Looking for a growth strategy that supplements your existing technology platform, focuses your salespeople, requires nominal investment and can generate a 400% increase in MRO material sales from industrial or institutional accounts. And if you don’t have a commerce-enabled website, it gets you into eCommerce quickly and in the most profitable segment?
Jeremy Friedman from Greenwing Technology shares how:
In a previous article we’ve defined e-Procurement and punchout catalogs and why they are a critical component to implement and essential to winning the industrial MRO and institutional (education, medical) MRO business. So the real question is how do you use e-Procurement and punchout catalogs as a strategy?
400% Account-driven Growth
At this year’s Jaggaer REV conference we asked some of our key university partners for some key statistics on how a punchout catalog can help an organization gain more business from them. We can assume you would get more business, but how much business?
We spoke with a major university in California that said that before a punchout catalog was implement an organization had $250,000 in spend from the university. In 3 months the MRO spend increased to $600,000. In a year it is over $1M. That’s over 400% growth in under a year, simply by having a punchout catalog to capture MRO sales … at good margins. Obviously, it’s not that simple, this organization had its sales reps and marketing team reach out to the university campus to let everyone know that they’re now on the Jaggaer marketplace. That’s why having a punchout catalog is great, but wrapping it in a whole business development strategy is key.
Delivering on the Sales Promise
Putting the right technology partners in place must come first, but assuming you’ve done that already let’s talk about building that strategy.
- Prospecting: First you must identify potential prospects within your customer base and turn your sales team loose. Essentially, you need to guide your salespeople.
- Asking the right questions and pre-qualifying them to make sure an organization has e-Procurement and of course will allow you to be enabled on their system is the first step. Just because you have a punchout catalog doesn’t mean everyone will let you onto their e-Procurement system as a punchout catalog.
Let’s assume they said yes and you go through the integration and everything is working well, but the sales remain the same or even drop off a bit. How can this happen? Think about when something changes in your life, say your favorite restaurant moves locations across town but you instinctively drive to the old location out of habit. The same can be true with a punchout catalog. If a user is accustomed to faxing an order or placing an order over the phone, but now they need to login to the e-Procurement system and punchout to your catalog – they simply may not have gotten the memo on how to order through the punchout. This is where your marketing team comes into play.
- Acount-based Marketing: Your customers’ procurement departments want your punchout catalog to be successful (remember they have resources tied up in it too!) so they are generally willing to help you prepare communication to their users. Everything from schedule on-site training classes to webinars to email blasts to help promote the catalog.
- Expanding Your Business: You can also use e-Procurement to attract new MRO customers as this as an opportunity to market to previous customers that may have only periodically ordered from you. This is a great opportunity to reconnect with those users on the new way to order.
As you already know, a lot of work goes into the technical and sales side of developing a punchout catalog – now is the time to launch the marketing engine to ensure it succeeds.
For those already invested into eCommerce, this is a way to get a tangible ROI on that investment. If you don’t have an e-Procurement strategy to support your eCommerce business your, essentially, under performing and missing an opportunity.
If you don’t have eCommerce on your website, no problem. For e-Procurement you need a robust eCatalog plus an e-Procurement platform / process. Contact Distributor Data Solutions (DDS) for an eCatalog (ask about their DCX product) tailored to the SKUs you sell that is updated for you (and can have 100,000s of items) and Greenwing, to get the process started. You can launch this strategy by the beginning of the year to power sales and profitability in 2020.
Alternatively, if you know you want a new website but can\’t integrate with your ERP system, EvolutionX-Electrical by ES Tech Group can launch a robust website with DDS content and integrated punchout capabilities and you can commerce-enable the site later, when you are ready. Very cost-effective and again could be implemented by the end of the year.
400% growth within a year within in an account, of essentially stock business? They can either give the business to you … or to Grainger / Amazon. This could be a low cost sales / marketing tool that can power your 2020 sales in a market that is expected to be \”soft\”.
Your suppliers may even thank you!