some of your online shopping rants?

What’s wrong with this Google Adwords Ad?

By Rebekah E. Donaldson

If a prospect clicks your ad, does that mean “your advertising works”?

What's wrong with this Adwords ad?

Is a click that takes a prospect from a paid ad to the advertiser’s website a case of advertising working? 

Google Adwords says yes. I say heck no. So I’ve posted an illustration of how I think we differ at our site, in “What’s Wrong with this Google Adwords Ad?“.

What do you think?

B2B marketing services pricing – an elephant in the room

Today we rolled out fixed-price marketing services packages — and have been asked by a number of colleagues why in the world we’d show our hand this way. Here’s my two cents.

Value is a ratio – it’s not just about benefits

Doesn’t providing entry-level packages with clear pricing attract the wrong sort of prospects?

No. The best prospects know that value is a ratio… a ratio of benefits received to investment made.

To make good decisions about value, they need to know about both.

Paradox of success

And, paradoxically, the better we’ve become at earning status symbols like valuable inbound links, speaking engagements, top Google rank, and the like, the more anxious our best prospects become about whether they can afford our expertise.

Anxious is bad. So our new packages are designed to provide an anxiety-free context in which to think about going to first base with us.

No fear

For marketing consultants, price is the elephant in the room. Marketing Directors and small business CEOs need to know fees in order to make good decisions.

So we’re calling it out. We provide killer value, so we try to have a “no fear” approach to information sharing.

This is the first published guide I know of re Sacramento marketing services. Am I missing something else out there? Please weigh in.

B2B marketing consultant must-haves

To engage decision makers, B2B companies need to prove their value through a strong business case, build sites and other communications vehicles in a way that fosters trust, and pull in prospects rather than chase them. Helping companies get that done requires special skills.

 

B2B marketing consultant must-have qualities

If you’re a Marketing Director at a company that sells products or services to other companies, I think you need a team that:

1. Focuses on B2B marketing. Because buying committees expect a powerfully built business case.
2. Has a systematic approach. Because that’s the only sane, reliable way to project and get marketing results.
3. Covers all major marketing disciplines. Because you need the right tool for each job.
4. Excels in internet marketing. Because 92% of B2B buyers use online resources when looking for products and services.*
5. Tests and reports. Because you need help to show others and steadily improve your marketing ROI.

Profile of an even stronger B2B marketing partner

There are other important traits. For example: 

• Your B2B marketing consultant should be a trainer, because you need to build capacity.
• They should be able to bury you in proof of performance, because you need consultants to back up their fabulous claims.

These qualities are not on the list of ‘musts’ because building capacity is not job one, and you always vet potential hires. It’s hard enough to find companies that fit the profile outlined in the bullets above. Let’s not make this mission impossible.

We argue in a forthcoming e-book called “The New Rules of Outsourcing B2B Marketing” why these qualities are must-haves. I hope to post it in the coming week. (Yes! David Meerman Scott’s ”New Rules of PR” e-book inspired our book’s title…thank you DMS.)

Sacramento technology industry health and feeding

I spoke last month with a reporter writing about the health and direction of the Sacramento region tech industry. There’s doom and gloom in much of the news, but all the software companies I work with are positioning for growth. Where is the disconnect happening?

I may have a skewed sample. Clients I work with are working their tails off to attract the best clients with the least amount of effort and expense. And that’s the sort of company that calls in a Sacramento marketing consultant.  

Other positives: at least three of our South Placer area tech clients are hiring not firing. Several will roll out additional products and services in summer and fall ‘08.

Every time there’s negative buzz about the economy, Sacramento technology firms choose a path with respect to lead generation — actively or by default. Cut back? Accelerate? Wait and see?

It seems to me that the most successful players are not reactionary — they find ways to get closer to and more trusted by their clients and target audiences, proverbial rain or shine.

Zooming out to look at our whole region, the SARTA Technology Index rose by 2.79 percent to a new high over the second quarter of 2007. In fact, it slightly outperformed major public indices. (Credit: http://www.sarta.org/go/sarta/tech-index/)

That said, the Sac Region is in a poor competitive position world wide. Job creation follows engineering and math. US engineering graduates 122,000, Asian Countries 636,000 and 370,000 in European countries.

Why is that? Education is really the engine for our region’s growth. And Sacramento is in the lowest 25% of high school science and math proficiency in a state that is almost last at 49th.

70% of all jobs offered in the region do not require a college degree. So some think there is NO true job creation happening here, and that it’s a country-wide problem that’s built over 30 years. Still, the Sac Region is almost last in USA. (Credit: Above stats assembled by Warren Smith of Warren Smith Group.)

Looking at those sorts of numbers, in ‘04 I joined in the activities of AeA, a national technology trade association addressing, among other issues, science and technology education.

Then a year or so ago I joined up with Michele Wong to work on establishing a landmark science center in downtown Sacramento called Powerhouse Science Center. It will be visible from I-5 when passing downtown, and should open by 2011. I’ll post a link in coming months.

The Powerhouse effort is the beginning of a new way to celebrate the breakthroughs coming out of our region in green energy/technology, food science, biotech, and other areas.

We are engaging the corporate community and large employers as partners in the solution. We want success to mean better test scores, job growth, more local tech and science innovation and — best of all — a lifelong love of science and technology among Sacramento region kids and young adults.