- The best performing food and beverage wholesalers know that growing revenue only through new customer acquisition is not an efficient way to scale. Growing revenue by keeping low churn using up-sells, cross-sells, and expanded use is a most profitable way to scale.
- Maintaining consistent and accurate pricing across channels can be difficult and costly. If it’s not exactly the same on every channel customers may notice discrepancies between them and choose your competitors instead.
- Experimenting with prices can change up your bottom line, so it is important to keep an eye on what has the biggest impact or ROI for your business.
by Yana Persky
A recent Global Benchmark report revealed that retail distributors experience an annual revenue loss in the range of seven percent to 28 percent due to sub-par sales practices, as well as an annual margin loss in the range of three percent to 16 percent due to sub-par pricing practices.
Ninety percent of B2B buyers stated they would switch to a competitor if a supplier’s digital channel could not keep up with their needs, and 87 percent of buyers would pay more for a supplier with an excellent ecommerce portal. With the shift to digital channels, food and beverage wholesalers and distributors now have unique opportunities to reclaim lost opportunities and revenue with the right proactive measures.
Revenue & Scaling
It is time to start thinking about the bottom line. While it’s good to focus on customer acquisition, it’s easy to forget about revenue left behind on the table. The best performing food and beverage wholesalers know that growing revenue only through new customer acquisition is not an efficient way to scale. Growing revenue by keeping low churn using up-sells, cross-sells, and expanded use is a most profitable way to scale.
However, scaling in the most beneficial way is challenging when you have hundreds of thousands of products and thousands of customers. Most independent food and beverage sales representatives are quite familiar with their top ten accounts, including product categories and product ranges. They have a good grasp of their customers’ demands and can quickly tailor up-sells and cross-sells.
The other long tail of accounts, which on average generates 20 percent of revenue, is left behind. Food and beverage distributors are missing out on sales because they do not understand their customers. B2B wholesalers who lack the ability to accurately determine customer behavior often find themselves swimming in a sea of mediocrity, struggling against competitors who pay more attention to their customers’ needs. Global wholesale distributors lose three percent to 13 percent in annual revenue due to missed cross-sell opportunities, and four percent to 15 percent due to customer churn.
Sales & Customer Knowledge
Do you sell a wide range of products? Is the sales team only familiar with a few product categories? Do any of these questions ring a bell? If that is the case, you could be one of the many food and beverage wholesale distributors losing money as a result of poor sales techniques. What if you could harness a truly omnichannel B2B sales solution to understand your customers better?
You would be able to track:
- List of accounts with a drop in sales over the previous months
- Accounts that are below average
- Abandoned carts
- Average order size per channel
- Average order size per product category
- Product categories per customer/per segment
- Frequently bought items
- Financial progress of a specific buyer
- Buyer report for representatives
It’s a good start to improve your business. Dealing with disorganized pricing data impacts your profits and loss. To understand pricing better, ask yourself these questions:
- How many times have you said “Nn” to various B2B ecommerce vendors that were not able to accommodate your complex pricing structure, promotions and surcharges which are calculated in the backend of your ERP?
- How many times have you wondered if a shortlisted B2B ecommerce platform is capable of supporting these custom prices/charges?
- How can you make sure that the prices provided to customers in offline settings correspond to the prices displayed on an ecommerce platform, and that each customer receives the correct pricing information based on their individual contracts?
For any wholesale distributor, pricing is crucial. Pricing for customer groups and purchasing groups can be a very difficult task as they are determined by a range of elements, including order frequency, urgency, product categories, payment and delivery conditions, warranty, and purchase quantity. And they become even more difficult to set as the number of SKUs grows.
A typical buyer may have many contracts and orders, which complicates the pricing calculation. This requires the inclusion of other variables such as volume-based discounts. When a customer with multiple contracts places an order, the system must also know which contract to reference. Buyers are expecting to see their contractually defined prices when they log into their B2B self-service portal. Complex pricing is typically what keeps food and beverage wholesalers from adopting B2B ecommerce.
Competition may force you to adjust prices at any moment to remain competitive, but without a solution that syncs the price changes happening across your many channels, you could easily miss one or more prices while updating them all individually. Maintaining consistent and accurate pricing across channels can be difficult and costly. If it’s not exactly the same on every channel customers may notice discrepancies between them and choose your competitors instead.
Managing Complex Pricing & Promotions
The key to managing pricing complexity across all channels and maximizing your profit margins is having a B2B ecommerce solution that can handle all of your needs so you can focus on what matters the most for both your company and clients. Here are some tips on how to do just that:
- Group your customers according to their price point or tier so they can be charged differently depending on which group they fall under.
- Include the same product at several different price points and create customized versions of each catalog depending on what kind of client wants it.
- Automate discounts by setting them up at various levels such as individual items, accounts, brands, etc. If possible, use business rules set up specifically for your company.
- Set prices based on volume or quantity.
- Use multiple currencies.
Flexible pricing options allow for innovation and experimentation, especially in B2B ecommerce. A transparent, single source of truth is key to digital commerce success and is necessary when food and beverage distributors create an enterprise solution with B2B buyers. Experimenting with prices can change up your bottom line, so it is important to keep an eye on what has the biggest impact or ROI for your business.
Gaining relevant insights and dealing with unstructured pricing data across multiple channels may seem daunting at first, but it will help reclaim lost opportunities by preventing B2B buyers from switching suppliers and enhancing overall business growth.
Yana Persky is Head of Product Marketing for Pepperi. She is a seasoned marketing professional with over 20 years of experience in the hi-tech and software industry. An expert in leading in-depth strategic market analysis, evaluating worldwide technology trends, and understanding the competitive market to support new strategic leads and business opportunities.