Maximizing ROI in B2B eCommerce with Brian Beck of Master B2B eCommerce

Full Transcript

Sawyer: Hello, everyone. Welcome back! This is Sawyer Frank, your co-host of the B2B Uncut podcast. Today, I’m joined by Brian Beck.

Uh, hello, Brian. How are you doing today?

Brian: Great, Sawyer. I’m excited to be here with you. Thanks for having me.

Sawyer: Likewise, long time coming, brother. Um, so maybe we can just get started by asking a little bit about yourself and your background. Obviously, you’re doing incredible things alongside your partner Andy Hoar at Master B2B. Uh, just for our audience today, can you tell us a little bit about who you are?

Brian: Yeah, sure. Happy to. Thanks again. Uh, so I’ve been in this eCommerce field for, oh gosh, 25 years! Making me old here, Sawyer. Every time I say that, another year goes by.

Anyhow, yeah, I’ve spent most of my life as a practitioner, Sawyer, as I think you know. I was the VP of eCommerce at Harbor Freight Tools and a number of other companies. A lot on the consumer side for the first, you know, 17, 18 years of my career.

But I really got into the B2B side about seven, eight years ago now. I published a book called Billion Dollar B2B eCommerce, and I partnered up with Andy Hoar on the Master B2B Thought Leadership Series, which has really evolved into a community of B2B eCommerce executives, manufacturers, and distributors.

We cover all kinds of topics that are top of mind for them. We meet in person, we have virtual events, etc. It’s really been a great group.

The one other thing I do, for context for your listeners, is I also am a managing partner at a company called Inceba, where we work on Amazon programs for large B2B companies, particularly manufacturers. So, somehow I have two full-time jobs. I’m not sure how that happened.

Sawyer: And somehow we got you on this podcast, so thank you so much for joining, Brian.

Obviously, Master B2B is a very well-respected association. As I understand it, just a couple of months ago, you guys held your Mindshare Summit, which is an annual summit. I believe this year it was in Chicago. Uh, we’d love to learn a little bit more about it.

I’m sure our audience members would as well. Could you tell us a little bit more about the summit, the format, and what were some of the key takeaways from this meeting?

Brian: Sure. Yeah, great. Uh, thanks for that. Um, so our summit, we do it once a year, and it’s a meeting of about 120, 130 or so industry leaders from mid-market to large manufacturers and distributors. They are the digital leaders, right? The VPs of eComm, the chief digital officers, etc.

It’s not a conference as much as it is just sort of a get-together. We talk about issues that are top of mind. We do some research leading into it, and we have breakout sessions where we talk about different topics that are really critical for these folks, and they vote on what they want to talk about in advance.

So, it’s interesting to see what the industry wants to talk about. Again, these are folks that are all leading digital transformation at their companies.

So, what did we find was top of mind for these folks? Well, it’s things like data, for example. We talk about the data problem in eCommerce, and it’s pervasive. It was one of our hottest round tables at the event where we actually couldn’t fit everybody in the room that wanted to participate in the conversation because it’s a pervasive issue.

You know, it’s kind of a hot potato with manufacturers passing the ball to the distributors, but the distributors saying, “Hey, wait a minute, this is your product. We need good data from you.” And then, of course, there are system implementation issues and things like that, and PIM systems and such. So, that was one hot topic, Sawyer.

Others included things like ROI. How do I get my C-suite on board with investments? You know, in the solution provider world, we think about the clear return on investment.

But what we sometimes forget is that these folks who are leading digital, they’re fighting a battle in their companies, and they have to get the alignment of different business units. Their boards, their CEOs have to say yes, and what we found in our research, Sawyer, is that these folks are under more pressure than ever to drive ROI from these investments, more so than even two or three years ago, our research revealed that.

So, you’ve got these folks wanting to figure out from their peers how they have addressed it, how they talk about ROI, and how they get their other businesses aligned. Those are just two of the topics. You know, we talked about AI, research relevance, platforms, and all kinds of things that are in your world as well. So, it was a great conversation.

Sawyer: I can certainly relate to a lot of those challenges being on the vendor side, of course, being in sales, selling an eCommerce platform. They’re all challenges that we need to overcome as well.

This audience has heard me say it before, but with eCommerce being lower in the food chain, say, versus an investment in ERP or sometimes PIM, if your data readiness isn’t there, it becomes a garbage in, garbage out scenario. So, maybe we can start to talk a little bit about data.

Is there anything in particular that you may have found from those roundtables or overheard in terms of how people have been able to overcome these data challenges? Is it hot new hires? Is it investments in third-party solutions?

Brian: Yeah, we talked. It was interesting. It was funny. I joke, and you’re too young, Sawyer, but if you remember, some of your listeners might remember Jerry Springer, right? It was a talk show.

I joked that in that room, I facilitated the conversation on defeating the dirty data problem, and I joked we could have split the room into two, distributors and manufacturers on either side, and had them go at it, throw chairs at each other, Jerry Springer style, because one of the key things is there’s sort of a battle on who owns it, right?

People recognize that there’s an investment that’s required to fix this, and you’re absolutely right. You can put up, you can have a wonderful system, an eCommerce platform, a PIM system, whatever, but if you don’t support that with resources, and there’s a real investment there in resourcing, it’s not going to get solved. You can have the greatest system in the world. It doesn’t matter if you don’t resource it correctly.

So, what came out of this discussion was the fact that that particular type of investment, the type of people that people are investing in, hiring, to your point, it is about that. Systems are an important component of it, but they’re not the solution in and of itself.

I think we did reach a kind of kumbaya where people were recognizing across different business units that they all share some responsibility in this. Ultimately, though, the manufacturers are the ones who know their products best. It really ultimately is the source of truth for this stuff.

So, the manufacturers have to step up, and I think there’s some realization there. We had folks like Zoro in the room, talking to the CTO of Zoro, which is a division of Granger, a multi-billion dollar company, talking about some of the things they’re doing to address this and how they have effectively addressed it, and not only that, that there’s actually a real return on all of that stuff, right?

Because if you fix your product data, you’re going to get a better conversion rate on your website. You’re going to get more sales. You’re going to have happier customers. These are all things that you can quantify. So, there’s a myth there that you can’t quantify this stuff, and I think that’s being overcome.

Sawyer: Yeah, it’s well said. I mean, ultimately, in this B2B game, part of what makes it fun is that it is a trickle-down effect, right? I mean, ultimately, all these products are, I shouldn’t say all, but many of which are landing in the hand of consumers, and oftentimes they’re buying them through distributors or dealers or other sources, right?

It’s really interesting. So, obviously, it’s a telltale sign that there needs to be ownership internally over the data, and I would say the same for an eCommerce platform, right? I mean, you’re not going to find much success implementing an eCommerce platform if you don’t have a project manager that’s assigned to it, with buy-in from the business as well as the technology. I mean, these things work congruently.

So, on that end, you talked a little bit about ROI. I can certainly tell you from experience in selling this to eCommerce vendors, or excuse me, merchants, for the past 10 years, that there are probably some known metrics, but I don’t want to make assumptions for our audience here today.

So, what would you say are some of those key metrics that the C-suite is really tracking today?

Brian: Right. Well, I mean, the C-suite tends to go to the simplest metrics and the easiest to communicate, which are things like eCommerce penetration to total sales.

“Oh, we’re Granger. We’ve got 70% of our sales coming from digital channels.” You know, that’s kind of the loudest metric, the one people talk about the most, and the one that I think some folks can lean into to help with the business case.

However, it doesn’t tell the whole story because we know that eCommerce impacts a lot of other things. We found this on the consumer side. Back in the day, when I was running, when I was VP of eCommerce at these different companies, we would talk about how eCommerce, particularly places like Harbor Freight Tools, the website would be driving in-store sales. This is stuff that’s well established in the consumer side of eCommerce.

In B2B, this is brave new world stuff, right? I joke, it makes me feel young because this is stuff we covered 15 years ago. Anyhow, B2B is actually more complex in all fairness. I mean, you think about a company like, I’ll use Cardinal Health as an example, a Fortune 15 company, you know, huge amounts of revenue. Guess what? A lot of that goes through EDI, right? It goes through other types of formats, but people research the products on their website, but they may make the purchase through a different channel.

So, you have this considerable challenge related to revenue attribution, which translates into challenges with your ROI model.

So, what do you do about it? Well, you know, I think you have to look beyond just the penetration metric to find the answer. My favorite metric, and one that seems to resonate in our conversations around this, is share of wallet from your customer. How much are you getting from your customer that you could potentially get across all channels?

It doesn’t matter if it’s digital or not. Are we seeing that metric improve?

You know, I was talking with Steve Baruch, who’s the former CMO at MSC Industrial, which is a big, massive, digitally advanced distributor in the industrial category. He told me that they would go in and they’d actually understand their share of market at every single one of their customers.

They would know how much market potential, how much sort of attainable market they had at their different customers, particularly obviously their bigger ones, but they would measure that. So, what kind of share of wallet am I getting out of my potential at that customer? And they would know that. And this is an advanced company. These folks have digital people in their C-suite. They’re really centered on digital and eCommerce as a business.

So, I think we’ve got to think about metrics, and what’s coming out in our conversations in these roundtables are metrics like that, right? To think beyond just eCommerce penetration or conversion rate on my website or things like that. What is it doing to the overall business? You have to look across selling channels to capture that. And so, that’s my favorite metric anyway. What do you guys see in your experience?

Sawyer: Oh, I wish it was more like that if I’m honest.

Yeah, a lot of it comes down to the brass tacks of what the online channel is doing. I think that’s really eye-opening for a lot of the audience that might be evaluating a new eCommerce platform that it’s not all about online.

It’s really become an omnichannel world where online revenue is very important, without a doubt. Across two different eCommerce vendors, I can tell you most of these value propositions are the same. We’re going to help you increase efficiency, which leads to cost savings. We are going to help you increase customer satisfaction and retention. We are going to help you increase sales by average order volume, whatever it may be.

But I think this world is evolving, as we know, eCommerce in the B2B game is pretty young, much like yourselves. Obviously, OroCommerce has a lot of experience in the B2C world as well, and they’re not created equal, right? I think this conversation, this point has made that pretty evident that there’s a lot of channels, right?

So, I think one of the challenges that a lot of organizations are having that we’re seeing as well is creating that story for executive buy-in. I think a lot of it comes down to getting boots on the ground and talking to the people that are experiencing these challenges.

So, for one of these evaluations that we’re going through at the moment, it’s working with a certain business entity. They’ve built a small group of sales reps and key customers that they’re meeting with on a regular basis to build that case.

But the challenge, I think, in B2B as well, is that no two businesses are the same. In my past life, I can steal this from a mentor that I had there as well: take a consumer brand like North Face and Patagonia, which are two of my past customers that we helped build B2B sites for. To the consumer’s mindset, it’s the same down puffy jacket, right? I’m buying the same product, but how they’re selling it and how they’re using their technology to put that jacket in front of their retailers and ultimately their consumers is entirely different.

I think the same goes for two organizations that might share the same technology as well, right? So, you could be an industrial distributor and, let’s say, a medical distributor. Just because you’re both using the same ERP system doesn’t mean that the integration is going to look the same.

So, I mean, a lot of our competitors, I think a lot of the vendors in the market, will talk about connectors, right? Pre-built integrations. I think if you talk to the folks here at OroCommerce, most of us would say that no such thing exists, right? Because your business is unique to yourself, it’s going to require some customization.

So, I think that that kind of leads us into talking about a few things. Omnichannel being increasingly more challenging. Obviously, you’re our resident expert, but certainly someone that we can lean on to talk about Amazon and that Goliath coming into the equation. Maybe we can talk about that for a bit.

Brian: Yeah. Well, you know, thanks for that color. That’s really interesting because I would agree with you that B2B is a very diverse industry.

You talk about it in general, but as you get down into the specifics of customer needs, they are bespoke by different types of customer, different types of industries, customer groups, et cetera.

There is one thing, and I was thinking about omnichannel, and it ties into the ROI stuff we were just talking about because one of the common things that we do see, that we hear from our community, is overcoming the issue of incrementality. This applies to Amazon, too.

This is a misconception. We have to defeat this, Sawyer. This is a misconception that it’s only about incremental revenue. All these channels, Amazon, eCommerce, there’s no such thing as omnichannel. Isn’t it just about how much of this is really incremental? It’s not just shifting revenue from one channel to another? Wrong thinking, guys!

You have to be thinking about this as an existential issue. If you’re not in front of your customers where they want to buy, particularly if you’re a manufacturer, if you’re not where they want to buy in the best representation possible, you are losing relevance.

I use this example with Amazon, right? This is my company, Inceba. We deal with this all the time, working with large global manufacturers on their Amazon presence. We look at, you know, just do a, and this is one of my most fun exercises, take a company’s product category, I don’t know, whatever, uh, abrasive sander or something, you know, or a pneumatic sander or something, just some kind of a tool, or whatever your business is. Search for that keyword in Amazon. Look at what shows up.

You know what’s interesting? The whole competitive landscape is different. You look at the results, and it’s all just cheap stuff coming out of Asia. You know what? Some of that stuff is actually pretty good. And guess what? It’s coming from the same factories you’re building in. And guess what? They’re better at Amazon than you are. And guess what? You’re losing revenue and relevance to those 75% of B2B buyers who are now millennials, using Amazon before they use other channels to research products. You’re losing relevance, and it’s slow, right? It’s a slow decline.

Anyway, my point is, the smartest manufacturers, and again, I’m talking more on that side of the business, when you think about omnichannel, you want to be in these channels where the end buyer wants to buy. You can’t control their channel preferences, and stop trying, right?

You know, you say, “Well, I only want to sell through this channel, that channel, because I’ve sold through it for a hundred years, and it’s built my business this way.” Fine. You’re not abandoning those channels. You continue to power them, but you know, it’s really about making sure you’re relevant, which includes, to what Oro does, your own eCommerce, your own digital presence.

You know, it’s fascinating, and we just released another data point that you’d be interested in, which is that the number one place buyers want to research, we surveyed B2B buyers for our State of B2B eCommerce report, and the number one place they want to research is the manufacturer’s website. And guess what number two was? Amazon Business. Guess what number three was? A distant third: distributors.

Okay, so this has implications for distributors, but if you’re a manufacturer, you need to be paying attention to this stuff. You need to be talking to Oro and looking at deploying a capability on your own website, your own digital presence online, because that’s what the ultimate B2B buyer wants. Even if they don’t buy on your website, they want to research there. You’re the authority on your product.

So, I think from an omnichannel perspective, from a manufacturer’s perspective, you’ve got to be looking at these emerging channels and recognizing the reality of what’s happening. I put this in my book, the brutal reality, I stole it from Good to Great, but the brutal reality of the situation is that the end buyer’s preferences have changed.

Now, if you’re a distributor, omnichannel means empowering your sales force. It means knowing what these other channels are doing, like Amazon. In fact, I encourage distributors to look at having some form of an Amazon presence so they can know what that channel is doing.

Every day, I’m amazed at what they’re doing in B2B. They continue to raise the bar, and they’re taking advantage of the fact that a lot of distribution, particularly mid-market, is not doing the things they should be doing to enhance their digital experience.

So, omnichannel for a distributor, I think, means empowering the sales force with digital tools, ensuring you’re at least at the level of an Amazon in terms of your digital experience, if not better, and taking advantage of your industry expertise and bringing that to life digitally because if you’re not doing these things, it’s a gradual decline. We’re seeing the number of distributors in the United States fall every year, and there’s a lot of reasons for that, and this is one of them.

Sawyer: Yeah, no doubt about it. I mean, obviously, consumer behavior has changed the behavior of a B2B buyer.

You can call me young. I think I’m on the older end of the millennials, but it doesn’t change the fact that I can relate, right? I always want to do research before buying anything, almost to a fault, to be honest.

But it’s funny because it really kind of brings this conversation full circle as well because at the end of the day, if the user experience, if the data is inaccurate or even looks concerning, as a buyer, I’m more discerning than ever. I will move on to the next manufacturer. I will move on to the next distributor and have no shame about it.

So, it’s funny because I feel like there are now some opportunities for, obviously, manufacturers to cleanse their data to support their entire ecosystem of buyers, but also for the distributor to pick up the data. I understand that there are a lot of data feeds that are taking hold across different industries.

I’d love to get your take on that. It might be a hot take, but do you feel like these data feeds that distributors can subscribe to are a benefit to their business? Or how could they potentially improve?

Brian: Yeah. So, I do a lot of work with, or have spoken multiple times and worked with, Affiliated Distributors. If you’re familiar with that group, that’s one of the things that they do, right?

Their core value is for distributors to work with suppliers to normalize data and make that available to their members. Quite frankly, yes, it’s a great benefit because data is fundamental. It’s foundational. If you don’t have clean and accurate data, you can’t be effective in eCommerce selling.

So, absolutely. I think there’s an argument that says, “Hey, if I have the same data as everyone else, aren’t I just commoditizing my product listings, and won’t it impact my Google SEO ratings? I’m just going to look like everybody else.”

Well, I will tell you, if you’re a distributor, you need to be differentiating on something other than that because that’s baseline. If you just think you’re going to put up better product descriptions than the next guy and win, maybe five years ago you could do that, but that’s going away. That’s not sustainable.

You need to differentiate based on something else: service, value. Expertise is the best way to differentiate if you’re a distributor. These are the things that you have to look at, or sell your business before it’s too late to Granger, MSC, Motion, whoever, one of the big distributors who is buying everybody.

Because frankly, just differentiating on data is not enough. So, I think what we’re seeing is a baseline that is being established with all this normalized data, and if you don’t have good data, you’re just going to slip further and further behind.

So, join AD or one of the other industry associations or one of these solutions that has good data. But don’t think you’re going to differentiate on that. This is a cost of entry and survival, I think, in this new world we’re in.

Sawyer: Yeah, no doubt about it. Earlier in our conversation, obviously, we were joking about different generations, but I recently saw a statistic that showed that 10,000 baby boomers are retiring each and every day, and a good portion of those baby boomers are business owners. I would imagine many of them are the heads, owners, presidents, CEOs of some of these mid-market distributors.

Brian: Yeah, for sure.

Sawyer: Obviously, there’s the potential of them being handed down in a family business scenario or being sold off.

But for those that are willing to stick it out and weather the storm a little longer, how would you suggest that they actually get involved with something like Amazon that you had mentioned earlier? Obviously, they should test it out and have a presence, but where do they get started?

Brian: Well, I think the business case for a manufacturer is different than a distributor for Amazon. If you’re a manufacturer with any kind of differentiated product, you need to be there. It’s that simple.

How do you start? Well, you need the expertise to help you launch. That’s why we have a business, of course, a little self-promotion there. We help manufacturers, in particular, and distributors to some degree, launch their programs on Amazon and manage them effectively so they don’t cause channel conflict.

That’s the big concern everybody has: that it’s going to undercut all my other channels, it’s going to take away business. Well, no, not if you do it right because we’re getting volume shifting there. You’re really taking back market, particularly from new Amazon-specific sellers, particularly coming out of Asia and China.

So, there’s a recapture of the market anyway. You need to have expertise, whether you’re a manufacturer or a distributor, you need to have expertise in how to manage the channel.

For a distributor, the best use cases I’ve seen are really two. One is that you can use a private label product. If you have a private label line, we have several distributors that do that where we sell their product on Amazon. That has two benefits. One, it’s got revenue and profit incrementality to it, but it’s also allowing you to learn what Amazon’s doing: their features, their functionalities, their way they behave. This is a new animal in the business, a $40 billion animal in B2B sales, Amazon Business.

So, I think for a distributor, that’s one. The other is that a lot of distributors will, we’ve been working with, well not a lot, but some will go back to their manufacturers or suppliers and say, “Hey supplier, I’ll be your Amazon division, and I’ll work with you. I’ll stock your product. I’ll respect your MAP policy, and let me be one of your authorized Amazon sellers.”

So, we’ll help distributors with that approach as well, and that has some benefits, the same sort of two benefits I just described, which are incremental revenue and learning what Amazon’s doing.

But make no mistake, if you’re a distributor, Amazon is also targeting the B2B buyer. They’re looking to take share in B2B, and where they’re taking it is in the long tail. They’re taking it, and where they’ve been so successful with $40 billion in revenue last year in B2B, is in those transactions where not a lot of consultation or expertise is required, and that is where the distributor can shine.

That’s where the smart distributor is. If I’m the next generation taking over a distribution company, I’m making sure I’m leaning into my expertise, and I’m bringing it to life digitally. I need a best-in-class eCommerce platform that will help me do this, and I need to get my data right, and everything else.

So, you need partners like you, Sawyer, to help you get there, like you guys, but that’s critical, and you have to make some investments in this stuff. There’s no avoiding it, or you’re going to lose relevance.

Sawyer: Yeah, I appreciate that and couldn’t agree more, obviously. That’s one of the many reasons why I do what I do.

This has been such an enlightening conversation, Brian. It’s always such a pleasure to have you. As I understand it, you’ve been on the podcast before, so I should have said welcome back.

But we always like to kind of leave an episode with something fun. So, instead of asking you what’s a book or a recent movie that you’d recommend to our audience, I would imagine that you’re a man of travel. So, what’s a great place that you might recommend for our audience to travel to, either domestically or internationally, that you’ve enjoyed?

Brian: Oh boy, man. There are so many places. I mean, I do a lot of travel, as you can imagine, as you do too. I travel a lot for work but also with family.

I have to say one of my most relaxing and fun places is actually Park City, Utah. I spend a lot of time out there because my family and I, we love the mountains. We like to ski. It’s wonderful. It’s a beautiful landscape and just very relaxing, not only in the winter but in the summer too. It’s really gorgeous in the fall with the leaves changing. It’s just beautiful.

We get out there probably six, seven times a year because we love it so much. So, yeah, I mean, I’d recommend that as a great place to travel to if you’re looking for some downtime, some family time.

Sawyer: I love it! I, ironically, have a trip planned there next month.

Brian: Oh yeah?

Sawyer: Yeah, we’ll be there for four days in Park City.

So, Brian, just with maybe the last minute remaining here, what are some of the cool events that you guys have coming up that you might be able to tell our audience about? Obviously, you’ve got a podcast of your own. I would love for them to know a little bit more about that as well.

Brian: Sure. So, touching on that first, Friday 15 is what we call it. Andy Hoar and I get together weekly every Friday at 9 a.m. Pacific, noon Eastern. We have a LinkedIn Live that we do, and you can also find our past episodes in podcast format on Spotify, Google, Apple, and on our website, masterb2b.com.

We talk about all kinds of issues, just like the things we’ve been talking about. We debate things. It’s intended to be 15 minutes. We usually go to 20, but anyhow, it’s a lot of fun.

In terms of events, yeah, thanks for the call out there. We run physical events all over the United States. In fact, this fall, in September and October, we have executive roundtables that we’re running in nine markets: New York, L.A., Chicago, Milwaukee, Minneapolis, Dallas, Atlanta, Denver, and several others.

These are just get-togethers in the afternoon. We talk about key issues like the ones I’m describing, the ones we talked about today, and then we have nice cocktails and dinner and just do a lot of networking. It’s about five hours. We start in the late afternoon, 4 o’clock.

You can find out more by going to our website, masterb2b.com, and just click on Events, and you’ll see the future events there, and you can register there. It’s free for practitioners to join.

So, yeah, we love to get people together and talk about these things. We’re excited to see who joins us, and you should come to one of these. You guys should get out and join us.

Sawyer: I’ll be there soon enough, I promise. I’ve definitely got my eyes on the Master Summit for next year.

We’re going to be at some distributor events, too, like MDM SHIFT in Denver. So, hopefully, we’ll be able to catch you out there in addition to the B2B Online Florida, which is, I believe, where we met for the first time.

Brian: Yeah, we’ll be there in November, and I’ve been to MDM SHIFT as well. It’s a good show.

Awesome. Well, great. Good to chat with you, Sawyer. Thanks for the opportunity to speak with you and your audience.

Sawyer: All right. Thank you so much, Brian.