Opening Note By Karthik Chidambaram, Founder & CEO at DCKAP

1) A great start with a brief introduction about the DCKAP eSummit by Timothy Diep, Customer Success Manager at DCKAP (00:00-02:25)

Good morning everybody. Hopefully you guys are all doing well and staying safe out there. We’re very excited to have you guys at our DCKAP eSummit 2020 B2B edition. We have lots of great content today. We’re going to be having a lot of excellent speakers to really help you with your B2B eCommerce business and some of the things for you to scale up.

So, lots of great content and it’s going to be a long one. It’s going to be about five hours. So take your time, pace yourself and we have lots of great giveaways too just to kind of lighten up the mood and everything. Definitely excited to have you guys all here. This is definitely a record number that we have.

We have over 300 registrants for this one. Probably over 70 to 80 different merchants, distributors, and manufacturers. And if you are a distributor, manufacturer, or a wholesaler, do let us know your address because we are going to be giving away lots of free stuff. We have a swag box that’s ready to be shipped out to you guys post the event.

We even have raffles during the event too. So lots of great things. And, hopefully you guys are able to enjoy all this. And a quick shout out to all of our sponsors, our platinum sponsor is BigCommerce. They are the ones to sponsor the networking event. If you weren’t able to join the pre-networking events, we also will have another one post event as well.

We also have gold sponsors- Gorgias, Avalara, and APS Payments. And silver sponsors are Dotdigital, PunchOut2Go, ShipStation, Metacake, and Cloras. Thank you to the sponsors for making this happen. Next I’d like to bring up Karthik Chidambaram. He’s the CEO and Founder at DCKAP.

He started this company with the willingness, with a lot of technology and innovation. He’ll tell you a little bit about our story, the story of DCKAP and how we’ve evolved, especially with kind of transitioning with culture in terms of Erin Meyer’s talk today.

So, definitely excited to bring Karthik Chidambaram, the Founder and CEO at DCKAP to the stage. And he’ll have the opening note for today.

2) A warm opening note by Karthik Chidambaram, Founder & CEO at DCKAP (02:26-04:07)

Vanakkam. Good morning, Bon Jor, Buenos días. We hope you and your loved ones are staying safe and staying healthy. We are very excited to be hosting the DCKAP eSummit. We would like to thank you for joining the DCKAP eSummit.

Last year, around the same time, we had the DCKAP summit at the Sheraton Grand in Los Angeles, California. We had originally planned this year’s summit at the Marriott in Los Angeles. However, here we are, doing this virtually. The good news is we have people from across the world who have joined us. We had a record number of 300 registrations to this event.

We would like to welcome you all to the DCKAP eSummit.

Today is a very special day for me personally. That’s me and my wife Chithra, and we got married on the 10th of November. Today is my wedding anniversary. And it so happened that the DCKAP eSummit is also happening at the same time. I’m thankful to my wife Chithra and I’m very grateful to her as well.

3) Let’s listen to the story of DCKAP (04:08-07:12)

I grew up in Chennai and did my masters at Illinois Institute of Technology in Chicago. We started out of a small apartment in Chicago. And then we had very humble beginnings. DCKAP was bootstrapped with two desks, two computers, and two people. Here we are, as a global team. When we started the company, we really did not know what we were doing. We did anything and everything that came our way. This really helped us shape who we are today.

Starting with two desks, two computers, and two people and making a lot of mistakes teaches you a lot of things. In the early days, you come and ask us, ‘Hey, we want to build a game.’ We will be like, ‘Sure, we will do it’. The next day you come and ask us, ‘We need something built in Java’, we will be like, ‘Sure, we will do it’, ‘.Net, we will do it’. We also did staff augmentation for a little bit. Few years into running the company, we realized that doing anything and everything is not a good strategy and being niche really helps, especially when you are getting started.

Around 2012, we took a close look at our business. Because of the mistakes we made, it was like a roller coaster ride. We did very well. Went up and went down. Went up and went down. We asked ourselves, ‘What is this happening? Why are we not able to provide a consistent performance?’ We understood that we were doing too many things.

And at that time, the majority of our business was generated via eCommerce tech. That’s when we decided let’s not do everything, let us focus on eCommerce and let us do that really well. That was a big learning for us. Another big learning for us as a team was culture. We strongly believe that culture plays an important role in the transformation of a company.

Even though we decided that eCommerce tech and digital transformation tech was a way forward, what really helped us execute is culture. We almost doubled in size in the last one year. Why are we able to execute this now and not five years ago? We understood that culture is the answer to the question.

4) Culture-The all-important factor (07:14-08:50)

Let me share a personal story with you and a mistake I made. I used to have a private office and it was a very nice office. And every time somebody needed to talk to me, they had to come to my office. I had visitors visit me in my nice private office. I was under the wrong impression that CEOs needed to have their own private offices.

I read this great book, ‘How Google Works’ by Eric Smith and Jonathan Rosenberg. This book provided us with a lot of insights. It changed our perspective on how we looked at things and how we collaborated. In the book, they also talk about crowded offices, which may not work well during the current pandemic.

However, we certainly took significant lessons from it. We asked everyone in the company to read the book as well. And one of the first things I did after reading the book is giving up my private office and I started sitting on the floor along with the rest of the team. This is the right thing to do. I was also able to learn a lot working with the different members of the team, and it was a terrific experience.

I only wish I had done it sooner. Culture really helped us in our transformation.

5) Make way for the new normal (09:00-12:15)

One of the things we did at DCKAP prior to the lockdowns and shutdowns, when we learnt about the news on COVID is we ran an experiment. We said let’s all work from home for a week. At that point in time, honestly, we did not know that this pandemic was going to last this long. However, because of culture and our wonderful team, we were able to adapt.

Our team was agile. All of them already had laptops and there were not a lot of external investments we had to do. In fact, our costs have reduced a bit for now. Hopefully, by 2021 things will get back on track. However, when things get back to normal, there are going to be a lot of new normals. What does this mean for your business?

What is the new normal for distributors? We work with a lot of distributors and we launched a good number of sites during March of 2020. This really helped with the digital transformation of distributors. You like it or not, eCommerce is the new norm. It enables more buyers to buy from you. And it also acts as a great catalyst.

It’s also a great sales channel. So it is extremely important that you invest in eCommerce and be prepared for the new normal. Technology is just an enabler. We have talked about this in the past. Let’s say you implement BigCommerce, Magento, Shopify or Evolution X. It does not mean that your sales are going to transform overnight.

What these platforms do is that they are just enablers to help transform your business and also act as a sales channel. Your fundamentals have to be strong. You have to have a great product. Even if you do not have a great tech, a great product will go a long way. You will have to provide a consistent, low effort experience to your customers.

We feel fortunate to be working in tech and we strongly believe that distributors can scale better by leveraging tech, leveraging eCommerce, culture, and also adapting to the new norm.

6) A brief note about the products offered at DCKAP (12:20-16:10)

We are very excited about our integration platform, Cloras.

It integrates your ERPs like DDI. DDI has been a great partner for DCKAP, and we want to thank you DDI. Thank you, Adam. Cloras integrates with platforms like DDI, Prophet 21, Epicor Prophet 21, Epicor eclipse, Oracle, and SAP with your eCommerce platforms like Magento, Shopify, BigCommerce, or integrate with CRMs like Salesforce. It can also integrate with marketing automation platform HubSpot or pretty much integrate any two different systems.

Cloras is platform agnostic. Anytime you think about integration, you think about Cloras. In less than 18 months, we have over 50 enterprise and B2B customers on the platform. It is also the market leader in the Epicor and Prophet 21 ecosystem. And we are beginning to disrupt. I want to say a big thank you to the entire team behind Cloras and you make us proud and we are super excited about what’s in store.

We want to do more. We looked at an adjacent market and the problem areas for B2B distributors, manufacturers, and eCommerce in general. One of the biggest pain points is managing product content from different sources, updating product images and providing a consistent low effort experience to your customers.

Product information management and content, we believe are low hanging fruits to provide a low effort experience to your customers. We launched flexiPIM, a flexible PIM. We are excited about its growth. It also integrates with different eCommerce platforms like Magento, Shopify, BigCommerce, and it also integrates with
Epicor Prophet 21 ERP and more. You can sign up for free at

Amidst this pandemic, our team was working on a visual analytics platform. We asked ourselves, will we be able to launch a new product during these times? However, our team was able to pull it off. VIZB is available in the big commerce marketplace. And it integrates with BigCommerce. It also integrates with Magento and Shopify.

We are working on the Prophet 21 integration. Looking back, one of the reasons why we were able to launch the product during these difficult times, again, it boils down to culture and the spirit of our team. Thank you.

7) A shout-out to our sponsors (16:12-17:28)

We want to say a big thank you to our sponsors who have made this event possible. We want to thank BigCommerce who’s a platinum sponsor to the DCKAP eSummit. BigCommerce team, we love you. You have been great partners and congratulations on your recent IPO. We would also like to thank Gorgias, the customer support platform, Avalara, the best in class tax solution, APS Payments, a great solution for the payment needs.

And we also want to thank Dotdigital, the marketing automation platform. Punch outs are a great challenge and a big need in the B2B industry and PunchOut2Go offers a great solution, and it’s great to be partnering with you, PunchOut2Go. Thank you for sponsoring the event. We would also like to thank ShipStation. ShipStation, you have been a great partner. You solve a lot of problems and thank you. And we would also like to thank Metacake, one of the fastest growing agencies in the Midwest.

8) DCKAP- The ecosystem with a thriving community (17:34-18:44)

If there is one thing we had learnt in the last two or three years, it is that great companies are built on a great ecosystem and great companies are built on a great community. Internally at DCKAP, we do not call ourselves a company.

We refer to DCKAP as a community and we refer to DCKAP as an ecosystem. We are working hard to be a truly vibrant community. And we would like to welcome you to join the DCKAP community and the DCKAP ecosystem. We have an amazing list of partners we work with and it’s growing every day. We have a great number of developers who are a part of the community, and we have amazing and talented community members.

Thank you for the entire DCKAP community. You mean a lot to us.

9) Introducing Erin Meyer (18:45-21:03)

With that I want to say thank you, Nandri (Thank you). We would like to thank you all for joining us in this virtual edition of the DCKAP Summit. We have a great lineup of speakers from different industries. Nandri. Thank you for coming and thank you again. And one thing we thought that would benefit distributors is learning more about culture.

I recently read this book ‘No Rules Rules: The Culture of Netflix’, written by Reed Hastings and co-authored by Erin Meyer. After reading this book, I got fascinated. Culture is something that would benefit B2B distributors, manufacturers and everyone. We thought it would be awesome if Erin joined us for the DCKAP eSummit. We are fortunate that Erin is joining us today and going to be talking to all of us.

Erin is also the author of the bestseller, ‘The Culture Map’. Erin was recognized by the Thinkers 50 as one of the 50 most influential business writers in the world. Erin was also recognized as the top 30 most influential HR thinkers or business leaders. She lives in France. She’s a professor at the INSEAD Business School and Erin was very kind and generous with her time.

It has been a great experience in working with Erin in prep to the conference. Who is better to talk about culture than Erin Meyer. Erin, Vaanga in Tamil, my mother tongue means welcome in English. Vaanga to the DCKAP eSummit. Welcome to the DCKAP eSummit. We are super excited to have you join us and with no further ado over to you, Erin.

Erin Meyer No Rules Rules Transcription

Erin Meyer Session kickoff (00:00-01:14)

It’s very nice to be here with you today or to not be with you, but be with you in spirit. So, I really enjoyed hearing Karthik. Thank you very much. And it’s a pleasure to be here with your audience. as Karthik said, my name is Erin. I’m a professor at a business school called INSEAD, which is outside of Paris.

I studied culture in the workplace. My first book, the culture map was all about national cultural differences. But, we’re not going to be talking about that today. We are going to be talking about how to create an organizational culture or a team culture that will breed innovation and flexibility.

Starting the session (01:14-01:45)

I want to try to do something interactive with you. And throughout this session, several times, I’m going to stop and ask every one of you to all of you on the line to chat something into the chat box. Okay.

So please do open up your chatbox. Be ready to be interactive. I’m hoping that I will hear from all of you very soon there. Okay. Now I’m going to go ahead and, and share my screen here with you. Okay. All right. So, this book, as Cardi said, I just released a book that I wrote with Reed Hastings about a very strange and interesting topic.

Culture at Netflix (01:43-03:43)

Yeah. Culture at Netflix. And I was specifically interested in this culture because I mean, many of, you know, Netflix as consumers, but I was particularly interested in this company because Netflix has been able to do something that is extremely rare. So, what they’ve been able to do is to reinvent themselves again and again, in a rather short period of time, they’ve reinvented themselves multiple times in the last 15 years.

And I think this is relevant to you because in these, these strange days of COVID, I know many organizations are trying to think about how to reinvent themselves. So if we think about Netflix, When they started out, as you may know, if you’re in the US as a DVD by mail company, right? So they had warehouses around the US and they were putting these DVDs into the post office, into the post, and sending them out to their clients.

Then of course, the environment shifted, and they were required to reinvent themselves as a streaming company, right. As a streaming company- streaming their products all over. All over the world. I’m sorry. I just have to do a reshare here. I realize I’m having a little problem.

Everything will be fine. Okay. So they reinvented themselves as a streaming company, restraining, an old TV show and movie. Right. But then the environment shifted and they found out that they had to reinvent themselves again, this time as a media company, opening their own studio, competing with Disney, hiring their own actors and their own directors.

Right. And this level of flexibility is incredibly rare in a company. Right? This ability to kind of like innovate continually as the environment shifts. So, um, it was because of that, that I got interested in Netflix. And I ended up doing this research project on Netflix. I interviewed a couple of hundred people in the company.

Collaborating with Reed Hastings on the corporate culture (03:45-05:50)

And then I wrote this book that just came out a few weeks ago, uh, with Reed Hastings about their corporate culture there. So I wanted to talk with you today about some of the learnings that I had working with that company that I thought might be relevant to you in your organization. And in order to get this.

I started, let me say that, I know that many of you probably have already heard about Netflix corporate culture because in some ways it’s been quite famous for its strangeness. It had, you know, some of you are aware of it because you came across perhaps the infamous, uh, Netflix culture deck, which is a set of 125 slides.

This was released onto the internet several years ago, those slides have been downloaded over 20 million at times. So they got a lot of interest. And if you have seen those slides, then you are aware that they start out something like this, right? So, the first slide starts by saying many companies have nice sounding value statements displayed in their lobby, such as integrity.

Communication respect and excellence, right? Maybe you even know some companies who have those very words as their corporate values. Then the second slide goes on to say, of course, Enron whose leaders went to jail, which went bankrupt from fraud. Had these exact values displayed in their lobbies.

Now that brings me to the first point I wanted to make, as we start our journey of exploration of how to create an innovative organizational culture. And that is that when you are working on defining your corporate culture, right? You’re trying to think about how you can articulate an organizational culture that actually takes root in the organization?

Her learnings and how to set up your corporate culture (05:51-07:25)

The first thing that I learned working with Netflix is don’t speak in absolute positives when you define your corporate culture. Right? And when I meet my bad is like, if you look at this word, integrity, Right. Okay. So, I mean, what would be the go-to option to integrity? There’s no good option, right? I mean, like the option two integrity is we could have integrity or maybe we could value integrity, or maybe we can value corruption.

Right. And I don’t think anyone would say any organization would say we value corruption. So, in speaking in that absolute value, it doesn’t guide our employees. Right. What I saw was that the reason that Netflix had been able to articulate a corporate culture that then took root and grew in the organization was that instead of speaking and let’s say positive dreams, they looked at the difficult dilemmas that their employees were facing on a daily basis.

And they told their employees when you come across a dilemma like this attention like this goes this direction, not this direction. Okay. Now I’m going to give you some examples, and this is where we’re going to start the interactive piece of this session. So could you all, please, all of you, every one of you, could you please open up your chat box and put your fingers on your keyboards, because you’re going to have to vote.

Getting started on the dilemmas (07:25-10:46)

I’m going to have your vote in your answer to what you would do based on this situation. Okay. So here’s, here’s the dilemma. Okay, we’re going to do several dilemmas today. Okay. Here’s the first dilemma. The first dilemma is that you are the director of manufacturing in your organization. And as the director of manufacturing, you oversee a number of manufacturing plants.

Let’s say you oversee three manufacturing, plants, and things are going well in all of those plans, but recently in the last week, you have been in discussions with your boss about a possible organizational structure, a possible organizational restructuring. And if this takes place, it will mean that you need to merge two of your manufacturing plants, which will create a huge amount of change right now.

If this happens, it will happen in about five months. Okay. And if it happens, it’s going to impact your employees a lot. Now you have a dilemma. Okay. Your dilemma is, are you going to tell the six managers in the plant? Who would be impacted by this restructuring? So your dilemma is, and I need everyone please to type in either A or B.

Okay. Don’t be shy. Go ahead and type in an answer. I can go there. Okay. So the question is
A) would you tell them because you feel it would be important to be transparent with them, in order to build their sense of trust?

Or B, would you feel that maybe you should wait and tell them when things are a little bit more certain because geez, there’s only a 50% chance you could, that this change is going to happen.

And if it doesn’t happen, people might leave the company they might get, you know, a lot of panic of anxiety in the organization. What are you going to do? Okay. Now I see it already. It’s very interesting because as I started explaining, Hey, you were all saying, Hey, but then when I started explaining, a lot of you started putting him to be too right.

And the reason that we have a lot of A’s and also now a lot of BS is that this is a real dilemma, right? Of course, you all want to be transparent with your teams. What didn’t want organizational transparency? Of course, you all want to. Workplace stability who would want to upset their workforce for nothing.

Right. So here we go. We’ve got a lot of A’s and B’s and we have, um, at least one who was coming in with an A. Okay. We always have new demands. Thank you, Rachel. Okay. Um, but there we go. So, um, this is the point, the first point that I wanted to make is that these are the kind of organizational, the kind of dilemma that your manager’s experience on a day to day or at least weekly basis.

Transparency at the workplace (10:47-15:33)

Should I value transparency or should I keep them feeling comfortable? Should I value workplace stability? These critical dilemmas. If we identify for our employees, which way to turn now, we start to really mold the organizational culture of the group.

So you did great. Now, we’re going to do number two. Now I will tell you if you are familiar with Netflix, you know, Netflix chooses transparency. So they agreed with that big run of AEs that you started with it. They believe that even if it ups. Lots of people in the workforce, even as people end up leaving the company, it’s better to focus on being transparent in order to breed that sense of trust with their employees.

Okay. But I don’t want to make a point about that. Now, the only point I want to make now speaks in dilemmas, not in absolute positives. Okay. Now that brings me to a dilemma. Number two. All right. Just to keep us to keep the ball rolling here. Let’s see how we do on this one. Okay. Here’s the deal.

You are overseeing the e-commerce platform for your organization. Okay. And you have a group of e-commerce specialists that are working for you. Now one day, one of these specialists who is a woman named Sheila comes to your office and she is looking really excited. She comes into the office and she says to the boss, I got to tell you, I had this idea in the night.

About how to move our platform forward. I really think it’s gonna lead to big rewards right now. She tells you about the idea and she says, you know what, boss? I know it’s going to be expensive. Right. It’s going to cost a lot of money. I know that. And I know it’s going to take a lot of time and I’m going to have to drop some of the other projects that I’m working on to work on this, but I really think it’s going to be good for the company.

You know, what do you think right now? You love Sheila’s enthusiasm and you love that passion. The problem is that you feel pretty clear that that is not a good idea. I mean, from your perspective, this is clearly not going to work out. Right. So you say to Sheila, thank you for your enthusiasm, right?

You tell her, you know, I love you coming in with all of these ideas, but I have some concerns. And you tell her then what your concerns are? You know, please think about this for a week. I don’t think about it more either. Let’s come back together next week. So Sheila goes home and you go home next week.

You come back together and when Sheila comes back, she says to you, boss, I’ve thought about it. All week long, I can’t sleep. I’m so excited. She said I know you have some concerns. I thought about the concerns here were my thoughts, but you know, I really think this is going to work right now.

Again, the more she talks, the more you think it’s going to fail. So my question for you is what are you going to do? Right? Are you gonna let her abandon some of her other projects and invest this money in this project, even though you, as the boss really feels it’s not going to work out. So A orB yes.

You’re going to work on your, you want your, you wanted to work on it. You’re going to say, go ahead, because you want her to feel empowered, to invest in projects she believes in, or know why throw time and money into a project that you think will fail. Okay. I see we started out already with a little bit more of a dilemma at this time.

Okay. We started out with a couple of A’s and B’s okay. Rachel tells us neither. Thank you for HL. It’s always good to have a little bit of really thoughtful, thoughtful responses. Okay. A couple of it depends, but overall, we can see that we have, do you see it? Do you see what a dilemma we have? I mean, literally I think we have 50% of you, maybe 60% of you saying, Hey, you’d let her work on it.

And another 40% of you, or maybe now we’re going up to 70%, another 30% of you, who’s saying be no, why would I throw time and money into a project? I think we’ll fail. Okay. So here again is a real dilemma. And this is a dilemma that we need to think about in our companies, right? Because the dilemma is what do we value?

Innovation or error prevention: Million dollar question (15:34-18:25)

Do we value innovation or do we value error prevention or maybe in part of our organization, we value innovation. And in part of our, of our, our, uh, organization, we value error prevention, but you can’t value both at the same time because these two things are in contradiction to one another. And what I mean about that is that I think we all know that innovation comes.

From trying out a lot of different things. Right. And some of them failed and some of them worked out. Right. Okay. So here again, we need to think about, you know, what are the real tensions, what are the real dilemmas that our employees are facing? And tell them when you come across this dilemma, go this way.

Right. Okay. Um, now I think you, you probably are not surprised to hear that Netflix highly, uh, is focused on innovation over error prevention, but we will come back to that later. Okay. We’re going to come back to Sheila later on in the presentation for now. Please just remember. Uh, for now, please just keep in mind the first point, which is that when you talk about the types of organizational or team culture that you would like to have, please don’t say let’s value judgment.

Let’s value, respect. Because from, from my perspective, there’s, there’s no real good option. I mean, maybe you can think of something, but I couldn’t. Right. Like what would be good. The dilemma that judgment would be intentioned with what would be the opposite. All I could think of was lack of judgment and no organization would say, they valued lack of judgment, right?

Or what is respect? What’s the good option to respect when there’s no good option from what I can see, right. Oh, sorry. It’s disrespect, right? I mean, maybe you’ll come up with something, maybe you’re cleverer than I am, but I couldn’t think of anything. Right. In any case, if you can’t think if you can’t.

Um, if you don’t recognize what value you are articulating and how it’s the intention with another value, then don’t speak in these, these absolute positive, save your breath, save your breath for those really critical dilemmas where it really it’s really important to say we should go this way or that way.

Okay. So, now that we have determined that – thank you for your excellent participation. Now that we’ve determined that the second question is if your goal is to create an organizational or team culture that breeds innovation and flexibility, what would be the key dilemmas or the key tensions that you would want to focus on articulating?

Reed’s first experience: Growing from there (18:26-20:24)

And in order to answer that question, I’m going to tell you a story. So the first time that I interviewed, Reed Hastings of Netflix. He told me a story about his first company, which was an organization called peer software. Here, you can see Reed in this photo. He’s a very young man. It’s in 1996 and he is in Silicon Valley.

Right? Okay. So when Reed started up a pure software, it was very entrepreneurial. Accompany at the beginning. And what I mean by that was they were just a small group of people working, let’s say, fast and loose. So they didn’t have any rules or policies or processes that were, that were controlling the way they worked.

They were all just using their best judgment to make the best decisions that they could for the good of the company. But then pure software started to grow. It grew, 200 people to a thousand people. As the company grew, some people did stupid stuff. And some people took advantage of the freedom that had been allotted to them.

For example, there was this guy named Jim who used to take an airplane every week from San Francisco to Los Angeles. Because there was no travel policy and there was no one watching or approving, needing to approve the way he traveled. He started buying first-class plane tickets every week. Right?

Why not? He was more comfortable. Now when Reed found out he was really frustrated. I mean, the company didn’t have much money, right? So he and Patty McCord, the head of human resources sat down, and together, they created it. Detailed travel policy, right? Telling people exactly how they could travel, you know, when they could travel, what way, what kind of hotels they could stay in the whole gamut.

Stopping innovation (20:25-23:11)

Right? Another example, there was a woman named Charlotte and she used to bring her dog to work every day. One day that dog chewed a big hole in the carpet root in the carpet of a conference room. Reed was really frustrated that the carpet had been. Expensive. And it was expensive to replace. So they created a policy, no pets at work right now as the company grew and more policies and processes started to take root.

Something else happened, which is that the company stopped. Innovating. And as that happened, they had to purchase other companies that were innovating, which created more complexity, which led to more rules and processes. Okay. Now I have a short video of Reed talking about this and I really have my fingers crossed that it’s going to work for you.

Okay. Now we also have it on, on a link. So if it doesn’t work for you, we can chat with you later, but let’s go ahead. I’m gonna just do my best here, and maybe, some of you can chat in if you could hear it. Okay. Here we go. It’s only a minute and 20 seconds and if the lips aren’t safe, don’t worry.

It doesn’t matter. You know, the great thing about being able to do two companies in my life is not making the same mistakes. So in the first company, as we grew and went public, we put in. Excuse me for a lot of the process because we had the idea. If we could just eliminate errors, think how good we can be.

And so every time something went wrong, we put in a new process and we were so proud that we dummy-proof the system. What we didn’t realize is if you dummy-proof, the system only dummies one to work it’s there. So then the market changed all of the kind of innovative, crazy thinkers had gone.

And everybody was still, there was really good about following the rules, but the market, it had shifted. This was the rise of Java and the internet. And we were unable as a company to adapt. And that’s when it hit for me. Short-term optimization about being efficient is the death of long-term success and innovation.

And that we should build a company in Netflix, the tolerated, some short term chaos. And we manage right on the edge of chaos and the value of that is keeping and stimulating the amazing thinkers. So when the market shifts like DVD to streaming or license to expand to original content, we have within Netflix, all kinds of original thinkers and that’s the long-term optimization, but all of us in organizations want.

Employees freedom and flexibility (23:12-27:09)

Okay. Great. So it sounds like most of you were able to hear that now. What Reed’s main learning is, right? His key learning after this experience with peer software, he sold the company. Right. And his key learning was this key learning was okay. Employee freedom, breeds, innovation. Right. And the process kills flexibility.

So his hope with Netflix was that he could create an, when he started his next company, right. Netflix was that he could create an organization that as it grew avoided rules and processes, right. They continue to have that improve employee freedom so that people could, would continue to innovate and be flexible.

Now, that being said, He also had a big challenge that was in his mind, right? Like he understood that this was his goal to create an organization with employee freedom and flexibility. But he also recognized that as the company got bigger and as complexity increased, if he didn’t put rules, rules, and processes in place, the organization was likely to descend into mayhem.

Right. So, not to hover on the edge of chaos, but to fall into chaos. Right. So he thought a lot, about it. And he came up with what we will call the Netflix experiment so that his experiment, right. The Netflix experiment had three parts to it. And the first part was in most companies, most of the rules and processes are put in place to deal with the kind of not so amazing employees, right?

The most amazing employees. They don’t need a lot of rules or processes. They do fine without it. So what if with Netflix, we work to create an organization that was made up. Only have amazing employees. Right? What if we focused on just having the best employees so we could give them more freedom? Right, which would lead to more innovation and more flexibility.

Now that would be fine, but still, there are maybe some of these amazing employees that choose to take advantage of the freedom that is allotted to them. So what if in that case, we also create, uh, a culture. Uh, candor, we’re employees are getting one another, a lot of candid feedback, right? Just every day, we’re all giving one, another, a lot of feedback.

Now, if this happened, then when someone started to take advantage of the freedom allotted to them, others would say, Hey, you know, I don’t think that that’s a good idea. I don’t think that’s the right thing to do for the company. Right. And that candor would create. You know, a safety net and also all that feedback would push the performance up higher, which would then lead to more talent density, which would lead for me to be able to give more freedom.

Right. Okay. So the experiment, what if we had talent density and then we had candor and then we try to give our employees huge amounts of freedom, right? No rules or processes. That was the Netflix experiment. Now of course we can see it has worked out for them, but I would like to discuss in detail whether any of the crazy things they’re doing at Netflix might be interesting for you.

Okay. So what I want to do in the next half an hour or so goes through each of these three points one at a time. Okay.

First, we’ll talk about talent density, then we’ll talk about candor and then we’ll talk about removing controls. All right, now, before we get, in order to start that process, we have to go to dilemma number three.

Importance of talent density (27:10-35:19)

So here’s your next dilemma? I hope everyone’s still got their fingers, right? This, we’ll see. Let’s see what you’re like. So here’s the dilemma. The dilemma is that you are overseeing the production design department of your organization. And on your team, you have eight production designs or sorry, product designs.

You have eight product design specialists right now. You have been very focused on creating a high-performance work environment. You were very careful to hire. Only the best product designers. Right? And you paid them top of the market to get the very best. Now a year into it. Seven of your eight product designers are amazing.

I mean, those seven, if you went out onto the market and tried to find somebody better, you could they’re the best. Right. Then there’s Fritz. Now a Fritz, Fritz is a nice guy. He’s a great guy. Right? Um, but Fritz, he just is not amazing. Like your other employees it is fine. Okay. Fritz does his work. He’s fine.

Right now the issue is if Fritz were clearly a poor performer, you w you would have gotten rid of him, but he does his work. You know, it kind of meets our deliverables. Now, on the one hand, you knew, you know, that if you went out on the market, And look for a replacement for Fritz. Clearly, you could find somebody better, right?

And in addition, you have given Fritz a lot of candid feedback over many months, and it doesn’t seem like he’s going to be able to boost his performance up against any higher. Now, on the other hand, Fritz is a really nice guy and he works really hard. My question for you what are you going to do with Fritz?

Are you going to fire him or are you going to keep him on the team, Rachel? No, it depends. Let me see what you’re like. Oh my gosh. You are so tough. Look at these A’s coming in. Okay. There we go. A couple of BS. Thank you, Ryan. I was getting worried about the cutthroat nature of our team.

Okay. All right. So we have a lot of A’s and we also have a lot of beeps. Right. Probably we have more A’s and B’s, but maybe two-thirds one-third now. David would like to put in a little bit of it depends. He wants to make sure that we’ve given Fritz, you know, really the best, the best help he can have and Mohan is unsure.

Okay. But thanks for voting any counts. Okay, great. So as we can see. Actually, I think more than the last two, this is really a dilemma, right? I mean, we can really see that you guys have different opinions about this, and this is the kind of thing that really in our companies, it would be good to help our employees, our managers think about, what should they do when they get to this kind of dilemma?

Because I bet that most of you have at some times or another come across this type of situation. Right. What I want to tell you what I want to tell the bees, um, all these lovely bees. I want to tell you that Reed agreed with you when he started Netflix. So on the one hand, he wanted to create a high performance work environment.

That was his main goal. But on the other hand, he believed. And in poor performers, he would fire them. Right. But he believed that accompanists should be like a family. Right. And as a family, he should, you know, protect and mentor and take care of his medium employees and in doing so, he then received loyalty from those in the organization.

He also believed that, um, the, those. He also, I forgot what else he believes. He also believed that if he started firing medium employees, that it might really upset the excellent employees. Right. Okay. So, move forward. Oh, that was the other thing he believed. He believed that in every work environment, you always have some medium employees and some excellent ones.

That was just the way business worked. Right. Okay. Now, um, that, uh, Netflix started in 1997 and that it was like that up in 2000 until September of 2001. Then in the fall of 2001, uh, Netflix had grown to 120 employees. And as many of you know, I mean, obviously, then there was this financial crisis right now.

In the fall of 2001, Netflix was doing fine. They were doing, just fine. Okay. The atmosphere around the office was okay. Right. Those 120 employees, they were all busy, but then Reed found out because of the financial crisis that he was going to have to lay off. A bunch of employees.

In fact, he was going to have to lay off one-third of the workforce, right? Uh, 40 of those 120 employees, he was going to have to lay off. And he was very concerned. He was concerned about what was going to happen at the company after the layoffs, those 120 people were already so busy after he laid off 40 of their colleagues, they were going to be bitter and they were going to be exhausted was his assumption, but he didn’t have a choice.

He did the layoffs, right? And the day of the layoffs, it was as expected. He cried and screamed and slammed doors, right. Just as expected. But within a couple of weeks, something very strange and surprising started to happen, which was that those 120 employees started to accomplish as much as the 80 employees had been accomplishing before them.

And within three months, something that shocked readers happened, which was those 80 employees were accomplishing more than the 120 employees had been accomplishing before them. But better than that, the atmosphere in the office had improved dramatically. Right. So suddenly the company, Netflix, seemed to be full of employees who were madly in love with their work and these people, it seemed like they just were passionate and excited and they were getting so much done.

So he and Patty McCord, the head of HR, tried to figure out what had happened here and the conclusion that they came up with. Was that this had happened because they had fired the people they had laid off were the 40, less desirable employees in the workforce. Right. And those who were left where they’re really top players and their conclusion was for really high performing employees, the best.

The best work environment is not about having, you know, beautiful offices or fancy gyms or nice lunches. It’s about being surrounded by other stunning employees, right? So that’s when they started to say a great workplace is stunning colleagues. Now I want to tell you that this is not just a lesson from Netflix.

There is a huge amount of research that proves Reed’s point. Performance is contagious. Okay. So in order to get us thinking about that, I’m going to tell you about, um, a piece of research that was conducted by another organizational behavior professor, a colleague of mine at another business school.

Performance is contagious (35:20-41:02)

His name was William Phelps. The research project that William Phelps did was that he invited us. For MBA students into his lab at a time. Right. And he gave those four MBA students, a task and a 45-minute task. And he rewarded them financially based on how well they performed right now, unbeknownst to them on half of the teams, there was an interloper.

So the interloper was this actor who had been hired by William Phelps to pretend that he was a regular MBA student but to behave in a way that was a little bit undesirable. Right. So sometimes, the actor, what on these teams during the task, sometimes he would do things like act a little bit bored.

Like he might kind of lean back and start texting his friends, acting as he’d rather be anywhere else. Right. And sometimes Nick would act a little bit jerky. So he might say, things like, you know, have you ever even attended a business school class before? Right now, what was amazing is not okay. The first part is interesting, the first part, but not the most interesting, the first part was that Will Phelps saw in study after study team, that the teams that had Nick on them performed worse.

Even when the other three MBA students were all stunning, pre head B performed worse at a 45% rate of lower. Right. Okay. Not only that, what’s the most interesting was that the other people on the unmixed team started to take on his behaviors and behave a little bit like him. Now I have a short audio clip of the will of professor William Phelps talking about the research talking about what he found.

So again, I hope you’ll be able to hear this. There’s no video. There’s only audio and it’s only 40 seconds long. Okay. Here we go. Here’s William Phelps. So what was sort of eerily surprising was how these. Team members would start to sort of pick on his characteristics. So for example, I mean, we remember we videotaped all of these and you would see that people would start, what was it that they would be a jerk too.

Right? So they would start being a little bit insulting or abrasive or obnoxious and what it was really interesting as they wouldn’t just do it sort of in response to him, but also to each other. Right. So there’s sort of a, like a spillover effect. And it’s really interesting because you could actually watch these videotapes that William Phelps made.

And there’s one of them where you see. The MBA students come in, right? The three and then Nick, the actor and those three, they’re really excited. Right. They’re energized to take on this new project and they’re hoping they’re going to get this great financial reward. And then Nick is looking kind of depressed, right.

And, also Really bored. Like he doesn’t think this is a great place to be. And what’s amazing is that during these 45 minutes, you gradually see the other three people on the team starting to act just like Nick and after just 40 minutes. You can see all of them just deflated, right? Like, like looking like they’d rather be anywhere else.

And one of the MBA students actually puts her head down on the desk in her fatigue. So I just wanted to make the point that most managers. I think that an individual performance problem is an individual problem, but we know from huge amounts of research that an individual performance problem is not an individual problem.

It’s a systemic problem that impacts your entire team. And unfortunately, I mean, I’m really sorry. Sorry to give you this news, but what William Phelps concluded from his study is that the best predictor of how a team performs is not how great the best performer is or what the average member is, is like most often it comes down to what the worst team member is like.

In other words, poor performance is especially contagious. So, in other words, if you want a high performing team, you got to get rid of Frit. Now, if you want to do it depends and find another job for him all the better, right? If you can find a number of other places where he can thrive, right. But after you’ve given him that candid feedback, if you’re really going for a high performing team, the lower performers will pull down the energy and the performance of the others on the team. Whereas if you have all high performers, they tend to cycle up, right? The energy tends to cycle up. Now, even if you believe in this high performance, you know, the question is then, well, what would I do in order to encourage the managers in my organization to actually get rid of France?

Right? So at Netflix, they have this. Sane, which many people hate. And I know it’s very controversial if you dislike it. I understand, but I do think that it’s important to get us thinking where they say, you know, unlike many companies at Netflix, we practice adequate performance and get a generous severance practice.

Retaining employees and why is it important (41:03-44:03)

Prep package. Right. In other words, you know, help brands find a better home for themselves. That’s not on your team. Right. Okay. Now, if you want to try to get this kind of high performance in your own organization, how are you going to get your managers? Actually, take these tough decisions. Managers don’t like to fire their employees.

We love our employees. It was hard to find them. It was hard to train them. We keep hoping that the mediocre ones will turn into amazing ones. Even when all indicators tell us it’s probably not going to happen. And what they do at Netflix is something quiet. Simple. They use something that they call the keeper test and you can just, we can just keep it really easy,which is something like twice a year, maybe you as a manager, you just sit down by yourself and you ask yourself some questions.

You go through every employee on your team. And you think if Jason came to me today and Jason told me that he was leaving the organization to go work somewhere else, how would I feel? Would you feel devastated, would you think, Oh my gosh. If Jason leaves, it’s going to be so hard to find a replacement, right.

Would you fight hard to keep Jason? And if so then, you know, you’ve got the right person in that spot. Would you feel relieved? Would you think to yourself a good than not now I can get rid of that issue? Right. Would you feel excited? Would you feel excited about who you could maybe get into that spot and if you feel relieved or excited, then you have another question you would have to ask yourself, which is, have you given Jason candid feedback?

If you’ve given Jason candid feedback if you haven’t, you better go give it now, but if you have, he hasn’t been able to improve. Now you need to make a tough choice. Okay. And you know, whether you believe in Reed’s vision of adequate performance gets a generous severance. I do think that this is a very good exercise.

For all managers to go through, just so we’re constantly kind of thinking about, you know, the, the makeup of our team and if it’s high performing like we would like it to be right. Um, okay. So that ends up in our first section, right? Because I can tell you if all of your managers in your organization are following the adequate performance, get a generous severance, and they’re all following the keeper test already.

You’ve got a lot more of what Netflix called talent density. Right? You’ve got a lot more high performance in a small team now already, you can start getting rid of a lot of the rules, those high performers. They don’t need that rules and process, but you still have a second thing you need to do in order to make sure that people don’t take advantage of the freedom that you’ve allotted them.

The feedback dilemma (44:04-49:09)

And that brings us to our fourth and last dilemma. So the fourth and last dilemma is about feedback.

Karthik is going to ask me some tough questions in the fireside and you can too. Okay. So anything that’s bothering you or you’d like to bring up, we can bring up at that time. Okay. All right. So here’s your next dilemma. Fourth and last dilemma. Here’s the situation? We’ll see if we got some diversity. Okay. You are the, you were on the sales team in your company.

You’re not a manager. You are one of the sales representatives. Now you go to a meeting with one of your colleagues. Okay. Now this colleague is a little bit higher level in the organization than you are. He’s been there a little longer than you have, and you know him, but not really well.

Right? You have, let’s say kind of a little bit of a relationship. Now you go into this meeting and during the meeting, your colleague does something that you do not think is great. What he does is he talks too much. He talks too much. And because he talked so much, the client doesn’t have an opportunity to express himself.

And there’s actually one point where the client is speaking and your colleague actually interrupts the client right now. You feel that this is not good. It’s not good for your relationship with the client. And it’s not good for the team. Right. But you’re not sure if you should tell. Your colleague or not.

I mean, he didn’t ask you for feedback. Is he gonna want that feedback? Is he going to appreciate that feedback? Is it safe to give him the feedback now? I just thought I’d help out those of you who are always pushing for it. Depends I gave you and it depends. Okay, so here we have an, a, B or C.

Okay. So a yes, you’ll give the feedback. Okay. You’re going to get, you’re going to tell them don’t talk too much. Okay. B You might give the feedback. You’ll give the feedback if the opportunity arises, right? Like if a good moment arises, you’ll get the feedback, or no, you’re going to keep the feedback to yourself.

Okay. So let’s see. We’ve got okay. And I see some people are wanting to know about the corporate culture. Someone’s asking me. Okay. Well, do I work for Netflix? Because if I don’t work for Netflix, I might get fired if I give the feedback. Okay. You didn’t say that, but I assume that’s what you’re saying. And of course, right.

We all know that in some work environments, it’s really dangerous to give someone feedback, especially someone senior to you, or more experienced than you. Now, what I can see are a lot of A’s and B’s, and I see absolutely no CS, and actually I’ve come to expect that I actually added B because everyone was saying, Hey, and I didn’t believe that.

So I didn’t believe them because I think that many people think that they feel, yes, I should give them feedback. Right. But of course, in truth often we don’t give feedback. We don’t give eedback because of the amygdala. The amygdala is the most primitive part of your brain and your amygdala sets off alarms.

When it’s worried that you are going to be kicked out of the tribe. Right. It’s one of the biggest human fears is to be kicked out of the group. So when someone criticizes your work. Or tells you that you’ve done something poorly, especially someone, a little bit senior to you. You’re a MIG, Dilla goes off, right?

It starts setting alarms and you know what it feels like to have your amygdala go off. And you also know what happens when you set other people’s amygdalas off. Right. So often we feel it would be safer to just be quiet. Right? Okay. No, that being said, I saw again, we got lots of A’s and lots of bees, and now we’ve got a couple of brave people who are coming forward with CS.

Um, but I think like even the C here we have Mohana who said C because giving feedback is not my strong point. Right. But we are still here, they’re all kind of like, I feel like I should, and I know it would be helpful. Right. Um, Well, what I found. Okay. So first of all, you know, I don’t know if you like my, my dilemma, maybe I don’t have it.

Right. But it’s something like honesty and high performance is the intention with politeness and kindness. Right. I don’t care about politeness, right? Without upsetting the person that we’re working with. Let’s say something like that. Right, now interestingly, and maybe that’s why we have so many A’s in the group.

People’s opinion on receiving feedback (49:09-53:09)

In one piece of research that was conducted across many different industries, 72% of people polled felt that they would do their job better with more corrective feedback. Right. So people are asking for this, that being sad for me. It is very difficult to find an organization where feedback is actually the superpower of the company.

Right. And we’ve got this couple of people here who were talking about where do we work? Do we work at Netflix? I mean, Netflix feedback is their superpower. And I just would like to get you to think for a moment about if you would like. To create, an atmosphere in your organization where you’re getting the advantages, the upward performance push that comes from that feedback.

Right. Then there are a couple of things you can do in your company to really encourage it. And I’m just going to give you a few ideas. Okay. So the first one is that if you want a culture of candor, Then you can start having an an environment where feedback gets put on the agenda frequently. So one thing that you’ll see at Netflix is that very frequently you’ll come into the office.

You’ll look at your agenda and it will say something like 10:00 AM. Feedback with Jane. I feel James put that there. What, what you know is that when Jane comes to your office, she’s going to ask you to give her some feedback about her performance. And then she’s going to give you some feedback about your performance.

If you have a corporate, organizational culture or a team culture, we’re putting feedback on the agenda is very good. Frequent. It deals with all of the BS that we’ve just seen here, all those people who say, you know what? I give the feedback, but only if the right moment arose. Right. Okay. Well, now the right moment has arisen.

It’s on the agenda or on your monthly meetings. It’s always the first item of the meeting, or it’s always the last item of the meeting. Right? You give one another feedback. Okay. So that’s one thing that we can all start doing. Now, the second thing that I want to do, that they do at Netflix, is actually quite controversial.

And I have to tell you. I was amazed. I was amazed and I am maybe disgusted when I originally heard about this, but I came around to loving it. So let me tell you what they do. So Netflix does what they call, um, three 60 feedback dinners and a three 60 feedback dinner is, you know, maybe once a year, you don’t have to do this, but most teams do it.

Maybe once a year, your team gets together. And, um, you sit down over a meal for several hours, right? And you take turns. And when it’s my turn, we go around the table and everybody at the table gives me feedback about how I can improve my performance. Now you can give me some positive feedback, some actual positive, actionable, positive feedback.

Like, I love that you do this, please continue. But that should be no more than 25% of the feedback. Right. Um, really we want to focus on what do you think I can do to improve right. To get better. Um, and then after we’re done with me and we move on to the next person, right. And we go around the table. Now I have to tell you when I first heard about this, I thought it sounded crazy like public shaming.

And I had always heard right. Praise in public. Criticize in private, but I came to see, as I was interviewing people at Netflix that the large majority of people love these dinners. I mean, they’re difficult, but they love them because they start to really get a clear picture as to how to up their performance.

Right. Often if one person gives you feedback, you don’t know, is it about them? Or is it about me or is it about our relationship? It’s hard to know, but when you have these kinds of circles of feedback, it becomes clear what’s about one person versus what’s really something that everyone thinks that you could do better.

I actually started doing this with my own teams at NCI, and it’s been really successful. Uh, okay. So here I have a quote. This is a quote from this guy named Larry tans, who’s an employee at Netflix. He says getting publicly ripped apart. Sounds like torture. Each time I go to a live three 60 I’m nervous, but after you get started, you see, it will be fine because everyone is watching.

People are careful to be generous and supportive with the single intention of helping you succeed. No one wants to embarrass or attack you. Everyone gets a lot of tough advice. So you’re not singled out when your turn comes. It might be difficult to hear what people have to say, but this is one of the greatest developmental gifts of your life.

Okay. So this is a provocative idea, but I thought, I think it’s worth thinking about right. Maybe some of you would even feel like you’d like to do something like that on your own team or organization. All right. Now, um, Up until now we have dealt with two things that are very controversial. Some of you love them and some of you hate them.

The cake and adequate performance (54:37-55:02)

And I know that, but if you deal with these first two aspects, then we can move on to the cake. And everyone loves cake. So what I mean by that is adequate performance gets a lot, gets a generous severance, a lot of controversy in that principle. Right. It’s kind of like spinach, right? Some people love it and some people hate it, candor.

Candid work environment- is it for all? (55:02- 58:38)

Okay. Some people love the idea of a candid work environment. Some people are not so sure. Right. Okay. Again, it’s the spinach. But if you get, if you manage to get a high-performing work environment, however, you go about it and you manage to get a culture of candid feedback. Now you can move on to what I found.

Everybody thinks it is great, which is freedom, right? You can remove the controls that most organizations have in order to control their employees’ movements here, and I’m going to end up in five minutes, stop in five minutes. Okay. So at that moment, anybody who would like to speak up and ask questions is welcome.

And I would love that. Okay. Now, what we’ve got here, It’s a list of all of the policies and processes that many companies have. Now, maybe you don’t have them in small entrepreneurial companies often. Don’t right. But many companies have, and Netflix does not have. And when you look at these, they fall into three different categories.

So some of these, um, our policies, right? Our policies about you know, how much you can spend or what you can do at what time. So for example, the Netflix vacation policy is to take some, right, or the expense and travel policy at Netflix is, um, S. Act in Netflix’s best interest right now, these, I would say these freedoms, are mostly symbolic.

These are mostly symbols that tell your employees that you trust them to behave like adults, which then triggers them to be responsible and behave like adults. Right now, the second set is a little bit more surprising. So often, I think many of you probably don’t think about these as management controls.

In fact, you think they’re freedoms. Key performance indicators management by objectives pay per performance bonuses, but these actually process that we use in many companies in order to give our employees some level of freedom, but also to keep our hand on their shoulder. Right to make sure that they’re still moving in the direction that we want them to.

Right, the idea of Netflix is of course, that they’re really creative people, right? Those really mavericky employees that are the most innovative. They don’t want to have a hand on their shoulder. They want to work at a place that they can run free. Right. And, um, then of course also, if you have the best employees, they don’t need these things so much.

Right. And then we have the last type, um, the last category here, which is, I think the most interesting, which is approvals. So, um, decision-making approvals are approval processes, right? So in almost all organizations, if you want to spend a lot of money and you’re at a lower level in the company, you have to get approval from your boss.

Right at almost all companies, if you want to start an initiative or, or buy a product or sign a deal with our client, and it’s kind of a big deal, you have to get approval from your boss. Right? I, at Netflix, I know it’s kind of crazy to think about, but they actually have no approval processes. And what they say is.

Pleasing your boss vs what’s best for the company (58:39-1:00:19)

Don’t seek to please your boss seek to do what’s best for the company. And I think there’s this great image, which is that at most companies decision-making is like a tree, right with the CEO, sorry. And most companies’ decision-making is like a pyramid, right? With the CEO at the top of the pyramid and the lower level.

Employees lower down, right. And lower-level employees can make small inexpensive decisions, but with more expensive or more important decisions, they push up the chain. Right? Netflix, operate like a tree. And what they say is lead with context, not control. So you see Netflix is the CEO. Who’s like kind of down at the roots of the tree.

He’s not controlling or approving people’s actions. Instead, he’s setting the context for the company. Right. This is the way that we’re moving. This is the strategy we should keep in mind. This is the North Star that we’re running towards. And then the senior, the senior people are kind of like those low-level branches clarifying the context for their parts of the organization.

And then we have the lower-level managers that are really on those outer, smaller branches. And they’re the ones making the big decisions. Right. I actually heard, you know, uh, seems like dozens and dozens of stories about lower-level managers at Netflix signing off on them, telling me stories about signing off on multimillion-dollar deals that often their bosses didn’t think was a good idea.

Wrapping up before the fireside chat (1:00:19-1:02:07)

Right. But they had done their homework and they really thought it was gonna work. And they would talk about their hand shaky as they signed the deal because they never been given that level of responsibility before. Right. nd that of course brings us back to dilemma two. And you remember it.

Seventy-five percent of, you said with Sheila, right? You remember Sheila that Sheila, when she came to you with that great idea and you didn’t believe in it, you know, about 75% of you said, yes, you let Sheila work on it. And the other 25% were like, well, gosh, I don’t know if I want to, if I really want to throw that money away, if I feel like Sheila is not going to be successful.

But, I think that really brings us to. Well, we can see as the secret sauce of Netflix, which is that they’ve got all of this crazy innovation speed that comes because of this high freedom, no wool environment. Okay. Karthik, I have talked a ton and I see there’s a lot of action going on here in the chat box.

Fireside Chat With Erin Meyer

1) The beginning of a great chat session between Erin Meyer, the Author, Speaker, and Cultural Expert and Karthik Chidambaram, Founder & CEO at DCKAP (00:00-03:30)

Karthik Chidambaram: So Erin, that was a great talk. I really enjoyed, been taking some notes as well throughout the talk. I have some quotes from you and I feel we can actually frame some of these quotes in our offices. So let me actually read some of the quotes I thought were really cool.

“Individual performance problem is not an individual problem, it’s a team problem.” So that was very, very interesting. “And managers don’t like to fire employees.” I thought that was very cool as well. “Performance is contagious”. One thing we really loved is, “feedback is superpower”. We would like to frame that and stick it in our office. Feedback is superpower. Thank you Erin. We are really honoured to have you join us.

Really appreciate it. Let me actually start by asking, how did you start working with Reed Hastings? You did talk about this a little bit in your book as well, but as you live in Paris, you’re not exactly his neighbor. How was it working with him and how did the magic happen?

Erin Meyer: Yes. Let me just say Karthik. I’m sorry. I just saw my own visual and I see it’s gotten all dark around me. So since I’m in Paris, it’s getting to be nighttime. When I started, I had the right lighting. I’m sorry that I looked so washed out. Okay. Thank you Karthik. You are right. I had a very funny experience when I met Reed. I wrote my first book, ‘The Culture Map’ in 2014. And when it first came out, I had a small publisher and it wasn’t getting a lot of reading. It built up very slowly.

So one morning I woke up and I opened my email as I always do. And I had this email in my inbox and I’m just going to read it to you because I have it word for word here. It said, ‘Erin, I was in the Peace Corps, Swaziland. So I was in the Peace Corps like you were. Now I’m the CEO of Netflix. I loved your book and we are having all of our leaders read it. I’d love to have coffee with you sometime’.

I just loved that example because it shows the self-deprecation of Reed that instead of having his assistant contact me and say, ‘Oh, you know, Mr. Reed Hastings would like to set up a time to talk with you’, he just said, ‘Hey, we were in Africa together’.

So then I started doing work with his organization. They were getting ready for their rapid international expansion, which they did in January of 2016. I worked with them on getting ready for that international expansion.

Karthik Chidambaram: That’s awesome Erin. Actually we found that in you as well. While we’ve been preparing for this conference, you made us feel very comfortable and yeah, that was really nice. And I think that’s something we can learn from Reed and you. So thank you.

2) Get hold of tips from Erin Meyer to operate with freedom and responsibility (03:32-05:30)

Karthik Chidambaram: You talked about freedom in your talk and that was pretty cool. And you’re also raising two boys and of course school is the first place that we are all part of. Do you find that schools these days are preparing children to operate with freedom and responsibility? The reason I ask is I also have two kids, a daughter, and a son.

Erin Meyer: Yeah. Well, I think it’s such an interesting question because if you think about it, most of our value systems around companies were set up for the industrial era and what I mean by that is that during the industrial era, there was a strong focus on error prevention, consistency, and replicability.

I know in many of your listener’s organizations, they still have, maybe in major parts of the company that the main goal is error prevention, consistency, and replicability. But in growing numbers of workforces, in growing numbers of teams and organizations, we’re finding today that the main goal is no longer error prevention and replicability.

It’s fresh thinking. It’s trying to be innovative, try things out, fail sometimes. And I want to tell you my kids are raised here in France. I have these two boys, Ethan and Logan. They’re ages 15 and 11. I clearly see in the French school system that they have not transitioned from the industrial era.

I think that the US has maybe doing a better job with that. But what I mean is that there’s still a strong emphasis in the school on not making mistakes. Like I’m getting it right. How many did you get right, how many did you get wrong, and teaching the children to prevent error instead of teaching the children to think freshly.

I think that’s a very interesting thought when we think about how to raise our children to be successful in organizations of the future.

3) Feedback is superpower! (05:30-08:47)

Karthik Chidambaram: Well, definitely provide them a lot of feedback too. In your talk, you mentioned ‘praise in public and criticize in private’ and that’s something I’ve read as well. But then, what do you think of this feedback culture? Do you think that’s going to work for everyone or is it more for companies like Netflix? Your thoughts there?

Erin Meyer: Well, I really think that this depends on how much you’ve invested in high performance, but also what kind of personalities you’ve allowed to have on your team.

One of my favorite quotes at Netflix is ‘no brilliant jerks’. And when we were talking earlier about Nick, you remember Nick, right? Nick was the interloper and William Phelps’s study. You remember that when he acted jerky, the others on the team all started acting jerky also. I think many of us can think of times in our lives that we’ve seen that dynamic.

That one person on the team was jerky and just seemed to get everyone kind of jerky. So I actually feel the first employees that we need to get rid of are the ones that are jerky because if you got a lot of jerky employees, then those feedback dinners, there’s no way they’re going to work.

It’s only once you really have employees who are ready to help one another. And maybe I’ll add that at Netflix they have some guidelines for giving feedback and you can use these to. I call them the four A’s. So the first is that when you give feedback, it should always be with the aim to assist.

So we don’t give feedback to get frustration off of our chest. We don’t give feedback just because we feel like, ‘Oh, that guy made me angry’. Feedback should be given only with the aim to assist. Secondly, it should be given only when it is actionable. So there’s no point in me giving you feedback about something that you can’t act on, but if it’s clear to me how you could act in order to improve your performance, then I clearly want to give that feedback, right.

So aim to assist and be actionable. And if I’m those two things, then the last two ways are about how to receive feedback. So when I receive feedback, you remember your amygdala starts going off, right? Your alarm starts going off. That means your trigger is to defend yourself, fight or flight to defend yourself or to hide.

But what they say at Netflix is appreciate the feedback. Show appreciation, ‘Thank you. Thank you Karthik for that feedback. I appreciate it. It’s not easy to get feedback like that. I appreciate it.’ Then you can go into the corner and let your amygdala go off for a while. The other one is accept or decline.

So if you really managed to get a high feedback superpower in your organization, then you’re going to get a lot of feedback everyday. But that doesn’t mean that you have to take it. I mean, you can take some of it and then others, you can think, ‘Okay, I listened and I thought about it, but I don’t think I’m going to take it’.

But yeah, I don’t think that has to be Netflix. I think any manager who really sees how giving that feedback could improve performance can work step by step to get this, get this feedback culture instituted.

4) Learn more about the Keeper’s Test from Erin Meyer (08:48-10:55)

Karthik Chidambaram: Feedback is superpower. That’s cool. That’s awesome. And you also talk about firing your hardworking employee for if he is mediocre and things like that.

In the book, you also talked about the keepers test. Essentially, if I were leaving today, would you work hard to retain me? And that’s what the keepers test is all about, right? In your talk also you mentioned it. So what about the emotional part of a person who’s getting fired?

Let’s say, for example, you are working for Reed and you do a good job. Everything’s great. And then things don’t go that well and you’re fired. Then how do you deal with that Erin?

Erin Meyer: Yeah, well, Karthik, gosh, that’s the most difficult thing we ever have to do, right? As leaders firing people is so difficult because like I said earlier, we love our employees. We want to be right by them.

We hate the idea of kicking them out of the group. We don’t want to set their amygdala off even if we know they’re going to land on their feet. If we don’t know they’re going to land on their feet, it’s doubly difficult. And of course, they’re going to have emotional reactions. What I can say is the more courageous you have been to give candid feedback throughout the process, the easier adequate performance getting a generous severance process will be.

And I actually think that at a company like Netflix, where people hear it when they join the company. They are like, ‘Okay. If I choose to work here, I know it’s not going to be a job for life. I’m going to take the job on, I’m going to get lots of freedom and I’m going to really try to just do my very best work.

And if it doesn’t work out, then I was able to enjoy working here for a short period of time before I moved onto something else.’ But I didn’t have an easy answer to that Karthik, I think. Yes. I mean, gosh I hate that. I mean, that’s the worst thing that we could have to do. But that’s part of creating a high-performing team and we have to remember we’re doing that for the other employees so that we can let them have that freedom and then their performance can cycle up.

5) Have a sneak-peek into the ways for investing in culture (10:56-12:40)

Karthik Chidambaram: Thank you Erin. That makes a lot of sense. Appreciate that. And since we have a lot of B2B distributors in the audience, I have a question from them. How does a B2B distribution or a manufacturing company take a hard look at its culture. Why invest in culture before investing in technology and commerce?

Erin Meyer: Yeah. Well, I think, it’s very common, of course, for us not to give our culture much thought, especially if you’re a smaller entrepreneurial organization you’re just fighting to keep alive. And then as you get bigger, you have lots and lots of things to think about.

Trying to get a corporate culture going requires a big time investment, but I believe it is a very very critical time investment. So what do we need to do? The same things we talked about at the beginning. We need to spend a good deal of time as a management team. What are the tough dilemmas that our teams and our managers are facing on a day-to-day basis or employees are facing on a day-to-day basis?

What are the really important ones to us? How will we then guide our employees to make certain decisions when they’re faced with those dilemmas? Don’t choose 20 of them. Just three to start out with. The three most important ones. And then you need to talk about it a lot and debate it a lot.

One of the things I saw at Netflix is that at every quarterly business review meeting, they have culture on the agenda. So they were constantly coming back and debating it again and again, and I really believe that that is worth the time, although I know it’s easy to put it in the back of our minds.

6) “We are a team, not a family.” (12:41-15:25)

Karthik Chidambaram: Yeah. Have culture on the agenda. Have feedback on the agenda. Thank you. That makes sense. Great. And you said that a great workplace has stunning colleagues. And you also shared with us about William Phelps, the professor or your colleague and a jerk creates more jerks.

It’s actually scary if you think about it to have poor performers in your team. You always want to have great performers. But the question is a lot of distributors and manufacturing houses are family-run and in the book you talk about Netflix’s culture being more of a professional sports team rather than being a family.

The best players of the team stay in and the not so good players get out. So how do you deal with it when a business is family-run, what recommendations do you have, how can they evolve for growth, and how do they strive for high-performance culture?

Erin Meyer: Yeah. So I think the image or the analogy of the company as a family is the most common analogy and any analogy about organizational culture. We are a family and that’s clearly from the industrial age. People were in jobs for life and because people were in jobs for life, they wanted to create a family environment so that people would be happy working there for the next 50 years.

Again in some of these companies that the participants are and that you’re in, you may also still be wanting to have environments where your employees are there for life. Your goal may be error prevention. Your goal may be consistency and replicability, but if you have parts of the company then your goal is no longer error prevention and replicability.

Like, maybe the eCommerce side, for example, the goal is innovation, the goal is flexibility. Then I do think it’s important to think about leaving the analogy of a family behind.

So at Netflix they say, ‘We are a team, not a family’. And the idea is that we should think about our organization as an Olympic team. So we have the best players in every sport and every year we’re kind of re-evaluating, ‘do we have the best people there’ and people will come on and go off.

And everyone knows that that’s the deal. I don’t think that this has to be in contradiction with a family-owned business. I think you can have a family-owned business and still run it like a professional sports team. But of course then if you have family members involved, it gets a little bit more complicated. I don’t have an easy answer for that.

7) Innovative decision-making tactics (15:28-17:50)

Karthik Chidambaram: Thank you Erin. Yeah. And in your book and in your talk, you’ve talked about Netflix employees signing contracts worth a million dollars or more, and also empowering employees to make decisions. However, you also mentioned in your talk that a lot of decisions are made top-down and contracts are usually signed by owners or the executive management in a lot of companies. What recommendations do you have to change this approach?

Erin Meyer: Yeah, this is scary, right? As you said, like if you have a family-owned business and the family has invested all of their money and resources into a company, it’s scary to think about giving that kind of power to someone you’ve just hired.

But I also think you have to ask yourself if you’re really going for a high-performance in your organization, and you believe that the people that you hired are the best on the market, then don’t you and they deserve to take advantage of their skillset? So they do something very interesting at Netflix, which is to encourage risk-taking and maybe I can just get those of you listening to kind of think about it.

So what they do is when employees join the company, often their boss says to them, ‘I want you to think about this as if I’m giving you a set of betting chips. And you can use these chips to take any bets that you believe in. I’m not going to judge your performance based on whether one bet fails or one bet succeeds, or even on how several bets fail or succeed.

I’m going to look at how you use those bets over time and what yield you get from the bets. So after a couple of years, I can look at you and I can think, Oh great. You know, she failed a bunch of times. But she sure succeeded a lot of times.’ And that’s where we have an environment that is really innovative and not so focused on error prevention.

But that also requires this whole idea that the boss has to be willing to say, ‘Go ahead and spend the chips as you like. Even if I, as the boss, I’m not comfortable with it.’ I don’t know what to say beyond that Karthik. You’ve got the great employees, use them for what you pay them for.

8) Tips on survival during these turbulent times (17:53-20:00)

Karthik Chidambaram: Thank you Erin. We have a lot of questions from the audience, so I’m going to actually take some of their questions right now. So we have a question from Chris Lion and his question is how to lead a midsize business through times of risk and unpredictability that too a lot from a manufacturer’s perspective. So how essentially do you lead a mid-size business during these turbulent times?

Erin Meyer: Yeah. Well, I don’t know if I can answer that question in a sentence or two, I guess if I could, I would be very, very rich, but what I can say is that I think that many of us are seeing today with COVID having hit us out of nowhere.

None of us were expecting that. And we realize now that we have to be more flexible as an organization. We have to be more flexible than we realized we had to be. And we know that once we get out of this COVID mess we want to try to build organizations that are more flexible, more innovative and more reactive, so that when the next unexpected event hits us or when the environment changes, we’re ready.

And I think that even for those of you, you’re in your industrial organizations, you’re in B2B businesses, but I think that you also at least in some ways are trying to think about being more flexible.

So I would really encourage you. I don’t think you’re going to do all of these principles from Netflix. I know some of them are just too crazy, but I would really encourage you to start thinking about these principles like how can we start little by little building up talent density and building up candor?

Why do we have all these processes? Can we get rid of some of the processes? Can we get rid of some of the rules? Is that going to make our employees happy or did it even occur to us? I’m sure you were hoping for a more brilliant answer than that, Chris, but I just go back to my key points. I really encourage you to start thinking about trying some of these things.

9) Investing in the right talent results in high performance (20:02-23:45)

Karthik Chidambaram: Well, definitely keep it simple. Yeah, I totally agree with that. We have a question from Scott Zell. And his question is what is your advice about investing in talent and capabilities?

Erin Meyer: Okay. I’m so glad that we got that question because I want to differentiate between Netflix and many of the companies that you are running. So, this whole idea of high performance for giving people more freedom to create innovation, that is for people who are in creative jobs.

And so if you have people who are in creative jobs, you want them to be more innovative, and this is the method to use, but probably, if you’re in manufacturing, you probably have some areas of your company where you have employees that are not creative employees, they may be working on assembly lines.

They’re doing operational jobs. Maybe you want them to be innovative in the way that they organize those assembly lines or whatever, but other employees you’re just hiring them for replicability and error prevention. So you might actually think about how to use these concepts in some parts of the business and not in other parts of the business.

There’s actually this fascinating research that was done called the rockstar pay study. And this was done originally with software engineers. So what happened was that there were a bunch of software engineers who came into a lab and they were given a set of tasks to complete within an hour. And they were also again rewarded financially based on how well they did.

And what was really interesting in the study was that although all of those software designers were at least adequate designers, the top performer, I think there were eight of them in the study. The top performer performed better in some tasks at a 10 times greater rate and in some tasks at a 25 times better rate.

Reed knew that research because people in the software, maybe you Karthik, people in the software industry tend to know about that rockstar research, but it hadn’t been applied to other creative companies. From what I know about and Reed thought, well, if that’s true for software engineers, that should be true for any creative team or organization. Because if you can get a really creative thinker, then it’s clear that person’s going to perform 10 or maybe 25 times better than someone else.

So I think that’s really the answer about hiring top talent and that if you’re going for creative roles, then go ahead and hire one amazing person and pay him 10 or even 25 times more than you would instead of hiring 25 or 10 employees who are adequate. Maybe that sounds too exaggerated, but what it means is stay lean and mean.

Hire the best employees, pay them a lot of money and keep your teams lean for creative roles. For operational roles, go ahead and follow the methods you’ve already been following.

10) Gain insights on reaping the benefits through candor (23:46-25:27)

Karthik Chidambaram: Definitely. Thank you Erin. We have a lot more questions, but we just have five minutes left. So I’m going to run through some of these questions.

We have a great question from Parth Acharya and his question is, are there parts of these frameworks or principles that may apply to people in leadership roles without authority? Because that’s always the question, right? ‘Hey, I mean, your principals are great at it. I want to do all this, but I don’t have authority in the company’. What do you recommend me to do?

Erin Meyer: Well, I don’t think that you can apply the removing rules and process without the buy-in of management. If you have processes and rules in your company and you’re not the boss, then there’s nothing you can do. Now, that being said, you could go talk to the bosses, right?

You could go outline these principles. You could ask them to think about them and you could get some discussions started. That being said, I really believe that candor, the element of candor can come from anywhere. I think you can always get discussions started.

I think we could really benefit from hearing one another’s feedback more. I’d like to hear your feedback more. Can we start putting that on the agenda every week? In our one-on-ones, on our team meetings. Could we dare to go out and give one another feedback and a team? And I think that we can really get a lot of the benefits of feedback even without authority.

I think for the high performance team, the keeper test that only be applied by the boss, but you as the influencer can of course be talking to the bosses to try to get that going.

11) Learn more about strengthening the culture (25:28-27:44)

Karthik Chidambaram: Thank you. We have another question from Ulan Kenzler. How do you recommend moving from an existing organizational culture to the one you described? I think this is a great question. Let’s say for example, if the company has just under 50 people, how do you transition from one culture to another?

Erin Meyer: Little by little. So obviously if you have an organization that has been operating with error prevention, replicability, as the overwhelming ethos and you are full of processes and you are full of rules, you can’t just say, well, let’s get rid of this.

But start with step one, increase talent density. So that’s the first thing. Don’t go onto the other things. Increase talent density a little. Start having those conversations on the team, start asking yourself the keeper test. Start thinking, talk with your team about the desire to really create a high performing work environment.

And then of course you have to make some tough decisions and then your talent density increases a little. As your talent density increases a little, you can start getting a little bit more candor going. What do you want to do to get the candor going first? If you’re the boss, get your team giving candid feedback to you.

That’s the first step. You can’t expect them to be candid with one another first. First, get it to you. It’s the most difficult part, ask for the feedback. And when someone dares to give you direct blunt feedback about what you can do better as the boss, celebrate it publicly. Send emails to people.

‘Oh, I got this feedback. I love it.’ And one thing that’s crazy at Netflix is like Reed and the executive team are always sending their three sixties around so that everybody can see the criticism that they received. And they specifically cut out the criticism and put it in the emails. But when you start celebrating, thank the feedback that comes to you, then people start thinking if they can give feedback to you as the boss, well, then they can dare to give it to one another.

And then you get the feedback and now get rid of some of the process. Can we get rid of some of the process around here? Little by little, right. It’s a journey.

12) Great conversations can never be undermined (27:45-30:18)

Karthik Chidambaram: Thank you. This is gonna be the last question. And again we have a lot more questions, but sorry, we couldn’t cover everything.

So this is from Ryan Van Hoozer. This was a terrific presentation, Ryan says. If a manager chooses to set a high standard for employees performance, how do you recommend addressing adequate employees that have been incredibly loyal that is decades of working with a company. How do you deal with that?

Erin Meyer: Yeah. Well, I think it’s challenging because you, that wasn’t the deal when you hired them. Clearly with the new employees, the deal should be clear when you hire them. You should say, ‘Look on this team, we’re going for high performers and you look like you are a real high performer.’

You should be focused and tell them my goal is to create a high performing work environment for everybody. I’m continually making sure I have everybody know that’s the deal. If you have people in your organization who have learned that the deal is that they can work there for life and they’ll be loyal, but they don’t have to give you their best.

Then that’s of course difficult, but you need to start being candid with them now. One-on-ones, don’t do it immediately. Don’t pull the rug out of them. Because you had a different deal with them. Start moving towards it, candid feedback. You go in, you have the meetings, this is what I’m working towards.

I’m trying to create this. This is what I’ve seen happening. This is what I need from you. If you’re able, if you’re going to stay in this role, little by little, you have to be tough, but if it doesn’t work out, we’re going to have to move on to try to find you another solution.

But you got to start now to lay the groundwork because you had one deal with them. And now if you want to create a new corporate culture, you have to set up a new deal. And I’m sorry, it’s the most difficult kind of discussion you can have. I know that right. You’re going to lose sleep over it. I know it.

Karthik Chidambaram: Erin, thank you so much. It was awesome listening to you. I wish we had another hour, but again, thank you so much. Thank you so much for joining the DCKAP eSummit. Thank you for answering all the questions. Appreciate it.

Erin Meyer: Thank you Karthik. I’m so sorry. I didn’t get to answer all of your questions here, please join me on LinkedIn. Send me a personal message if you’d like to chat more, I really look forward to hopefully seeing you face to face next time. Okay. Best of luck with the rest of the conference. Thank you.

Data Automation & Smart Integrations Future of B2B Commerce, Praveen

Host: So next I’d like to bring up Praveen Venugopal, he’s going to be doing a presentation in regards to data automation and smart integrations, the future of B2B commerce. So Praveen is a solution consultant with DCKAP working closely with B2B customers. He comes with a solid eCommerce background and has spent over seven years of his career with Amazon and is a PMP certified professional. So, I’d like to bring up Praveen to the stage. Welcome.

Praveen: Perfect. Sure, thank you for having me here. And, I guess the screen is up and being shared. So, hello everyone, thanks a lot for joining the session today, and hope you are able to see my screen and my video. Today we are going to be talking about data automation and smart integrations, and we’ll be talking more from a B2B perspective.

And with respect to today’s agenda. Initially, I’ll be talking about the current trends in the B2B ecosystem, and then eventually we’ll jump on to how that automation and smart integrations can be applied in the B2B ecosystem. And then eventually I’ll give you a sneak peek into cloras, which is our B2B Integration solution.

So I would like to start off with a quote. Um, it says that “The reason it seems that price is only what customers care about is that you haven’t given them anything else to care about” And this is a famous quote from Seth Godin, he’s a very influential figure, as you might know. So this comes in as a very powerful statement for me, right?

Because in today’s B2B world, it is all about pricing on how you differentiate yourself from your competition. But then if pricing is not going to be the key differentiators of what is it that is going to be the key differentiator. So that is what I’ll be walking you through as part of my session.

Tim gave brief insights in terms of what I do. And, I’ve been with DCKAP for around four years and I’m Praveen and I work as a solution consultant. And, I specifically work with B2B and B2C customers, but then specialize on the B2B side of things. And I have these conversations with our customers on a day-to-day basis and provide solutions based on their needs and with respect to the session today as well, it is based on some of the feedback I’ve got from the team and based on market research that I’ve performed.

So now let’s jump onto the actual topic which is on shifting the B2B landscape. So I’ll be emphasizing a little more, in terms of what the current trends are and the evolving trends in the B2B space, and then I’ll also talk a bit on the automation and integration part of it, and then jump on the cloras.

So things are changing, in today’s world, but I’m not really getting on to the current world in terms of the new normal that you’re living in. But then, I’ll just be taking things into perspective, even without the center’s perspective on how important and what trends are happening in the B2B space and how customers are leveraging some technologies in this space.

So the first one is on the B2B personalization. So, this is one of the key aspects that you might be encountering every now and then. So you definitely have a lot of customers and you want to keep giving them that personalized experience. So this is where account-based marketing also comes into the picture.

So, and again, this is where you could start off with a few like order, or a top-notch customer that you might have to start with and then eventually put some of your other customers. So, this is going to be critical and this is something that a lot of customers are already liberating and nothing like good old content marketing and storytelling. Right? So, with respect to content marketing, it doesn’t need much of an introduction. There is a lot that is happening. In terms of content, but the thing is there is above and more in terms of videos and all of that, rather than just text-based content earlier and then that’s something you can leverage on, and then storytelling is what would definitely help you to build a brand around it. So content is one part, but then the story helps you to build a brand around that.

And now the next one is on the user-generated content. It could be multiple things, and that is a huge adoption in the B2C ecosystem. And there is also adoption, which we are seeing as of today in the B2B space as well. So this could be multiple things, right? So this could be even user reviews. So that can feedback in, or it could be even some of the posts that they are doing in some of the trade shows that they are trying to participate and then have photos of them. So, trying to market around those things. So those are some trends that are catching up. Influencer marketing is always a big thing. Unlike the B2C ecosystem where it is more in terms of having the celebrities and all of that, and the B2B ecosystem has more to do with the actual users of your services and then word of mouth is what happens at this particular level. Nothing like word of mouth in business, as you might be aware of. So this is something you could definitely capitalize on. The next one is LinkedIn. So I’m not talking about all of the social media channels, because in the B2C ecosystem, we feel that LinkedIn has a lot more traction than some of the other channels, it also gives you the professional field and it makes you more relatable and more trustworthy. So that’s where LinkedIn comes into perspective and it’s not just about marketing on LinkedIn, right? It could also be your internal users or your employees who are trying to leverage LinkedIn as a platform and post on how they feel about the products and how they feel about the company. So these are engagements that you can have here.

With respect to omnichannel and multi-channel, that is what we’d be talking about through the next few slides, but then that is one of the key aspects that you should be looking at. And, multi-channel and omnichannel are different in the way where multichannel could be one channel at a time, omnichannel is having that integrated experience across. Yeah, both of those apply based on what business needs that you might have.

And then supply chain and logistic management is also a subset of omnichannel presence, I would say. But then, uh, I just wanted to bring it in here because that’s very, very critical and that’s going to be one of the key differentiators, right, based on which customers are going to specifically choose you. Because, with respect to customers, they are looking at deliveries, looking at what taxing they are using and how fast they’re getting things delivered and at what cost. So these are things that you can definitely be looking at. Obviously, the e-commerce part of it in today’s world is even more critical, where you are able to interact with them in their digital channels and make these purchases. It need not be just a purchase that they’re making online. Right. It could be even some of the offline purchases. But then they could still maybe pay that online or they could also see what orders they have placed offline. So these are some use cases, right. But there’s a lot more than you can leverage on the e-commerce side of things.

So that’s pretty much on the current trends and the next one is on the evolving trends. So again, this is from a famous cartoon, which is Richie Rich, from ABC Corp. This was one of the cartoons CDs which fascinated me in terms of technology, on how things are evolving, I was really fascinated. But then like some field adoption in the real world has taken a back seat. So, but then it is evolving at this point in time, and there’s a lot of interest shown in this particular space. So the first one is on data visualization, even though that is adoption on the data visualization part of it, it has not been tapped into its full potential, that’s what I would say, because there are avenues that you can programmatically see on who are the customers, and then based on algorithms, you could target them. So that’s still not happening. But then there is definitely scope on that. So that is what you’ll be seeing in the next few years.

Artificial intelligence and the internet of things. So, this is huge, right? With respect to artificial intelligence already there is adoption in the B2B ecosystem, but then it is bound to increase only over a period of time. And a lot of solutions are coming around these lines so that’s something we can definitely leverage. And the other one is on the internet of things, with respect to the internet of things, specifically on the manufacturing and distribution side, there is a lot of interest specifically on the robotic side of things. And, that would specifically apply when you’re trying to source inventory and that could be, placing them on the racks and all of that, so there’s a lot of interest around those lines as well.

Next, we have the visual search. So, even in today’s world, a lot of customers are searching for some products, but then they really do not know the SKUs or product IDs and all of that. So sometimes they take pictures and send it across. So right now how this has been handled is, maybe they have diagrams, and then they could just click on that diagram and then place an order for that particular part of the B2B space, but then that’s also going to go in the visual mode.

The next one is on voice commerce. This is a very interesting field, and actually, even at DCKAP we are running a few experiments around this, and this is catching up really in like huge fashion. And specifically, there are stats that also says that all 40% of Americans, even as of today, leverage voice as part of their day to day transaction, which is a huge number and it is only bound to increase and a lot of these devices are coming up in terms of the echo dots and all of that, so it is only going to increase.

Then there is this unique concept called geo-fencing. So it is making yourself local to the customer. There are definitely going to be customers who want to place or who want to be associated in an ecosystem where they have everything within the location they are in. So targeting yourself to be as part of the ecosystem, in the individual geography. That’s going to be critical and that’s the geo-fencing part of it. In today’s world, this is inevitable with respect to video conferencing, all of that. So there have already been interests in terms of the visual walkthrough in terms of the showrooms, in terms of what inventory is available, and all of that. In today’s world, it is even more critical. We also have scenarios that are integrated even on an eCommerce site where they’re able to block a time off from your sales rep. And they are able to look at what inventory is available and then take it to purchase rather than having the real interaction in some cases.

The other one which is going to be booming is VR and AR. With respect to augmented reality, it has a lot of use cases even with respect to security precautions. So there’s a lot that is happening here, which means that with respect to AR you can specifically go or navigate within your systems and find out what issues are there in terms of missionary if something is failing and all of that, and then there could be a trigger which could be sent across, and then the similar part number could also be ordered. There is definitely a lot of evolution around this particular space. So these are some of the evolving trends in the B2B space.

So moving on from that, I just wanted to talk about, um, data automation as part of integrations. So specifically on the B2B space, there’s a lot of interest here because whatever we have seen so far, function well and they are really critical as individual pieces, but then they also need to integrate together to give an Omni channel presence.

And in a lot of cases give a consistent experience for your customers. Be it your external customers or your customers who are internal to you, which would be your employees as such.

So with respect to having this experience, workflow automation is one of the key aspects. So as you could be thinking of it, there could be multiple use cases. You could think of a customer who’s trying to purchase online, and then he might want to pick it up from the store. And then likewise, somebody walking into the store and purchasing stuff, and the promotions need to apply to the online channel. There are multiple use cases, right? Based on how they want to leverage the channel. They also need to have a consistent experience and they need to be seeing the same data. And if it is going to be inconsistent that definitely, these customers are going to leave you over a period of time. We’ll also see how important that is in the next few slides as well.

These are some external experiences and even internally you could have your inventory coming in, it could be scanning barcodes, and that gets into ERP and then that could get automated into your shelves, and then that could be on your multiple channels. So, it’s a huge opportunity that you can definitely capitalize on.

So a good example of what happens if a system works in silos, it has to be integrated. If things could be working well separately, then they need to work parallelly as well.

Let’s look at why integration is critical for distributors. So these are a few reasons, right? The first very important reason would be to have a single source of truth for all of your data, and that’s what takes care of everything else if you really think about it. Having a single source of data always helps because, with respect to your orders, that could be your ERP with respect to your product data, it could be a PIM. So having one single source of truth is very important so that you can leverage it to multiple other channels. So from the end user’s perspective, they’re getting a consistent experience. And sometimes there are also scenarios where there is no inventory, you are not able to fulfill the orders and that gives them a bad experience.
And that also drives this loyalty. And eventually, yeah, you would want to automate your business processes and eventually that saves time for your employees. And most importantly, they can see real-time data. So as I mentioned, inventory could be a great example where you would want to showcase the real-time data to your customers.

As you keep doing this, you also build workflow management for them, which means, for a certain set of your customers, they would have their own workflows, which means that they could have a purchasing manager purchasing assistants and all of them. And having that structure in-built will also drive loyalty within the organization. So that’s something you can definitely tap on. Also, having a transparent process for your customers, right? So if you’re able to clearly tell them what they have done offline, what they have done in this particular channel, and how many points they have across channels and as they’re also able to tap into the IoT systems. That gives a world of opportunities. So that’s something you can definitely capitalize on. The other one of the obvious reasons are, this also helps with the enhanced customer satisfaction and improves your sales down the line.

And as you’re looking at integration solutions that are a bunch of solutions with this available. I’m not going to be going into the details of each of these solutions, but then, I just wanted to bucketize solutions into two buckets actually. One of them being a custom solution and the other one being a cloud-based integration solution.

And as you could look at this, it is a no-brainer in some ways. You could see the sales management, a cloud-based solution is much easier. The total cost of ownership over a period of time will definitely help you to save a lot of costs because that’s not going to be a maintenance every now and then, and you get completely covered. And it’s also a scalable solution, right? So there could be a couple of systems you’re integrating down the line, as we are talking about a lot of these systems, even as part of the future. So it has to be scalable for us to accommodate all of them. So that’s one other key aspect.

Then the security and reliability aspects of it. So with the custom solution that is going to be just catered to what we are looking at. And some of the other aspects it’s not really looked at with a cloud-based solution. So all of the underlying security and all of that is established. And with respect to reliability, even if there are failures there are retry mechanisms, and all of that, that is happening. And you also have documentation and support and you can self manage a lot of the solutions. So these are some of the major differentiators on why you would be going to integrate a cloud-based integration solution.

And then, one of the other major use cases is that you might be doing integration today and tomorrow down the line if there need to be some changes. We have got this request, right? In some cases, we are able to look at it and in some cases, it is really buggy so again, you need to kind of start things from scratch, which also increases your cost. But then I definitely understand from a merchant’s point of view.

In some cases, uh, they look at custom solutions because it looks like a one-time cost, at least when we look at it. But then, what we really need to think is it might not be a one-time cost there is going to be definitely upgraded which might happen for your systems. At that point in time, you need support. There could even be errors happening and your business logic would change over a period of time. And with a lot of our customers, we have also seen that change once in every few months as well. So that’s something you need to have into perspective.

And basically, the end goal as we see over here is bringing down the customer effort. And it is also your internal customer’s effort, to a certain extent as you think about it. And that’s the end goal of having all of that in place. And why is that even very critical? Right. So that’s what I was even initially talking about in terms of the code. Again, so if it is not going to be pricing which is going to be a differentiator what else is going to be? So this will give you some insights there.

Here is a basic customer journey, nothing fancy about it. You might be aware of it for the most part. So that’s going to be an initial trigger for them to consider a distributor or a manufacturer in some cases and then there’s an initial brand consideration. As part of the brand, your digital channels in today’s world serve as a huge aspect. And the other one is on the active evaluation. Even at this point in time, the digital channels serve as a huge factor. And one of the things that stands out here is influencer marketing, which we spoke about some time back. So that’s also a key factor that they look into. They look at what the customers are doing and how easy or user-friendly your systems are, and then they make a purchase decision. And then if the experience is great and by my experience, I would say a low effort experience. And then that drives loyalty.

And on the contrary, if it is not great, then it drives this loyalty and then they move out of the market. So this is an ideal customer journey and you would ideally want to be in a cyclic of face value, just driving loyalty and making this. So once you keep investing in making these low effort experiences, that will definitely give you results over a period of time and also instantaneous results for some of the activities that you’re trying to do. It has a huge role. You’ll see why I say that you could see over here that the impact of it is huge. So if you’re just transitioning from high to low effort experience, it brings down your overall cost by 37 percent. It’s a huge number. And these are from Gartner’s report.

With respect to a low effort experience, it increases the customer spend by 88%. So the customers are willing to pay more if you’re able to give them the low effort experiences that they deserve. So again, this also boils down to what I was initially saying, this is what you need to be concentrating on. So giving low-fat experiences to your customers will eventually help drive revenue for you.

On the contrary, what happens with the high effort experience? So, the high effort experience drives disloyalty by 96%. These are huge numbers, as you could think about it. So we could be thinking these are small things that we are looking at, but then these are small things which will add on while the customers are making a decision and with respect to making decisions it is very minute in a lot of cases. So these are the experiences that you should be differentiating. It also increases the negative word of mouth in case of the high effort experience and in our business it is all about word of mouth, as you would agree with me.

Obviously creating low effort experiences is the key and that’s what you should be concentrating on. Having integrations is going to definitely help you out on those lines. And it may not be just integrating information, right, it could be a lot more experiences that you could integrate and that’s what you should be definitely looking at.

How should you be choosing the right integration solution for your business? Well, these are a few parameters you should take into account, whether it’s an on-prem or a SAAS or a PAAS. On-prem is gradually dying down and SAAS is not scalable and SAAS based solutions cater to all of the customers in a similar fashion but then suspect integration, as you might know. It is different for each business so we might have to handle it differently. And that could be multiple integration protocols of the supporter. You need to see what is required for you and what your future state needs are and then to what solution is ideal for you and look at what self-management options are there right now and down the line as you can consider solutions.

For bigger teams, role management and collaboration are also important. Also, reliability and scalability aspects are something you should be looking at. So we spoke about this earlier as well, and then eventually having the operational efficiency which drives the return on investment. So that’s one of the key drivers, right? Whatever you’re investing in, you need to be seeing the return on investment to see what you can save and how you can automate the overall process. So you don’t want your team members to be working on redundant tasks, so you would want them to concentrate on your customers. So that’s where they should be working on. And eventually the total cost of ownership you should be seeing what the upfront costs are versus the ongoing cost, which is also very critical.

So now I’d like to give you a sneak peek into our solution which is cloras that helps make B2B integrations seamless. So cloras is a CLOud Rapid Automation system and it’s a PAAS based solution and platform agnostic. You can delegate all of your problems to cloras and we should be able to take care of things for you. With cloras, you can have multiple systems integrated within the same instance. So that’s one huge value add that you get. Here is one of the use cases, we have a very intuitive drag and drop interface. It’s very easy and user-friendly, as you could see here. With respect to modifiers, you could have all of your integration logic incorporated. Basically, all of the business logic can be applied by yourself to a great degree. You can self manage some of these, even if some business logic is changing down the line you can also test it out from here.

We also have a developer interface which pretty much helps developers to code in. These are some of the other highlights of cloras, I just want to give you a quick intro on this. So it helps with seamless integrations and we are GDPR compliant and we help with all cloud-based solutions or on-prem-based solutions which we can definitely integrate. Plug-and-play this one great value add and you can do integrations in real-time versus you could also do it in an automated fashion based on schedules. You could also get to have a user-friendly dashboard in terms of managing your integrations. In most cases, you might not even be leveraging it, but then as your business needs change, you get in here. You also have one-click enable and we have a multi-tenant architecture as well over here.

That’s pretty much what I had as part of my session today. Thanks a lot for your time today. In case we have any further questions, please reach out to me at

Host: Thank you so much Praveen. It’s great content in terms of ERP integration. So I know a lot of the worldwide user group from the P21, the Epicor prophet 21 group is here. And you know we are a leader in that space where we have a lot of solutions in terms of just integrating eCommerce platforms with ERP.

B2B Best Practices | Dave Bent, President at ES Tech Group

Tim Diep introduces Dave Bent to the audience (00:00 – 00:40)

I would like to bring on Dave bent. He’s going to be talking about the three critical success factors for B2B e-commerce success. A little bit about Dave. He’s a leader in driving transformational business change for both billion dollar and emerging companies. ES Tech Group, Evolution X, President, Dave Bent is committed to helping any size B2B distributor, affordably, and efficiently realizing its full online seller potential. I’d like to bring Dave Bent to the stage.

Introduction from Dave Bent and his business’s background (00:40 – 02:00)

Yep. Perfect. Well, Tim, the result is a nice introduction. Thanks for having me and I guess for everybody attending. Good morning. Good afternoon. Good evening. Wherever you’re coming in from. Just a little bit of background about ES Tech Group. We are a DCKAP partner and have actually been in business since 2006.

We started in the UK back then and are a provider of B2B e-commerce platforms focused really on distributors and manufacturers. If I fast forward to today, I run the US operations and we have just about 350 customers live on the platform. As I said, very much B2B focused as opposed to B2C. And, let me jump into the topics here. My background prior to ES tech was as a CIO in several multi-billion dollar distribution and manufacturing companies. I have a lot of lessons learned and a lot of scars, good things that happened, not so good things that I have tried to compress all of that into three critical success factors that I think I’ve kind of seen and see if we can get through it in 20 minutes.

Dave Bent takes us through the “Three Critical Success Factors For B2B Ecommerce Success” Starting with “Finding Your B2B eCommerce Partner” (02:00 – 14:55)

So it starts and we’ll go into each one of these in sequence here, but I kind of have a passion around the fact that if you’re either just getting into B2B e-commerce and, many companies still are maybe surprisingly, but many are, or if you’re already deeply into it. I think you should be looking at the platform provider as a partner.

I think it’s more than a transaction of getting some software and turning it on. So we’ll talk a bit more about that. You should be having a partner, but then as you kind of build on that, I think really, I will say, and my background as a CIO. The technology is really kind of the easy piece there, I say it.

if you don’t get the people, the organizational alignment in your business and you don’t adjust some of your processes, it really isn’t going to be successful. It’s all got to come together and then it’s got to be combined with using data over time to drive continuous improvement in really the experience for your customers when they’re online.

And then last but not least, we’ll go briefly into, I don’t think this is maybe as it’s kind of obvious, but I don’t think people view it that way. The most successful e-commerce presence is going to create the best customer experience. It’s why we all focus on us, you know, a small number of sites for procurement buying.

It’s the one that gives you the best experience, the easiest experience, the most engaged experience that’s going to win. And so, you know, how do you enable that? So point number one, infact success factor number one, as I said, I think it’s about finding a partner. A lot of people start their journey in e-commerce or even if you’re already actually deeply into e-commerce and maybe thinking about the fact that you need a better platform. People will often start with an RFP/RFQ document that lists all the features and functions that you’re looking for. But I actually think you should have some criteria in there about the company you’re about to partner with, putting up an e-commerce site is a strategic decision, it’s a business strategy and it should be for the long term. And so it’s trying to make sure that your goals and objectives are aligned with the partners and that it is an ongoing relationship. And so, I think, if you kind of think of evaluating partner choices and I created a pyramid here and it is a pyramid structure and deliberately sets up that way.

I think these foundational elements that should be criteria in who you select. And those are kind of the must haves. There are a set of criteria that I call them as business enabling, that things that are gonna drive efficiency for you, efficiency for your customers. And then there are criteria that will overall drive the ultimate success and see growth for you and see satisfied customers.
We’ll go through this and we read from bottom to top, so bear with me. But really, I think of these as selection criteria. And as I said, if any of the foundational elements are failing, Or don’t exist. It’s gonna cause the structure to crumble.

It’s a pyramid. And so for me, and a lot of it was on the last presentation. You know, the fundamentals are security, data privacy and compliance that is kind of a must have in today’s world. It’s everything from making sure you have real time mitigation of service attacks. It’s complying with data privacy regulation, like the GDPR, the global data privacy regulation that came out of Europe. Now relevant regulation also in California and really that that’s kind of a must have, and these are all must haves. We get calls, you know, if I come up with the list here bottom to top, we do get calls from prospects, say, Hey, I’m looking for something which has more uptime. My site keeps going down. And so. If you’re selecting, somebody, really ask for their statistics on uptime. It certainly should be 99.9%. And really it should be 99.9 % uptime. So, essentially the site is not down for all the obvious reasons. And then, it should be massively scalable. I think what we see as a patent in today’s world is obviously distributors in particular who have a broad array of suppliers and products.

They need massive scalability in terms of SKU’s and so the site, the platform should be massively scalable in terms of SKU’s, orders, customers transactions. The site should always have sub-second response time. And we all know if the site is slow, it is bad that you’re not coming back and so that combined with mobile responsiveness is kind of another obvious one in today’s world or what I would call for infrastructure type, things that must be there. And then the other one that must be there. To have a foundation to a great site is really world-class product content. so that’s the rich content on the website, the images, the videos, the marketing copy, the data sheets, 3d image rotation. It’s the things that enable a prospect or customer to come to the site. And actually find what they’re looking for. It drives an effective search and it’s got sufficient detail that you can make an accurate buying decision. And so what we know statistically, you can see if the product information isn’t as good as it needs to be.

The actual product returns will be higher. And it is really critical to drive a great search experience. And so your partner, if most manufacturers obviously provide the content for the products that they’re manufacturing, but certainly in distribution, you need to talk to the partner, if you don’t really have a visibility into how you get great content, and we have partners both in the UK, partners here in the US like DDS distributed data solutions. We have a number of partners to make sure our customers get awesome content. So absolutely critical and, but often actually, not recognized as a significant challenge and having great content is a lot of work. So if I come up the pyramid, as I said, you know, this is business enabling, it’s kind of next up in the tier and each one of these levels builds to making the one above more effective.

And if they aren’t there, it’s going to be, you know, not a great experience. So next up from my perspective and experiences, you need a lot of B2B functionality. It’s very different for those of you I’m sure most people on the webinar here know B2B is very different to B2C, the procurement scenarios are more complex. And so your platform should have features for this built-in. They shouldn’t be somebody showing up to write software to do this. And I’m meaning things like order approvals, you know, an approval hierarchy and an order above a certain value has to get approved by someone else in the customer organization. Maybe the customer wants to track budgets and budgets against a cost center or a department. Maybe they need punch outs from a procurement platform. All of these things have to be in the platform that is configurable as opposed to writing software, they should be standard and quick to implement either in the initial setup as you onboard a new customer, this should not be complex. This should be an intuitive setup that either you or the end customer can perform.

ERP connectivity, It’s a big part of our relationship with DCKAP. The connectivity clearly drives efficiency, especially as, as online business scales. Our ideal approach is we get access to the backend for real-time pricing, real time inventory. But number one is also that as an e-commerce user or as a distributor manufacturer, You’re really only managing any data sets in one place, either in the ERP or in the e-commerce platform. So that’s critical and having that rich functionality that also includes things like pulling up all the history, orders that were not placed online invoice history, credit balances, so that connectivity is critical. And should honestly in today’s world be enabled by open APIs, that do facilitate real time connectivity.

Other integrations too, sometimes PIM product information management platform, CRM, Punch outs, I mentioned it’s really growing very quickly in the enterprise or the government state world where departments, procurement departments are using punch outs. And if you’re not familiar with that, Google it, but it’s one of the fastest growing things that we see in B2B, or you can send me an email and we can talk about it.

But these enabling capabilities that are built into the platform and architected, they will enable a faster implementation and faster improvements to the site once it’s live. And because of that, it’s going to be more cost-effective for you as somebody working with a partner with an e-commerce provider, faster implementation, costs less, and it gets you faster to an ROI.

And then really, I shouldn’t really say the icing on the cake, but it’s the growth on the pyramid. The site absolutely should enable you to segment customers. So we all have different types of customers and you should be able to segment them. And when they all are logged in, it creates a more personalized experience. So that could be the dashboard they see when they’re logged in. It could be the promotions that they see are specific or associated with their normal buying patterns. And so personalization is key and again, it should be built into the platform. It doesn’t need to be a science. That should be something that the marketing team can leverage, implement , and really drive a deeper and deeper engagement with the customer. And it really is combined with, I would say sophisticated marketing and merchandising functionality. So, you know, we see some of this is very much in B2C, but everything from cross sells, upsells, reward programs, coupon codes, Buy 1 Get 1, whatever it might be, content pages specific to a new product launch.

All of these things should be in the platform, be intuitive and be able to be managed by the marketing team, not requiring a call to I.T. and, the length and time, it should be a weekly change to the site. SEO controls certainly, a very important part in B2B as well, at least when you’re prospecting and people looking for people to find you, we’ve certainly seen in our customer base during this COVID period with supply chain disruption, a lot of businesses are Googling for products. We all know about PPE equipment, which we have customers who sell at the SEO capabilities of the platform or key for those kinds of things. And then. Last, but not least I’m back to my partner statement. You should check, you know, Is the platform that you’re looking at, is there a history that it’s continuing to evolve? If It’s continuing to get new features and capabilities because this world of commerce is changing rapidly. And so look at the roadmap history. Talk to existing customers. Do they charge every time new features come out? I’d actually don’t believe they should be charging. We don’t. but it’s that driven by, I’d say lifelong kind of counsel on best practices and the relationship in an ongoing way.

So, you know, all the quarterly business reviews and is the platform or partner, as I prefer to say, or that goals aligned with yours and helping really grow the business, bringing existing customers online, who may be once online and growing the share of wallet, growing older size, and then also leveraging the site for finding new customers. Hopefully this is a checklist. Tim, I think your Tim’s going to make the slides available, but I’m happy to follow up with any of you if you have more questions, there’s obviously could be a lot of detail behind all of this.

Aligning People, Process, Technology & Data (14:56 – 19:12)

So second, as I said in the intro, technology in many regards in my view is easy for me to say, but it’s the easy piece. And I’ve seen in some of my projects that I was responsible for in my CIO days. And I see it with some customers that they’re not really thinking through the people or organizational aspects of driving e-commerce, and certainly then there’s process implications. And then how do you leverage data? just briefly we’ll go through some of these. So I think we see there’s many companies who put up an e-commerce site. And as I say, you know, build it, they will come. And actually in B2B, they definitely won’t come. Customers are not going to come show up. Your existing customers are not going to convert to the site. And you’re unlikely to find new prospects. It requires the right talent and the right processes to be combined with the right platform. And so, if you think of the people side, I don’t know whether you start with this or some of the other points, but it’s absolutely clear somebody in the team needs to have a digital marketing background and digital marketing skills. And I would actually say. If I was hiring somebody, if I was a distributor or manufacturer, I’m looking for somebody who has that in a B2B world, as opposed to B2C, it is different. It’s all the personalization and the engagement from a marketing and merchandising perspective is different from B2C it’s actually bringing existing customers on and selling them more products, winning share of wallet and making sure they spend more with you than the alternative suppliers that they could consider. So it’s a different scenario. And if anybody wants to follow up, we could go deeper on that, but that’s kind of a must have but often missing.

And then the other key must-have organizationally is the sales team, the sales team. Mustn’t see the new website or the existing website as a threat, a threat to their commission’s, maybe a threat to relationships that they feel they built over years. it’s got to be actually promoted by the sales team. The salesperson is usually the most trusted person in the relationship with the customer. And so. It’s actually critical that the sales guys engage, that they understand the platform and they understand that it can help sell the benefits of the platform to customers along with its features and functions and is critically important and so that organizational change management, aspect is key and it’s something we actually endeavour to help customers with during, you know, an initial implementation, if they haven’t really done e-commerce before. it’s no good in just delivering the platform. The process. Well, Maybe it’s kind of obvious, but the website needs daily feeding and attention for it to be engaging.

And that comes back to the digital marketing skills, the customer segmentation, bringing the right promotions, setting up new features, Maybe people need help setting up, you know, approve those budgets in the platform, but it needs daily feeding and attention and if it gets that, It’s going to be successful. And if it doesn’t get that people in the process piece, it will be a very static site. And then last but not least, the continuous improvement should be data-driven, the analytics on the website should enable you as the provider of the site, manufacturer distributor to really track what works, what doesn’t work. They kind of AB testing from a marketing perspective and really seeing which features work and which promotions work. So these full things have to come together and really they’re living and breathing, the technology needs to keep advancing, the people need to adapt to the technology, the processes get refined and data is used to drive all of that.

Creating The Best Customer Experience (19:13 – 21.50)

And then, just last but not least from an overall perspective, creating the ultimate customer experience. That is why we tend to gravitate to certain sites when we even as B2C people are procuring for ourselves. I think the word omni-channel may be sometimes overused. But, I think it’s actually super important, let’s say businesses that aren’t selling commodity products, the engagement with sales is still very much there. And so I put the quote here, you know, I use the web when I want to, when I call a sales person, when I need to, that must be seamless. Maybe there’s a sophisticated product that needs to be set up, configured, discussed, presented in a quote, but that quote needs to end up back integrated into the website to be turned into an order. Some of the non-transactional things like invoice payment should come onto the web and make it more efficient.

But it is a total omni-channel experience that still leverages sales people and still may leverage consultants. And so, I kind of say it, maybe it’s a strange sounding phrase, but the website experience, honestly, should be enjoyable. It should not be frustrating or aggravating and it’s actually got to enable efficiency for the customer. It’s got to be personalized. It’s got to have the account management features, invoices, credit balances, all of those things that can be done online very simply and more efficiently. But ultimately what the site needs to do is it needs to fit the customer’s processes. So if they are tracking budgets and however they’re doing it, purchase order numbers, cost centers, approvers. Once those things are set up with a customer, it enables those extra business efficiencies. They are going to keep coming back to the site. And so those features drive stickiness, which drive growth in the share of spend with you versus your competition.

And then very last but not least, we probably all know this, but sometimes it doesn’t work as it should do. The whole thing has to be backed by a supply chain that meets the delivery promise. We’re in this world, If I want it now, or at least want it when you told me I was going to get it and it’s going to be the right product, it’s not going to be damaged and so, supply chain and measuring supply chain is also really, really critical.

So. Tim. I think I wrapped it up. I’ve got my email address here. I’m not sure there’s too much time for Q&A, but, anybody who’s online, feel free to email me on any parts of the presentation.

Tim: Awesome. Thank you so much, Dave. That was a great presentation. Yeah we are running a little bit short on time and so if you do have any questions, feel free to address them in the Q&A tab at the bottom and then hopefully we get all the presenters to be able to answer those.

Digital B2B Payments as Necessity, What You Need to Know

Timothy Diep: So next I’d like to bring up the APS Payments team. So APS Payments, a repay company offers omni-channel B2C and B2B integrated payment solutions for eCommerce users. APS Payments is a gateway and processor that is trusted by thousands of merchants daily to process payments and works diligently to offer the lowest credit card processing rates, reduce risk, and provide the best payment solutions for customers.

Hillary Heath and Kim Lombard will be your payments industry experts today, presenting Digital B2B Payments as Necessity, What You Need to Know. So I’d like to bring it over to Hillary Heath and Kim Lombard.

1) Gain insights on digital B2B payments from Kim Lombard, Regional Sales Manager at APS Payments (00:55-11:23)

Kim Lombard: Great. Thank you. Welcome everyone. My name is Kim Lombard and I’m with APS payments, which is a provider of flexible and integrated payment solutions for every business.

So even if you already have a merchant services provider and think everything is going well. The information we share with you today may make you rethink or better yet feel that now would be a great time to review your current program.

So today we will focus on processing challenges, transformations, fee structures, and what you need to know about business-to-business transactions as they relate to digital payments and our integrated solutions. So, let me tell you, what’s really impressive about our presentation today is that you’ll be getting two payment experts for the price of one.

So we’ve broken the presentation up into two parts and I’ll be conducting the first half. I have with me today, as you can see Hillary Heath who is one of our senior channel managers and Hillary actually started on the integrations team and therefore has a wealth of knowledge in that area and she’ll be sharing with you during the second half.

So about us, APS Payments is a repay company, and again, we offer integrated payment solutions for every business. We process for thousands of merchants in over 20 countries. Our processing volumes for our merchants range anywhere from 2000 a month to 20 million a month, we’re ranked as a top acquirer.

We’re listed on Inc. 5,000 list for America’s fastest growing companies for 2017, 2018, and 2019, but our real strong suit and why our merchants love us is because of our effortless integrations into multiple leading ERP, as well as eCommerce platforms, point of sale systems and mobile applications. Because of our quality service and life support, the keyword here being live because our merchants never get thrown into an automated system rather they get a live person on the phone who’s always ready to assist.

So in this COVID era, it’s almost impossible not to talk about the new normal. It’s been mentioned a few times today, and it’s definitely changed the way in which we do things and not just for the short term as we initially anticipated, but rather for the long haul.

So nearly 30 million people are saying they will continue to work remotely even once things go back to normal and 66% of businesses will not only rely more highly on digital payments after the pandemic, but are doing so now.

Again, no denying that the pandemic hit us like a ton of bricks. A recent report shows nearly half of small businesses are a mispayment away from going under. And here’s some of the most common issues we are hearing from our merchants and our prospective merchants recently. They’re telling us customers are paying slow because they’re having a tough time or because they’re working remote and it’s having a negative impact on their cash flow.

They’re saying customers are requesting to pay by credit card, but they haven’t historically sold online or offered credit cards as a convenience. But most frequently we keep hearing that they have a little more time right now and therefore reviewing business processes, and looking for our help to reduce costs.

And what’s really funny to me is that in that same sentence they will state, they need to offer alternate or additional payment options yet they still expect to decrease their bottom line. So it’s like, let me get this right, we want to increase products and services, but cut expenses. You might find this amazing. But in most cases we can do just that. And we’ll show you how.

One thing is for certain, customers want to make payments when and how they want to make payments. I can tell you firsthand, because it actually happened to me last week. True story, I received an invoice via snail mail from a doctor’s office and went directly onto the website to make a payment. It really never dawned on me that they didn’t have a pay button on their website.

So if anyone has ever had to call a doctor’s office, you know what happens? You get placed on hold and wait. So it was frustrating, but after being on hold and being transferred around a few times, eventually someone was able to take my payment over the phone. I don’t know about most of you out there, but I don’t even have checks or write checks anymore.

And what I find really interesting is that I’m running into a lot more businesses that no longer want to accept checks. So basically in a roundabout way, what I’m trying to say is the meaning of omni-channel is the ability to provide multiple methods of collecting payments in ways in which your customers prefer such as online, voice response, ACH, or mobile payments.

Now let’s take a look and see if you’re getting the best value from your processor. It really all begins with knowing what type of pricing structure you’re on and that information can be found on your statement. Being able to interpret your statement will not only provide you with all the fees associated with your account, but it will also help you effectively negotiate the best value.

I’ll be reviewing the different types of structures here on the next slide. But first I want to warn you. It’s a bit confusing. I come from the financial services industry and even as a registered principal on CFP, it’s confusing to me to take a deep breath because you don’t necessarily need to know everything to get the biggest bang for your buck.

I know this is going to sound really corny, but all you need is a friend, someone in the industry that can help. So, APS Payments actually provide no cost statement analysis whereby an analyst will go through your statement line by line and decipher the pricing structure and fees. We will then communicate all that pertinent information back to you so that you can make an informed decision.

Let’s go ahead and look at the understanding price structures. So there are three main pricing structures, flat rate, tier and interchange plus, or sometimes referred to as interchange pass-through. The first is a flat rate, which takes a simple approach and a good example would be a square or PayPal whereby a flat rate is determined across the board, usually around 2.75% to 2.9% for card present and 3.5% for card not present. There’s also transactional fees ranging between 15 cents and 30 cents per transaction.

But usually there’s not any other fees because they’re not passing along the savings to the merchant, regardless of the interchange rate, there’s no B2B level three processing, and there’s really no control for the merchant.

Moving on to tiered pricing. This type of pricing is a little bit more convoluted and really the easiest way for me to explain this would be for you to imagine three buckets. We have a qualified bucket, a mid-qualified bucket and a non-qualified bucket. So the processor will determine at its discretion, which bucket the transactions actually get dumped into.

And most often only a small percentage of those transactions usually make it to the qualified bucket. So, this is probably the most expensive structure of the three and it’s not at all transparent. And again, the merchant really has little to no control. The last pricing structure would be the interchange plus, and this is probably the most advantageous as merchants will pay true interchange, the hard costs, and then an agreed upon markup.

This method does allow for B2B level three processing, which is an actual reduction in interchange and which I’ll be covering on the next slide. Also, this option is completely transparent and the merchant does retain control.

Let’s look at level three processing. For those of you who are not familiar with level three, it refers to business-to-business and business-to-government transactions. It was introduced back in 2012, really with the intent to drive costs down by reducing the interchange. For example, if the interchange rate on a corporate card is 2.95%, but if you process level three data, which Hillary will be covering in just a few minutes, the interchange rate is reduced to 1.8%. It’s amazing. 80% of companies either do not know they can get level three processing or they’re on a flat rate structure. And again, it doesn’t qualify them.

Now that we’ve kind of established the differences between the pricing structures and what level three processing can do for you, let’s take a look at a statement analysis or a direct comparison. This is an actual comparison of one of our merchants and they were on tiered pricing. You can see that the tiered pricing buckets range between 2.25 and 4.39%.

So listen up if you’re multitasking right now because this is my favorite part. If you look down on the right-hand side or the lower right-hand corner, you’ll see a 33% savings for almost $64,000 in annual savings. And this merchant actually came to us by way of an ERP partner and was looking to streamline their payment processing by adding our solution to their existing ERP.

So as I mentioned before, merchants can actually, or businesses can add on products and services and actually decrease costs. See, told you we could do it. So now I’m going to go ahead and turn it over to Hillary. So Hillary, take it away.

2) Understand ways to simplify the digital payment processing from Hillary Heath, Channel Account Manager at APS Payments (11:28-22:50)

Hillary Heath: Thanks Kim for the introduction to level three processing.

This is a lot to take in and it might be a little confusing at first, but it’s actually pretty simple, although kind of labor-intensive if you’re not doing it the right way. To take advantage of level three processing visa and MasterCard require a pretty large amount of information to be passed along with the transaction.

In short, more information about the validity of the transaction means that the transaction is deemed less risky to the card brands. And it’s less expensive to process those transactions. Depending on the way that you get paid now, it might be very cumbersome to get that information and really pass it along.

This might mean swiping and double entering or switching over from a virtual terminal and entering more than a handful of data points just to take advantage of these kinds of programs. This creates a huge hassle of leaving the program that you’re already working in to go somewhere else just to get paid and you’re trying to save your company money as you’re doing it.

But one of my favorite sayings comes into play here. Sometimes the juice just isn’t worth the squeeze. I’m not going to change something if it makes it harder on me. So take, for example, everything you’re used to working with inside of SAP or whatever ERP or CRM that you’re using.

Because of level three processing requirements, you’ll need to go digging and hunt around for whatever information that you know is there, but it’s not readily available. It’s not an easy to consume format. Since SAP is my area of expertise, I’ll use it as an example, but this really applies to any of the systems that you’re currently using.

This is standard information that’s native to the ERP tools that you use and operate on a day-to-day basis. Directly in business one, you’re looking at things like business partner, master data addresses, sales order, item, product codes, things like SKUs, item descriptions, quantities, freight, pulling from invoice tables, shipping, you get the gist going down the list, checking off each and every single one of these boxes.

And this isn’t an extensive list either, but it is a great first look here at this process. If you had to fill out this chart for every transaction that you ran on a credit card every single day, how many documents would you have to go through? How many things would you have to touch to find that information?

How much time would that take? How many approvals and authorizations and what would you need to go through? And frankly, how annoyed would you be at that process that you would have to follow? We allow you to leverage the information from your ERP and send it on your behalf, actually to solve these pain and problems.

And in terms of operating your business, getting paid really should be the easiest part. But the problem is there are actually a lot of problems. So payment processing has historically been very challenging to begin with. We can use the second half of the presentation as a way to uncover some issues that we might not even know we’ve been having, assess pain points and put together a comprehensive action plan to move forward.

Kim spoke a little bit about the shift in the way we’ve been doing things and the way we’ve been going about our pain and processing and in light of recent events, you’ve spent really the last eight or so months transforming your business and we’re starting to uncover a whole slew of things that are now in the room for improvement categories on these self-assessments that we’re running on our businesses.

The one thing that has not changed is the need to accept payments. We just need to address some of these challenges. Maybe it’s time intensive, duplicate entry, and it gets data that doesn’t flow from the platforms you’re used to using, lack of centralized reporting are slow processing times, need to streamline a need for more secure data cash flow, bottlenecks, and, and really just addressing subpar customer experiences.

But bottom line, you’re looking to help pad that bottom line and cutting your own operating expenses. So how do we solve these challenges? Better eCommerce solutions and better integrated payment solutions.

Finding the correct payment solution and leveraging the right resources can go a long way. So what can we do to continue to transform this business? We have our grocery list now. We know what our challenges are. Let’s go shopping. So I feel like we’ve talked a lot about money already so far. We are APS Payments after all, but we’re here at this DCKAP event to explore solutions, right?

So let’s get into it. eCommerce is a big beast. We’re all familiar with the need to get business-to-business payments up and running. We’ve been talking about that all day. We need to be using these in an efficient and easy-to-use manner for our customers and frankly, for our own sanity. I wanted to highlight some of our eCommerce features here.

And in particular, the four S’s that I have listed on a screen here, security, savings, being seamless and our support. These four categories are really crucial when shopping for eCommerce solutions. These are the kinds of things that will help ease up some person-power. Things like daily automatic batches and ease of customer use, the secure I-frame CSS support that we have, a seamless integration like we’ve been speaking about all day today with your existing platforms and really the ability to call us and to talk to someone that knows your company and cares that you’re processing payments in the best way.

And I know Kim had her favorite part of the presentation earlier with that savings, but this is probably my favorite section of the presentation because SAP B1 is my baby.

This is my channel. I think Kim might’ve mentioned that I came from the integration side of things on my journey at APS Payments. And I was really privileged to have a close inside look at what went into designing this product. That means we have a lot of really cool features. I don’t want to go just down this list of each feature that we have and say, boom, boom, boom feature feature feature.

Because I truly believe in identifying the features that will be most impactful to your business. That’s really the way to go. Using an integration like ours allows you to process the best way for your business, finding the way that works for you and your employee. And SAP B1 can really be a one-size-fits-all solution because of the customizable options.

We designed our integration to match that. Everything lives within our integration, you have the ease and convenience of not having to switch applications for reporting. You go to the documents you’re already used to seeing, and you continue the processes that you’ve developed because you know your processing needs.

We have an integrated payment portal called Click To Pay that allows your customers visibility and transparency into their payment history with you. And the integration was designed to help you transform your business in the least invasive way possible. So you can let us, the payment processing experts, focus on what we know best, which is payment processing and you, the smart SAP and ERP users that you are, you can focus on running your business in the most efficient and effective way.

And the features that I’m highlighting today will allow you to do just that, reducing processing times, streamlining operations, increasing data security, improved visibility and reporting, better cash flow and customer experience, savings like Kim mentioned on B2B transactions, because our integrated refunds in our sales order and down payment and invoice workflows work to your business needs.

We have partial payments, automated workflows, and built-in security settings. It is all there for your payment processing optimization. So on that last slide, I talked a lot about customization of our add-on and in terms of adapting to your customer needs.

And I wanted to briefly touch on something that we’ve spoken about earlier today called this omni-channel payment and integrations. One of our biggest benefits of working with a company like APS payments is we’ve gone through the work to bring you some options. You know that some solutions will fit better than others.

So we decided to build out seamless integrations for the products that you know and love. And by having options and versatility in the solutions that we connect with each other, you have that ability to bridge those functional gaps and truly optimize your payment experience. So how can we, Kim and I, set ourselves apart.

I know it takes a lot of tenacity to have a defining difference when you’re looking for a solutions provider. And if you actually made it to the networking session this morning, before the speakers today, you may have heard me talk about the importance of partnerships and using your resources.

This is exactly what I’m talking about. We are your partner and we are your resource to help guide you. Yes. This is the best integration. Yes. This is the best customer support that you’ll have and the best team and the best account reps. Yes. We can save you money and mitigate risk and make reconciliation easier.

And yes, we seamlessly integrate into your business, but most importantly, we’re going to lead with education. So it really can enable you to understand how to take on these transformative process implementations and make the best decisions for your company. So Kim and I made it all the way through this presentation today.

And you might’ve noticed that we didn’t even include a demo of our solution. We didn’t show you eCommerce, we didn’t show you SAP integration. And I do want to book some time and we’ll step through all our workflows and features together. But this is why we designed something called the APS Payments challenge. Taking the next step with something is sometimes scary.

So we’re here to make it easy for you. I’m so confident that we will save you money on processing that if you send us your statements, we’ll provide you with a free analysis like the one that Kim showed you earlier, and we will go line by line together to make sure that switching to APS Payments is absolutely the most impactful thing that you can do in your payment processing journey.

And if we can’t save you money, we will give you no strings attached, $500. So as the industry experts, we will have someone available to walk you through your ideal workflow and help teach you about the best practices for eCommerce and integrated solutions. For today, that’s Kim and myself, but the APS Payments team is here to help always. No matter what your question is, no matter when, we’ll be able to help you get started on your business transformation.

Timothy Diep: Thank you so much, Hillary. Thank you, Kim. Yeah, we could carry on with the Q&A tab. If anybody has any questions, Kim and Hillary will stick around. They’ll be able to answer any questions that you have. So thank you so much, guys. That was a great presentation. And just like Hillary and Kim were, they’re part of the SAP and with the ecosystem, what’s great about the DCKAP ecosystem is that we’re able to bring in a lot of tech partners, agencies to really help you with your digital transformation.

So if you have any questions, maybe if there’s something that we didn’t really speak about for today, do reach out and we can definitely sync you up with the right partner for all that. That was a great presentation from APS Payments.

Expand Your B2B Footprint: Tools And Tactics For Online B2B Success

1) Introducing Joel Pearson, Vice President of Sales, BigCommerce (00:00-01:30)

Timothy Diep: We do have Joel Pearson as our platinum sponsor speaker. Right now, let me go ahead and share a video that we have.

This is from BigCommerce and the topic today will be about making your website your best salesperson. So it’s almost like in parallel and kind of extension of what we just had with Dave Bent. Joel Pearson is the Vice President of Sales for the Americas for BigCommerce. He brings 18 years of experience driving sales revenue, building teams, and staying focused on his customers.

He is known for his sales achievements and leadership in the SaaS industry. So Joel Pearson, I’d like to welcome you on stage and I’m looking forward to this presentation.

2) Make your website your best salesperson (1:32-03:08)

Joel Pearson: Thank you so much. What an honor to be here for now, my second consecutive year. And I’m really looking forward to having this time to share a little bit about our perspective on how you could leverage your website to drive revenue and increase conversion events and what a phenomenal job first to Cali.

I wanted to say thank you for that refreshing break in the day. And also Dave, what a great presentation, which without any practice or any awareness of what Dave was presenting, it seems like a very nice segue into the topic that we’re going to cover today. So I’m going to share my screen.

A bit of a provocative title, right? Especially if you think about somebody in a position of managing sales teams and has had a long tenure in identifying and hiring talent. So I want to say that I’m a big proponent of ‘made to stick’ and I hope this grabbed your attention.

I, by no means, believe that your website will absolutely replace the best salespeople you have in the organization. But what I do believe is that we can look at the attributes that make them your top salespeople and replicate some of those characteristics and bring that into your eCommerce site experience to drive a lot of positive results.

Now, you can imagine why we went with this title, but I just said in that second half of the sentence, too long to put on a slide, but I hope that as we go through here, you’ll see that there’s two primary areas that we’re going to focus on and what comprises great characteristics from salespeople. And then the three ways that you could apply that. In ways that will be meaningful to your online presence and footprint. So that is the topic today and we’re going to go through.

3) A brief sneak-peek into BigCommerce (03:10-06:18)

If you didn’t get a lot from the video itself, I thought if you can indulge me for just a minute or two to share a little bit about who we are as a company. So while Tim did a great job of giving a little bit of insight into my background and Tim, if I ever hire a hype man, you’re going to be first on my list. But I did want to share a little bit about our organization. And so there’s a lot about who we are that you can see represented in this slide.

In existence for a little over 10 years, hiring about 750 of the best and brightest out there present company excluded, of course. And then with our most notable accomplishment recently with getting our listing on NASDAQ, which was a tremendous accomplishment by this organization and a great job by the thought leadership and the direction that our C-suite has really helped take BigCommerce from a really a startup initiative 10 years ago to a company now that’s serving over 70,000 merchants on our platform.

But if I could leave you with two main takeaways about who we are and why it’s important is, one, we are fundamentally and uniquely positioned different than any other SaaS platform or eCommerce platform in the market today. We coined a phrase called open SaaS, and while that sounds a bit nebulous, the nuance of it is really important.

If you think about what we’re trying to convey here is that we as a platform provider are going to give you all the benefits that you would get under a traditional SaaS platform. So hosting security, compliance, bug fixes, product updates, and all those things that you would want in an eCommerce experience. But then we marry that with the best elements of what you would get from open source.

And what is that? Configurability and the ways that customize your platform to meet the unique characteristics of your business. And that is really important because we can do that at a lower total cost of ownership than anybody else in our space. And so we really have this kind of advantageous position in the market and this advantageous position in the market really also helps fuel what we can do from a B2B perspective.

I love Dave and I did not pay Dave for his endorsement of what to look for as you’re looking at eCommerce platform providers, but there were a couple of mental notes I made and ones that I think if I could give you the second takeaway would be around this concept of our relevance to the B2B merchant. He mentioned delivery of new features.

And what I really loved about that is we’re the organization that roughly year over year takes about 40% of our revenue and reinvest that into our core eCommerce platform capabilities. The other thing you mentioned was SEO. And again, I’m a bit biased, but our platform delivers unparalleled SEO capabilities.

And then this idea of customer segmentation price list to create personalization is inherently built into our platform as well. And so that approach of our go-to-market strategy and how we’ve been trying to be purpose-built also for the B2B merchant has been recognized out there and you can see that whether it’s Forrester, Paradigm, or IDC MarketScape, these are ways that our approach for the market has been validated.

4) Digital transformation- The time is now (06:20-11:09)

So with that I’m very excited to have you go through the rest of our presentation today. I’d be remiss if I didn’t jump into the elements or the considerations I want to walk you through without some additional validation around why it’s so important to take these considerations to heart as we walk through the B2B landscape and some of the current trends.

So as we kind of segue into this portion of our conversation, these are probably things that you’re pretty aware of. So I won’t belabor the point, but probably we’re spending a little bit of time talking here. So our first one here, as you can see, what a growth market it is and the B2B businesses that are moving online on a high trajectory of seeing a GMP or online revenue really excel, grow, and accelerate.

Some of this was obvious, as we look at some of the stats here, this isn’t really even taking into account the impact that COVID has done to impact or further accelerate the growth of online revenue. And by 2023, about 17% of all revenue, that’s going to be done online.

So if you remember, if any of those attended last year’s session, I talked about some of the essentials of building your online footprint or taking your business online. Today we’re going to evolve that a little bit more, but as you can see, I hope that this helps validate, the timing is right to take action.

Whether you’re going to be new to online, or you’re going to be evolving your business, the time is absolutely at hand to take advantage of the growth in the market. And Tim, I see comments and questions coming through as I can’t see specifically what those are, if there’s anything where I need to pause or do a deep dive on, please let me know.

All right. So what else I want to do is talk about the McKinsey report around the new digital reality. There’ll be a link as we send over the presentation, absolutely worthwhile looking at it. It really breaks down about nine different charts. They take you through how both the buyers and sellers are having a greater affinity for this kind of new interaction and sales conversion events that are happening in a more kind of an online perspective for that of a better term.

And so if we do really look at it from the B2B perspective, I mean, from the buyer perspective, what was really unique about as you did dig into it is even in this time where you think you’re losing some of the more hands-on approach about having your salespeople more directly interact.

What was really unique about what they’re finding out there is that people have found it easier to get information, to place orders, and to arrange service. And they just found that this ease of use has really suited their lifestyle under this new normal. And so when you think about these kinds of requirements for the new digital realities that they kind of outline there, what it really meant was that we’re seeing that more and more B2B merchants are taking a direct-to-consumer approach to their website and their eCommerce initiatives.

It is almost becoming table stakes now that this evolution from what you would expect from an experience going to anywhere from a retailer online is now what they want to see from somebody who’s more on that B2B, maybe manufacturing or distribution standpoint. What I also liked about this is that this report really breaks down the importance of serving up relevant information along the consideration cycle for your buyer.

I think Dave was even kind of alluding to some of this in his presentation as well. At the end of the day, they want to be able to easily consume information and have an easy path to purchase all delivered or wrapped in an environment and experience that is very similar to what they would see on a direct-to-consumer website.

Again, if you get the chance, I highly recommend it and we’ll have the link in our presentation for you to go out to. So when we start looking at this, now I have this provocative topic, so we have to spend some time covering it and why, I think there’s some great applicability here, but, again, if you were able to attend last year session, you would’ve known that we had a very topical story to tell last year I had the chance to present.

We were just entering this phase of the economic uncertainty tied to COVID and it was a very unknown period of time. But what we were talking about last year was we can learn a lot from history and that while the COVID was a new method of driving this uncertainty, we’ve experienced this before, we had the great depression.

We told the story around what P&G did during that time and how they really doubled down on some of their advertising efforts to position themselves as the top category provider in their spaces and now are huge giants in the consumer packaged goods space.

5) A great anecdote (11:10-15:45)

So our story today is going to be a little bit different. It’s going to be based on the experience I’ve had and the privilege of hiring one of the best salespeople I’ve ever had and then managing. Aaron is his name and for privacy purposes I won’t share his last name, but as we go through a little bit, well, I tell you the story.

As we think about our top salespeople, there are probably characteristics that come to mind for all of us. And some of those will be very specific to the job you’re hiring for. But then there are these kinds of characteristics that transcend the job that are kind of the baseline requirements for typically what you might look for in hiring somebody.

These are definitely the standards for me. I’ve even built models around it to try to get to the heart of, ‘Do they have some of these baseline requirements?’ Because they knew from my history, if I had people that fit this mold, I could produce success out of that. And so when I looked at some of those characteristics, some of the things that stood out to me were the proven track record of success. One other that was related to the industry I was in whether that was even in sales, did they have by some measure that some degree that could be measured, like history of success?

The one I love the most is the second bullet point, grit and tenacity. Hard to always uncover during an interview process. You typically would do unique things of having people tell me their life story, their history, and some of the things that go outside of your traditional interview.

So I can get a sense of their ability to really overcome situations. Are they highly driven? In sales, most of the time you’ve got coin operated machines, which is the brave thing to have because you get incentive behavior you want, but high drive is really important to me. Are they able to take a consultative approach?

I usually have people in a scenario that I’ll outline for them, take me through how they would position things with me. And more than than not the ones that are able to really spend time more asking questions, then presenting at me, have this at a high degree, that consultative approach, and typically do really well on sets.

All right. So I told you I was going to tell you a little story about a gentleman named Aaron. Well, first and foremost, Aaron was referred to me by somebody that I had a longstanding relationship with. They thought really highly of Aaron. Aaron had zero sales experience at the time. He and I were being introduced, but when Aaron did hold through, I could uncover a series of conversations with him. He had all of those characteristics that I’m outlining to the left.

Even more, he was coachable, willing to learn. Other attributes that you guys have, I’m sure also in a highly way, but as they brought in and started onboarding him, watching him grow, the two things that really stood out to me were kind of surprised areas to me. I was not surprised by the fact that it’s what you wanted in a sales person.

What was surprising for me is how quickly he was able to adapt a bit these to fruition and really make them part of his day-to-day job. Now, again, before I move onto those two qualities, if you look to the left a lot of the things that I got on there, I will immediately tell you it is hard to just ultimately bring into your site experience.

Maybe the consultative approach you could loosely tie to how well your product descriptions are, whether they convey enough confidence with people, give them enough information to make a buying decision. Maybe I can loosely make that argument where I think I’m better positioned is in these areas that Aaron brought to the table.

Aaron did a phenomenal job in every sales engagement, establishing a clear line of differentiation between what we did and how our competitors did. Maybe to hopefully do a halfway decent job. When I started doing the introduction to BigCommerce, I set that foundation a little bit earlier in our meeting, talking about how we take a fundamentally different approach to the market via open SaaS.

Aaron did a phenomenal job, always making sure, even in cases where we didn’t win, people still knew there was differentiated value that we brought to the table. And the other thing that he did is that he really aligned incredibly well with each buyer and where they were at in their consideration cycle or buyer’s journey.

And I think these are things that fundamentally can be done successfully in your eCommerce experience. Hopefully everybody’s with me so far and hopefully I dispel the provocative statement of fact that we can replace your best salespeople, but we can absolutely learn from that. So we’re going to jump in a little bit more and talk about how.

6) Tips to deliver the optimal eCommerce experience (15:47-26:22)

So, if you talk about that, Dave was also, again, we did not have to take a chance to collaborate on any of the collateral prior to the sessions today, but differentiation can absolutely be established via experience. And I think it is growing in the B2B space. It’s getting better.

We’re seeing more and more merchants really adopt this and apply this in ways that are specific to their business. But it’s not pervasive by any stretch of the imagination. And when you think about the experience of mind, you want to really design that experience with the customer journey or with them in mind.

So if you think about why this is important, I think it’s pretty stark and clear that there’s a lot of validation points out there as to why this approach matters. The reality is this is exactly what your B2B buyer is going to expect more and more. So you might as well meet them in a way that will engage them more and give them the confidence that they can move forward with purchasing yours over your competitors.

So if you look at this, what is the kind of an example that can drive this home and really increase engagement and conversion? Well, there’s multiple ways. As we go through here, this will kind of start scrolling through, but there are easy ways that you can make it really engaging for your potential customers to engage with your products of the information they need and to move on.

And again, this is a B2B example that we’re showing here. But for all intents and purposes, what you’re looking at is something that could easily replicate or be seen in any direct-to-consumer eCommerce experience. And so, again, it’s just these little shifts in how you do it.

And again, each business will be unique in how you have to apply this. So this is one example, but you can see things like this can really drive conversion on site, more time on site and ultimately more revenue events and less abandoned carts. As we look at other examples that I like to really kind of drive home is the Versare example.

They are the organization, as you can see the portable partitions and dividers and not unlike a lot of the category of service or products that you get people on this call today would bring forward. But look at the subtle things that they do from a site experience perspective, it can make it really easy for a buyer to say, ‘Yeah, I want to move forward with this product’.

You can help them along to make the right decision the first time. So you can also negate the potential of having returns and exchanges on things, because they didn’t have the experience they needed upfront to make that decision.

But simple things like being able to set a person against that backdrop, have the width and height be adjusted, the color configuration, all of this makes it really easy for somebody to get to what they need and have the confidence to pull the trigger and add to cart and ultimately make the purchase. And so beyond that, there’s a lot of other ways that you can think through it with your business.

But if you start thinking about the various sites that you shop on today from a direct-to-consumer perspective, how can you start incorporating some of those experiences into your B2B site? You will realize that there are going to be great benefits along the way, taking that approach. So this one was tying back into that overall creating differentiation through experience.

This same product, if you were buying on a competitive site where you didn’t have this level of interaction, probably won’t have the same conversion or the positive experience that we saw represented in this one. So again, make sure it’s relevant to your business, but these are just a couple of examples of how you can bring the D2C experience into your B2B site.

The next thing I want to talk about is leveraging the influence of social. Now this may seem again like you know, you may look at your brands and not think about your brands of being inherently social, but there are elements and ways that you can do this effectively, regardless of the type of product that you are either manufacturing, distributing or ultimately selling.

So let’s talk about this a little bit. I think in most cases, nobody argues that word of mouth has traditionally been the best advertising source out there. But what I will say is that social has become today’s generation’s word of mouth. And so there are different ways to leverage ‘social’.

When I first started this in one of my SaaS careers, I worked at a company called Bazaarvoice, which did online product reviews. At the time this was years and years ago, I covered the Southeast territory for manufacturing and most of the merchants that I would talk to at that time would think social was not on their radar at all.

Times have changed and it’s become really important to embrace your customer’s voice, to inspire other purchase decisions. And so beyond just reviews, there’s a couple of ways we could do it, but I wanted to start with the concept of reviews because I think it’s really pertinent and important when you think about B2B businesses.

And so again, I’ll let you guys kind of go through and read some of the data here, but I want to tell another story. During that same time that I worked at a company called Bazaarvoice, I had an opportunity to go and meet with a manufacturer in Southeast that made actuators and thermostat controls for commercial buildings, not the type of thing that immediately stands out as top of mind as, ‘Hey, that needs product reviews’.

But in having conversations with them, what I quickly could uncover is that they had a community of engineers and other people of certain titles that absolutely had an affinity for their product, but there was a whole group of people out there that didn’t want to just be told through a product page that this was a great product for them to buy.

They wanted it reinforced by others like that. When we’re talking about decisions that are going to be made on a large quantity of SKUs that will be purchased at one time, the importance of validation for getting that first your time was really critical. So it’s almost like isn’t that old concept nobody gets fired for buying IBM.

People will need that same sense of comfort level when they’re thinking about whether it’s large dollar consideration items, they’re buying huge volumes. The more that they can have other people that are like them validate that this is a good decision, the more likely they are to move forward.

So that same organization believed they had that community. I will say that the time in that company, I had some naysayers that thought like, ‘Hey, is this really the right fit for our product?’ Well, within a very short amount of time, six months from when they implemented, they collected more reviews than one of the major pharmacy types of stores that you would see out there that would have a lot more people that would congregate to their content.

Not only do they outperform them but they saw a huge spike not only by leveraging that for SEO benefit to drive site traffic engagement on site, but ultimately sales conversion. And it had an impact on AOV because it created a halo effect, even on some of the other products that didn’t have reviews on them.

So again, think about it in terms of your business. Is there ways that you can collect customer sentiment, leverage those on your product pages to increase conversion? Because when you do, it typically has a positive experience and it removes you from having to be the salesperson and lets others proactively share their positive experiences and sell on your behalf.

So that’s one aspect. Another aspect is this idea of just kind of social sharing or collaboration. If you did attend last year’s session. During my segment, I did mention this company before Fornida and they’re really cool in the sense that this is a B2B merchant of ours that sells servers and a different type of hardware for organizations.

And when you look at it again inherently, it doesn’t scream ‘social’. But what they did was something really unique. And it wasn’t what you see on the left-hand side, where you can go through all the configurations that you want for your server. That’s pretty normal on table stakes. What they did is it allowed you to take your configured product and share that out to your network, to solicit feedback and that simple step reinforced purchase decisions, reduce return rates and exchanges, and ultimately had a big impact again on their overall conversion rate.

Something as simple as just taking that step and adding that experience was transformational for Fornida. It’s something that other US merchants can take into that as a consideration as well, and look at its applicability into your business model. Then of course there are the traditional social formats out there.

And again, you may be looking at your brand and saying, I don’t think that we have any applicability here and you may not, but many of you will. There might be something inherently social about your business where things that you haven’t really thought about to make it more social, but here are the three different examples.

Farmer Boy, Uplift Desk, Avery Dennison, all of which have big B2B components to their business model. And with that, yet they’re finding unique ways to leverage things like social for their businesses. So the farm boy example is really cool. They really thought about the farm. They did a thing called Farm Fact Friday, where they really highlighted different things in agricultural use or trends within the industry to keep people on top of things and really serve as a resource to their community.

Uplift Desk does a lot of things where they can show off really cool configurations, whether that be from an office layout perspective or individual desk perspective, helping to inspire decisions and layouts for organizations, and then Avery Dennison, they do a lot around, yes, they highlight a lot of their case studies on their site, but they do a lot around sustainability.

So three unique brands with three unique deployments of how they’re leveraging traditional social formats to help one, create differentiation, two, create affinity for the brand and three, also align with their buyers where they’re at in the journey, if this is where somebody wants to engage, engage with them. So this is an opportunity to create again that differentiation and meet somebody where they’re at in their sales cycle.

7) The power of mobile (26:24-29:50)

So I think I only have about roughly five minutes left. We have one more consideration to go through. So hopefully you’ll indulge me for just a few more minutes. The last one we want to talk about is the power of mobile. Probably seems like an absolute no-brainer, but it’s something that’s not being done well pervasively across the B2B landscape.

But it can be something that you can leverage to the benefit of your organizations. And so again, you could see the mobile stats. As you look at it today, inherently more and more purchase decisions are being done by people from these devices, right?

And it’s where most people now even conduct their research all the way down through the actual purchase, which itself is being conducted from the cell phones. And so with that, it’s important to make sure that you’re engaging with people where they are. Should we go back to that sales experience? Our first one was experienced with everything that was differentiation, social creates differentiation and helps you engage with people where they may be in the consideration cycle.

This is absolutely engaging with people where they might be in the consideration cycle and how they actively buy. So I call it fish where there are the most fish. And this is an opportunity if you do it right. And you think about how that ties back to the overall experience, again, it can create differentiation for your brand as well.

So as we go through a little bit more on the left hand side is the experience that many of us at one point encountered, hopefully, maybe not where you’re seeing where your mobile experience represents today, but it doesn’t do a lot to help people with those. Remember the new digital age, easy access information, right?

Get to the purchase path quickly and have a better experience. Then you benchmark that to what’s on the right. Right. Well, I can quickly get to the content that I want to see the product category I want to dive into. And from there, the rest of their experience mirrors the ease of use you’re seeing from that front tab and this has now become the table stakes.

Whereas at one point it was satisfactory for us to have this type of environment in the B2B, you saw it quickly go away to consumer perspective. Now the expectation from your buyer today is to move over to something that’s more engaging, easier to access information for them and creates a clear path to conversion.

So, and we can see again, I can show an example of how this has been done at ResMed. They’re in the business of writing breathing apparatuses to basically non-hospital agencies. So your care facilities and some of these other organizations that again don’t look like something that is traditionally you think about having this enhanced mobile experience.

But that’s exactly what they wanted to create. So whether you’re early on the process and you need to be educated more all the way down to ease of use, to get down how it works and why this particular SKU is the right recommendation for me. There’s a lot of ways that you can go about this in a very cost-effective way than other ways that are more expensive, but just simply making sure that you’re that same degree of differentiation.

You would have your sales person on a phone. You want to create that experience in the mobile experience as well. And by doing that, it’s making it really easy to get down the purchase path. Again, it’s going to have very positive impacts on the revenue and conversion rates for your organization.

8) A warm concluding note (29:50-32:32)

Tim, I think I’m maybe at time, but I would definitely want to open it up for any questions that there were any as well.

Timothy Diep: Yeah, for sure. That was a great presentation, Joel.

Joel Pearson: Well, thank you Dave for setting the stage for me, he does such a great job.
Hey, warmed up because you guys were definitely in sync.

Timothy Diep: So that was great. If there are any questions, I don’t think any of them came in today for yours, but if you guys have any questions, do fill it out on the Q&A tab at the bottom, and then we’ll be sure to have all of our speakers answer them. So. Joel. Thank you so much. Again, thank you for the support.

We love working with BigCommerce and it’s always great to really work with you guys with all these sessions.

Joel Pearson: We value this. In the follow up through the words of Cali. Namaste everybody.

Timothy Diep: Thank you. Great. It’s great to have BigCommerce. The last event that we had with them was in LA as well. And that was great.

BigCommerce, they have some swag stuff. So, if you guys didn’t catch it from the beginning, we do have a swag box for all the merchants, distributors, manufacturers, wholesalers, and we’ll be sending those out post events. So if you didn’t include your t-shirt size or your address, do let us know right away, because we will try to ship these out maybe by Thursday or Friday.

So lots of great stuff in there. You have some of these t-shirts that we have right here, we have the rhino plush toys. So lots of great content. Again, just want to thank all the sponsors, BigCommerce as our platinum sponsors, Gorgias, Avalara and APS Payments as our gold sponsors and Dotdigital, PunchOut2Go, ShipStation, Metacake and DCKAP Cloras as our silver sponsors.

Well, yeah, that’s it. That’s all that we have for today. Looking forward to the next one. We do have events on a monthly basis, smaller ones called eSessions. So specific case study examples for B2B and distributors. If you want to even have us analyze your company and do a case study, do let us know, we would love to showcase and highlight your company.

We shall have another eSummit in April that we do two big ones every year. We’re glad for all you guys to join us for this one, and we look forward to the next one, but that’s it. That’s all that we have for now. And we look forward to another great event. You guys stay safe out there. We’ll see you soon. Bye.

How Exemption Certificate Management Impacts Your B2B Business

1) Introducing Maria Tringali, Exempt Sales Specialist at Avalara (00:00-00:50)

Timothy Diep: We’d like to bring on Maria Tringali from Avalara. She’s an exempt sales specialist with Avalara. Avalara provides end-to-end tax compliance solutions for any business, large or small in any industry. As you move more of your business online, we know there are tasks compliance concerns that should be shared.

A few best practices you can leverage to make this transition easy while creating a seamless customer experience. So Maria Tringali, I’d like to welcome to the stage and looking forward to your presentation on how to manage tax compliance when migrating your B2B business online. So welcome Maria.

2) An introduction to the significance of tax compliance (00:52-08:22)

Maria Tringali: Thank you for the intro, Tim. Great to be here. Hi everyone. I’m so excited to talk about one of my favorite subjects. So we’re going to talk today about that changing landscape and moving everything online as we’ve all been talking about today and for the past six months. But we don’t want to forget about meeting the buyer’s expectations.

And of course, I’m going to talk a little bit about some best practices for moving your business online and not having to worry so much about tax compliance. So as you already know, and everyone’s already talked about, B2B has traditionally been very labor intensive and personal and personalized experiences as these are our big customers.

We have to now move more of this business online and we need to make that easy, but we can’t forget about the tax compliance piece of it. We can’t go out and see people as often. New laws have caused us to register new states, et cetera, et cetera. There’s this complexity to moving your business online.

Let’s talk about that experience with our customers. So, I hear that a lot of people think that they don’t want to move my business online because of the tax compliance ramifications and because of the tax compliance complexity. But let’s talk about that. This is a necessity.

You got to move your business online in today’s world, whether it’s adding B2C and you’ve never done that before.
You got multi-state resellers in a manual way, but they have been able to move their mom and pop stores, their local stores to online and they love it. Their mom and pops are just loving, not having to make a phone call, go on quickly, order something at night and it’s super successful. So whatever you’re doing, tax compliance should not be a reason not to go there.

Let’s talk about why you need to think about this. It’s what any online seller needs to think about. Not just everybody thinks about it. First of all, we have to think about where we have nexus, the new laws that have come out. We have to think about those exemption certificates. If we’re in a B2B scenario, how are we going to automate that?

How are we going to get those certificates to a digital format? And out of that box, in our current world of being remote, what are we going to do with paper? We have nowhere to put it. We have to digitize this. And then of course, if there’s a B2B component to your sale, pardon me, B2C component to your sale, we have to worry about the taxability.

How do we know how our products are taxed outside of our home state? How do we know what the tax rates are in these new states? And of course, please don’t forget about the customer experience. We shouldn’t make our biggest customers have to jump through hoops to do business with us. We should make this process super easy.

So let’s go down those pillars quickly. So, first of all, if you don’t know what nexus is, nexus is the connection between the seller and the state that requires you the seller to register, collect, and remit sales tax in that state, or prove why you didn’t. And that’s where these darned exemption certificates come in.

It is the requirement of a state that you either collect tax or prove why you didn’t. And lots of activities can cause nexus. And this isn’t a nexus session. We can certainly go into that separately, if you have questions about that, but as a business in today’s world, I call it the post Wayfair world, the laws changed in 2018.

The biggest one that affected us was an economic nexus law. So it’s no longer just a physical presence that requires you to register in a state. There’s now economic reasons. Number of transactions and dollar amounts of sales and all states have a different rule. There’s only two of the 46 taxable states that don’t have laws yet.

So that means 44 of them have created laws. How are you going to remember those 44 different laws? So this is just an example of that. This is why it’s super important. I’m going to say this 37 times, if you haven’t already investigated where your business might have sales tax exposure, that should be job number one for you.

It’s really important to understand that. And then everything else follows, sales tax automation, moving B2B online. All of that follows your nexus footprint and is really important. And I know you’re going to say to me, most of my sales are exempt. Do I really have to register?

Is the state really going to require me to remit a $0 return? The answer is. Yes. So states have passed laws. Let me say that again. These are laws. I’m not making this up. These are laws that the state requires to all out-of-state sellers, whether you sell online or not, whether you just ship your items and you deliver your items.

If you cross state lines, you now have to look at the laws that state has passed. Each day has different ones. As I mentioned, all sales are subject to sales tax absent an exemption. If you can’t prove why you didn’t, you have to charge tax. It is the requirement of the state and the $0 thing. I always try to relate to just because I may not owe any money to the federal government at the end of the year, I still have to fill out my income tax forms.

I still have to pay my accountant. I have to fill all the forms, run all my reports, get all my stuff together. Even if the bottom line is zero. So yes, you still have to remit your returns. Even if there’s your dollars owed now, the frequency may be less.

It may be only an annual report, but you still have to do it. So what happens if you don’t comply? First of all states are desperate right now for tax revenue. Everyone knows that they were before COVID made that a million times worse. So much of a state’s revenue is made up from sales tax revenue, and they are desperate for it right now with all the businesses closed, lack of revenue.

My example here shows at 47% on average across the country, I happen to live in Washington state. We don’t have state sales tax. So ours is actually 53%, maybe even a little bit more. This was about nine months ago. So we have a higher percentage of our state’s revenue coming from sales tax. So Washington is going to be looking for sales tax revenue.

And frankly, they love out-of-state constituents because they’re not their constituents. If you’re selling something into the state of Washington. Washington wants a cut of that revenue. And you can get caught. So manufacturers and distributors are some of the top industries that are targeted because it’s super easy to find undocumented exempt sales.

The three most common reasons for audit triggers are undocumented exempt sales, failure to remit use tax and failure to remit tax where nexus was established, meaning you didn’t register. So it is really important and can be very costly to your business. You may think, Oh, all my taxes, all my sales are exempt, but you have to prove why you didn’t, otherwise they have the right to make you pay those dots. Just because you’re exempt, don’t avoid it.

3) Diving into the best practices (08:24-22:12)

So with that, all those sort of scare tactics, let’s talk a little bit about some best practices for moving your business online. Once you’ve done an extra study and understand where you need to register, where you should be registered and you get registered, you need to talk about automating your tax compliance.

You can’t go online with your business and not have automated tax compliance. It’s not really feasible. You need a good customer experience. You need your customers to be able to buy quickly and you want them to buy from you. So you want that experience to be super easy.

Let’s talk about what automation of sales tax compliance looks like. So it starts with your customer and I’m using our suite as an example, Avalara’s compliance suite, but the concept is the same. So the whole process starts with your customers. You probably have some exemptions certificates on file.

Now they may be accurate. They may be expired. You may or may not have them for states that you need to get registered in because you just establish a presence in additional states because of the new laws. But basically before you can automate, you have to get those certificates up to date. You need to update the ones you have, make sure they’re correct and accurate.

And any of your customers that are in other states are now going to have to either provide a certificate or pay tax. And they’ve been buying from you for umpteen years without having to provide documentation or pay tax. So you’re going to be interrupting your regular customers. So you need a platform that is going to help you be proactive and go out to these customers before you automate and say, ‘Hey, we’re automating’.

We have nexus in your state. We need to collect the appropriate documentation from you so that we can continue to not charge sales tax on your orders. So you need a platform to do this. Humans can’t do this. People think we can do it. You can’t physically call a thousand of your customers and ask them or more and ask them what form they need to submit to you and try to explain this.

You need an automated way and you need a partner to do it. When you leverage a partner like Avalara, we do this on your behalf. Hey, we’re doing this on behalf of your company, Smith company. And we’re collecting this certificate because they now have a presence. And the letter, the form letter looks like it comes from you as your information, but we field all the questions.

You need to partner with someone that knows what to collect and knows how to answer questions. If you try to call a thousand of your customers, how are you going to be able to answer questions about forms in states you’re unfamiliar with reasons you’re unfamiliar with the manufacturing exemption, in the partial manufacturing exemption in California.

How are you expected to know that? So you need a partner who’s going to help you get this right. You also need to get out of the paper world. Automation means no paper. They are just no longer feasible in our current world to collect pieces of paper over a fax machine and stick them in a banker’s box under your desk.

We can’t do that anymore. We have to be able to move these from paper to digital. I’m sitting at my mom’s desk, which is why you heard the phone. Sitting at my mom’s desk, there’s not even any paper or there’s some blank printer paper on her desk and she’s 83. We have to not have our compliance documents on paper.

They’ve got to become digital information that we can use. So once you have your certificates and your customer set in your system, then comes the tax determination piece. So, this is where tax automation comes in. So you need a certificate platform that is attached to your tax determination platform. So that as tax determination is made in a shopping cart or in your ERP, that platform checks to see if you have nexus.

So should I actually do something with this order? It checks to see if your customer is exempt. Does your customer have paperwork on file to exempt them from sales tax? If yes, it won’t calculate tax. If no, it’ll proceed with a tax determination and it’s going to tax every item on that invoice appropriately for that address. it’s going to return a tax amount or zero to the invoice for you.

But stamp all of the sales information into the platform. And that’s what enables the platform to complete sales tax returns. Now, in Avalara’s case, we complete the sales tax returns forms for you dynamically. We don’t even touch them. A lot of other companies have different processes. Ours is super easy.

So you tell the platform what returns with states you’re registered in, what returns you have to file and what the frequency is. And the software does the manual labor piece, no more running reports including. So it does all that for you and puts it on the forms and then you can do a reconciliation of the pre-filled out forms, similar to what your CPA might do for your federal income tax.

They fill it out based on the information, and then you go through and do a reconciliation of it. And then in Avalara’s case, we remit the actual returns and any revenue due to them, you would send Avalara one ACH payment. And we would have returned the revenue. So again, you need a full end to end.

A lot of people call us wanting just the sales tax piece. Just this middle piece. Well, you can see that that’s not tax compliance. Tax compliance is from customer to government. It’s not just the middle piece. So you need to start thinking in that direction. Now, I know a lot of you are saying, I have a document management system.

I scan in these PDFs and I put them into a document management platform. And there they sit. The reality is document management is not compliance management. It does not help you reduce risk in any way. It is storage of a one-dimensional document. It cannot communicate directly with your customers. It cannot identify the document for them to complete and submit to you.

It can’t validate documents. It’s literally an image. It can’t validate the document or the data on that document. It doesn’t have reporting or tracking of data on the documents. You might be able to create a report of one data point like expiration, but how do you know that’s even the right document?

How do you know you have the expiration date right? It doesn’t improve customer experience and it certainly doesn’t support compliance, workflows and audit trails. So again document management is for paper. We need to get out of the paper world and also in our remote environment, who’s collecting these pieces of paper and where are you putting them?

So it’s just not a practical way to manage compliance. And again, what I call the post Wayfair world. Pre-Wayfair, pre all these new nexus laws, you might’ve been able to have 30 or 50 certificates in a box under your desk. But now that you have exposure in 27-30 states, and you’ve got all types of forms and reasons from all types of states, that’s just not a practical way to handle these anymore.

We’ve got to turn paper into pixels here. A seamless customer experience. So we’ve talked about this a little bit. We don’t want your change in nexus and your business changes to affect the customer. The customer has been buying from you for years. We need to keep that experience seamless for them.

Sorry. Wrong way. The fact is it managing exempt customers, right? Is it managing your customers? Well, they feel burdened having to provide the right document. If they provided you the wrong one, you had to go back and ask her another one. They’re like, I have to do that again. I don’t know what I’m supposed to provide.

Wait, I gotta go talk to her accounting and they get really angry if you can’t build them properly. I know all of you have done an invoice where you had to do a credit and rebuild because you build the customer and you charge them tax and they go, ‘wait, wait, wait, I’m exempt’.

And then you have to go back and adjust that invoice. That is not fun for them. And it’s certainly not fun for you. Our frontline employees need a smooth collection process to earn the customer trust. They need to be able to do this fast. They got to make sure that they have the right certificate on file.

They don’t have any tax expertise and they don’t have time to go calling the state to make sure it’s the right form. And they don’t have time for credits and rebills. It is really important that this is a smooth process. As I’ve alluded to, you’ve got to have intelligent exemption certificate management. Document management will not work.

You’ve got to have a platform that is compliance management focused. You need to track your nexus on an ongoing basis. You may do a nexus study in the past, but what about the future? How do I know when I’ve crossed thresholds of new states? For a lot of businesses, businesses are booming. I was just on the phone this morning with the company that sells fishing equipment.

They laid off people in early COVID. Then they had to rehire them back and add more because sales increased by 30%. You don’t know how your sales are going to go. You’ve got to continue to monitor your nexus footprint. If you have to charge tax for if you’re moving B2B online, or you have partial B2C online, partial B2C sales, you’ve got to understand tax rates.

This is an example of ZIP codes versus taxing jurisdictions. Zip codes are for the mailman. So you can see in this one ZIP code, how many different tax rates here. So you’ve got to get that right. And you also have to get product taxability right. Are my products tax the same in my state as in another state?

Probably not. Service can be taxable in your home state, but maybe not in a neighboring state. You’ve got to get the product taxability right. Again, end to end compliance. And the best practice is my favorite part. I saved the best for last, the best practice here. This is one of my favorite things, which is moving exemption certificate collection to your online shopping cart.

You can actually do this. Some businesses have kind of glued this together, but if you use a platform like Avalara, you can do this in a super professional way that is going to be a differentiator for your business. Allow your buyers to submit an exemption certificate right here in a shopping cart.

So you can see, in my example, I’ve put a laptop and a laptop case in my shopping cart. It calculated $31 tax for me, but it asked me if my purchase is tax exempt right here in the shopping cart. Oh, yep. I’m a designer. I’m going to sell this to my client and it knows I’m in North Carolina because I already put my address in.

So it pulls up this portal and allows me to digitally fill out the North Carolina form, no faxing, no paper, no questions about what I submit from the buyer or from the seller. It pulls, serves at right up the North Carolina resale certificate. They launch it at the point of purchase. They complete it and it will apply and literally zero out that zero, that $31 of tax right here in my shopping cart.

You can take that one step further. Most of us in the B2B world have my account or an account where your buyers log into to create their orders. They get special pricing, et cetera. So you can allow the same experience.

You can allow your customers to update their certificates, provide new certificates, renew certificates, all managed in their account. So you can see this as a sample account. I’ve got my orders, my wishlist. And also my tax exempt certificates. So you’re pushing the responsibility of providing, updating and managing these certificates generally over to the buyer, frankly, it’s their responsibility to provide them to you if they don’t want to pay tax.

It is your responsibility to prove you had them on file, but you want to push this responsibility over to them. But in a way that’s really easy for that. Remember, we don’t want to burn. So in summary, we really want to be able to collect and manage tax compliance across all our channels, not just in our ERP, online, quoting tools.

Maybe we have multiple entities that have different accounting platforms. You need to manage your tax compliance and your exemption certificates across all your channels before you create invoices. And I’ve already said this 16 times, but we need to turn paper into pixels. We’ve gotta get out of the paper business.

It’s too risky for your business, too time consuming and too error prone. And we’ve got to remove the guesswork out of these certificates in this process. Buyers need help knowing what to provide. Usually the person buying is not that sales tax expert or an accountant really. And we need to allow your employees to have a really easy seamless process without a whole lot of knowledge and time to collect these.

So just one last thing before I turn it back over to you again, I’m going to say this again. If you have not done a sales tax risk assessment or a nexus study, I highly highly recommend that’s where you start. If you have, you should be looking at automation. Avalara has a free nexus tool online.

You can also talk to your CPA, make sure that your CPA has a state and local tax practice because of just a local CPA, normal, regular CPAs deal with income tax and business taxes, but not with sales tax and make sure you’re speaking with a sales tax expert when you do that. And with that, I will turn it back over to you, Tim. Thanks everyone for your time.

4) Concluding note (22:14-23:40)

Timothy Diep: Thank you so much, Maria. So that’s fairly paper, two pixels, right? I like it.

Maria Tringali: You got it. Exactly.

Timothy Diep: You guys are the tax experts, so I know taxes change very frequently. Avalara is one of our premier partners, if you guys have any questions in terms of taxes do reach out to them, or even for myself, I’ll be glad to do the introductions.

Again, just want to thank all the sponsors, BigCommerce as our platinum sponsors, Gorgias, Avalara and APS Payments as our gold sponsors and Dotdigital, PunchOut2Go, ShipStation, Metacake and DCKAP Cloras as our silver sponsors.
Well, yeah, that’s it. That’s all that we have for today. Looking forward to the next one. We do have events on a monthly basis, smaller ones called eSessions. So specific case study examples for B2B and distributors. If you want to even have us analyze your company and do a case study, do let us know, we would love to showcase and highlight your company.

We shall have another eSummit in April that we do two big ones every year. We’re glad for all you guys to join us for this one, and we look forward to the next one, but that’s it. That’s all that we have for now. And we look forward to another great event. You guys stay safe out there. We’ll see you soon. Bye.

How The New Normal Will Impact Manufacturers by Christine Crandell

Introducing Christine Crandell (00:00-01:07)

Tim Diep: Next, I’d like to bring up Christine Crandell. She’s the president of New Business Strategies and she’ll share with us the six megatrends that are shaping 20-21 and beyond, and the impact they will have on manufacturers and distributors. She has created measurable value for over 100 B2B private and public companies in North America, Australia, and Europe, as a recognized expert in customer experience, transformation, and strategy. Her clients realize on average about 40% to 50% increases in revenue and ROI.

So her topic today will be how the new normal would impact manufacturers. So I’d like to bring up Christine Crandell up to them, to the stage. Everybody, let me get my screen presentation set up just right. So can, can everybody see the present? Oops, didn’t do what I was wanting it to do. There we go.

Kickstarting Christine’s session (01:08- 02:17)

Christine Crandell: Tim, thank you very much, Is everything good on your end? Can you see the screen? It looks great. Thank you, Christine. Awesome. I’m like still reverberating from Maria’s presentation, which I thought was absolutely fantastic and making me think, I need to go talk to my accountant. Need to make sure everything’s okay.

Well, thank you everybody for joining in and we’re going to go through a lot of information in a short amount of time, and I’m going to be as succinct as I can. So let’s kind of start off with basically what happened. Right. You know, the pandemic has been called by lots of folks as being a black Swan event and black Swan events are seen as highly disruptive events that seemed unpredictable.

But yet in hindsight, when you do analyze them, the signs that they were going to occur have been there for quite some time. And what’s interesting when we look at black Swan and then this is very much human nature is that we often don’t recognize the significance of emerging trends and when they’re starting to come together to a tipping point.

Seeing COVID as a catalyst for change (02:18- 03:16)

So in many ways, the pandemic was this catalyst. It was this tipping point that forced, these trends that have been growing over time to actually sort of fall over that tipping point and disrupt everything. So the key is out of this Black Swan event is to start to look at well, what does that really mean?

You know, what does it mean to you? What does it mean when we look down the road? Because we don’t want to just look to the end of this year. We actually want to go look further beyond that. So I want to share six megatrends. How these came about ways affirmed a lot of future casting, which means we kind of look in our crystal ball to see what’s going on.

But, around the January, February timeframe, when it was pretty clear that this was going to happen, that this tipping point was coming in the form of this pandemic. We started looking at hundreds and thousands of signposts, trying to get a handle on really, timeframes and what those megatrends were.

Diving into the six megatrends- first trend (03:17- 08:46)

And we settled on six there- more than six, but we settled on six and I’m going to go through them. And I’m going to talk about implications to you, and I’m going to talk about opportunities. And so I’m going to go a little bit quicker. Let me just put it out there, if anybody is super interested in this I’m willing to gift to each one of you is a free session.

We’ll dive deep into this, right. So just let me know. Okay.

So the first one of the megatrends is speed. Right? Time is the competition. And what happened, pre-COVID was that. And I think we all reflect, we all became extremely busy in our lives right in our time, which is our only and our most perishable asset really did not belong to us.

It belongs to our employer, belongs to our social obligations and belongs to all these different things. And COVID when, when we were all sheltered in place actually was this massive reset and what happened, not just in this country, but actually around the world from people I’ve talked to in Russia to Brazil, to Singapore was people started to realize, wait a minute.

You know, I am not putting my time. On my own interests, my interests could be family or whatnot. So what has happened as a result of this? And again, the trend has been in place for a while is that it’s now about speed, right? How do I save customers time without segregation and quality and experience? So I now, or you are now going to compete against time and in order to fulfill those needs in the faster way, in a better, in a much more.

In a much more desirable way that the customer actually wants it. Now, this is just as relevant to B2B as it is, is to B to C. So it is a phenomenal opportunity. Right? And so let me talk about short-term civic implications flight. The first one is a flight to contact list engagement, whether you’re in hospitality, right where everything is contactless or you’re all the way in travel or you’re in healthcare, everything is moving to contact lists.

It’s not necessarily all digital. But you’re going to find that contact less engagement. The second is lights out, manufacturing enabled by robotics, right? We all get the cost, cost equation there, but then, the opportunity in that, and we’re going to talk about micro-niche markets is that you’re going to be able to have much more profitable, smaller runs.

They’re going to go to very specific audiences to take advantage of micro-niche markets, which is where the market is moving. You know, the other implication is there’s going to be this streamlined production line supported by mobile manufacturing and setting performance targets, you know, such as OOE.

The opportunity that’s in here is there four of them are new combination business models, meaning look to your left, look to your right on your industries. And if they’re serving similar or the same customer segments partner into an ecosystem, you’re going to see this autonomous Thus extend the entire supply chain in the value chain.

So again, digital transformation, we’ve had a lot of conversations today about that. It’s all about automating in order to make better decisions. The third is highly personalized products. We’ll talk a little bit more about that. And then a new thing that’s cropping up, which is this in the neighborhood distribution centers.

So you’re going to see in the interest of time, instead of having the FedEx died twice, come twice. And the UPS guy comes three times a day, and somebody else showing up that, you know, that you’re going to have these hubs that are in these neighborhoods. And it’s basically another service that’s actually going to deliver this.

But, it’s a way of streamlining the process and being able to get things to your customers faster. When we look at the next month, a trend of what came out of the past 20 years is that the power has shifted from the salesperson to the customer. And, you know, we’ve talked about this also today and that’s unleashed, you know, digital selling and digital marketing and a whole host of things.

What came out of this tipping point of the pandemic was this realization that we, as much as we are digitally connected, we are. Physically isolated. Right? And so there is, um, this desire, uh, to have this reconnection, whether you’re reconnecting to your tribe, to your community, to your family. And it’s, it has been a mind shift change that has driven through the industry that says, you know, what is now accord is having authentic connections, which is completely redefining how we do commerce.

The issue is speed and time. But the issue is this craving that we have to meet each other. Right. And how do we meet each other in a way that is safe and is expedient so three near Trump implications, but one is, it’s the resurgence of the, of the traditional sales model.

Yes. You heard me. So we’re going to go from everything, digital, digital selling, selling, selling. We’re going to go back to the other way. And we’re going to have a lot more of these personal relationships between the salesperson and, and you know, that buyer that doesn’t necessarily mean they’re going to be a person, but it’s all about, do I know what your kids are doing?

You know, do I know who this person is? I’m going to establish a relationship. So we’re seeing that rising a lot in the B2B world. So, take a little hard, look at your selling model.

The second megatrend (08:47- 09:50)

The second is one that I think we’re all feeling, which is loyalty shock. Because the customer realizes that they have different values and different behaviors now and different requirements, they are making different brand decisions happening on the B2B world, as well as the B to C world.

And so when you’re looking at churn, look at it through the eyes of what’s actually happening with that customer. And the third is we have, for years been trying to skinny down. The contact center and the sales center by automating it with chat and all sorts of other technology. Um, that’s backfiring big time, go staff up your phones.

Because customers, number one will turn to the phone. If they have an issue, they want to talk to a human beings for opportunities to condoms that are rising. The first one, the health and the caring economy. This is all about us sitting on our butts all day long. And really there’s a whole economy cropping up around that, on how to actually go serve though, serve that, those serve us in that way.

Third megatrend (09:51- 10:12)

The third is the homebody economy. We’re stuck at home. So you look at like, you know, the bikes you look at online gyms, there’s a whole economy. That’s wrapping around us being at home and that’s not going to go away just because we go to the office. That doesn’t mean it’s going to go away.

Third. Fifth industrial revolution.

We’ll talk a little bit more about that. We are in it. It’s amazing.

Fourth megatrend- bleding of digital and in person (10:12-11:48)

The fourth is a blending of digital and in-person. And what you’re going to see is when we go back into physical environments, you will have a digital experience with that physical environment and vice versa. Manifests its way in lots of different forms.

And again, happy to kind of go through that with you offline, but it’s a real opportunity where we see the line between these two worlds actually going away and then becoming one world. So third one that’s organized around the customer. So what’s happened here is. As we go and start saving time and having speed without sacrificing quality and sacrificing the experience.

What we’re finding is that it’s, we have to organize differently. You know, this hierarchical model, this, you know, perks with ranks, this command and control the centralized with decentralized execution. Doesn’t work. Right. And what we’re finding is that companies are taking a really hard look and understanding the actionably, how their customers are behaving and saying, how do I, how do I organize around what my customers want to experience from awareness all the way through purchase to post-purchase through, repeat purchase, you know, how do I actually go and organize around that?

So what you’ll start to see is a rise of these cross-functional teams that are self-governing. I’ve done it many times for companies over the last, you know, 10 years. It works. It’s just a little different from what we’re used to, but it’s totally way cool, but we need to organize around the customer three implications.

Customer implications (11:49-13:55)

First one plan for continuous change. There is no going back to the normal the way it was. We’re not in the new normal yet. We’re in the now normal to use a truck, a term that Chris Shipley uses. So plan for continuous change, right. You know, we’re not getting off of this Rocky surf boat, any surfboard any time.

Second is the rise of micro-niche markets. You’re going to find that the way you do segmentation in the past, doesn’t apply in the future. You’re going to have to get smaller and smaller and smaller, but they’re going to be more and more and more. So keep an eye out for that. And look for them. The third is cybersecurity, because we’re all digital, the number of breaches and attacks and the form of those breaches through the roof.

If your house is not yet in order on cybersecurity, you’re risking customer loyalty and you’re risking your ability to differentiate customers are buying on, on how secure their data is. So get your house in order. Five opportunities. First, one cross-industry ecosystem that serve the same customer.

Right. I have brands that I actually spend all this time with, that all came together into an ecosystem that would make my life a whole lot easier. Right. And would save me time. Right. So these are rising up in healthcare financial services. It’s across the board, get in on the game. Fifth industrial revolution.

The difference between the fifth industrial revolution and the fourth was the fourth with all about technology in front of us. Cool, cool, cool stuff. You know, distraction by shiny objects. The fifth industrial revolution takes not a technology where it should be, which is in the back as an enabler to enable humanity, to enable authentic connections, to enable a more caring and compassionate environment.

Right. I know it sounds very woo wish and age of Aquarius and all of that, but we are in the fifth industrial revolution. So got to figure out how you can play in that third, leverage your IOT data to define hyper-personalized products and services, right. That is the new direction where that economy is going.

Fourth megatrend – Rise of contactless engagement (13:56- 14:15)

Fourth is the rise of contactless engagement through AR and VR. Lots of companies are doing that. It’s totally amazingly cool business to business. Customers love it. Right? So it’s a completely new way to have them experience equipment and experience environments. And then. For you distributors out there.

Fifth megatrend – Bypassing the OEMS (14:16- 14:36)

Sorry, but the fifth one is that manufacturers are bypassing OEMs by bypassing, um, distributors and they’re going direct to the consumer. So there’s a real risk of that happening across all industries. Again, it’s about having that connectivity to the customer and being able to serve them the way, they want to be served with the experience.

Sixth megatrend- VIG vigilant (14:37- 15:58)

So next trend- if you don’t know who the bats are, Labatt is a beer and it comes from Canada. Um, and you know, they are this great example of really a virtual of VIG vigilant. Okay. Slowdown, pristine vigilant organization. That’s driven by purpose. What’s happened over the last 30 years is that we have been shifting from a long-term orientation of creating value in a long-term orientation of creating healthy businesses to where we got to pre COVID, which was the sub-session was short-term opportunistic.

Right. And that has been clear in that this trend has been now in place for a while, where we, where businesses are starting to realize it doesn’t. Work. Right. And especially post COVID we’re in an environment of change. If you’re short-term opportunistically oriented, you’re going to get crushed by that change.

So a vigilant organization or organizations in a long-term oriented. So we’re not talking about a year. We’re talking about five years, we’re talking about 10 years. They have learning cultures and their purpose is rooted in one or several of the United Nations sustainability goals. The UN STGs. Right. And so there’s a twist here.

The drive behind companies (15:59- 16:44)

And what drives these companies is their mission and purpose. What drives their market growth is that employees and customers are looking to basically support brands that actually aligned to their own definition of the purposes of their own purposes. So we have this movement happening where we’re looking long-term oriented because companies start to realize this short-term opportunistic stuff.

You know, this quarter by quarter to quarter is killing organizations. It’s the imbalance of the economy. You see it in the stock market, relatively what’s happening in the economy today. There is a, there is an imbalance there, so. From vigilant organizations, you’ve got four implications, right? This is stuff you need to pay attention to.

Four implications behind vigilant organizations (16:45- 19:00)

The first is downshifting consumerism, right? We’re seeing it. It’s not going to go away. This is here to stay. And as directly tied to the UNSDs, you’re going to see a rise of brand authenticity based on your C your corporate social responsibility. So don’t. Think this green thing is going to go away.

You’re going to see here shortly, that it’s actually here to stay. Third is looking at new sourcing models and actually help you to do, to make more local greener, greater material Kupo, which is a client of ours. We work with them on doing V1 of their sustainability sourcing. The application is a great place to go look, to see how the thought leaders were actually doing it and how they’re being adopted by companies like Ikea and other things.

Next leg of a lot easier. And the second one is, do not be surprised if you see green activism showing up in your employees and showing up in your boardrooms. Right? So what are the opportunities? The four opportunities. There’s a shift happening from quarterly performance, which we’re all been addicted to, to this medium, to the long-term triple bottom line, right?

You can’t be sustainable in the short-term. It just doesn’t work out that way. You have to have a long-term view. So you’re going to start to see this shift happening and you’re going to start to see investors actually have this longer shift. Do not be surprised. When there is a regulatory requirement and then the sec changes the filings to require a mandate or require your quarterly reporting on how you’re performing to your SDG targets.

It’s been sitting on the shelf for four years during the Trump administration, it may come off the shelf sometime in the next four years. Assuming that Biden is, you know, the president. Um, but it’s there. Right? So don’t be surprised. So get ahead of the game on this and move forward. Third circular economy, figure it out.

It’s it will drive market growth because companies are looking to do business around the circular economy. And then you’re going to see new fibers. Lots of new fibers are being developed that are specifically green-oriented that require a lot, a lot less water, um, and are just completely new models for new carbon fibers.

Optimization & speed to agility & speed (19:00-20:13)

So if we look at the next ones, the next, the fifth, megatrends, our business models are shifting from optimization and efficiency. To agility and speed. So what’s happened in the past is in the fourth industrial revolution is because it’s been technology technology technology is that we’ve been embraced so much technology, which doesn’t always play really well with each other.

And that has actually introduced rigidity into the organization. We cannot organize around the customer. Deal with continuous change in an environment where, you know, you have rigidity baked into the situation, right. Baked into the organization. So the model calls for being flexible first, the three elements to being flexible, first digital transformation, you’re going to have to redefine what it means to be an employee.

Right. And I don’t have time to talk about that, but we can offline and strategic planning. So the hallmark of, you know, to be successful post-COVID is you’re going to be organizationally aligned, accountable, transparent. And self-governing the self-governing goes back to these cross-functional teams that I talked about and is flexible.

Understanding the DNA (20:14- 21:53)

First is a way to move away from hierarchical structures and actually bake into the DNA. How to actually operate as a school efficient, respond much more quickly to, to market conditions. So five opportunities. Look at the homogeneity, that’s going on, that’s happening between urban and rural demographics, right.

In saying, how do I actually capitalize upon that? Right. You know, we are moving into a much more of the next 10 years, a homogenate homogeneous population. Right. and there won’t be these dark lines. So look at basically how you’re going to capitalize that down the road. Okay. You’re going to see the rise of apprenticeships and certification in lieu of.

For your college educations, this will change your hiring practices. This is going to change what you’re going to use as proxies. For now you’re going to measure whether someone’s going to be a good employee or not, or whether you’re actually going to bring them on as a contractor, but, you know, look at certification, look at apprenticeships, um, bake that into your recruiting model because the four-year education is, you know, in the long tail of demise, the next is you’re going to do much more accurate forecasting with multiview demand.

You’re going to also look at IoT and predictive maintenance to actually have better, you know, better, management of your, of your equipment. And lastly, you’re looking at traceability to increase, the efficiency of field service. Um, and so that it’s, you know, you fix it right the first time they’re out there.

Optimized supply chains (21:54- 23:45)

So that is, and then we have one more and I’m going to go quickly because I realized I am over. And that is something that doesn’t, shouldn’t surprise anybody on this call. And this is really, you know, this, the global supply chains are shifting to, you know, moving proximity to demand. Right? What we realized painfully were hyper optimized supply chains.

They don’t have any Slack on them. There’s no fat in them to accommodate, sudden unexpected change. And so they broke down. Right. And what, that stimulus or whether it triggered was this rise to say, how do I not only onshore near shore right now, that’s pretty much a no brainer, but basically, you know, you can look at rising of adaptive manufacturing, not just in the plant floor.

Not just out with field service right. In, in their trucks. But also in the home, right? So this is, this is massively disruptive. When we look at supply chains, that are actually elements of supply chains that are going to go away because of adaptive manufacturing and because it’s being commoditized.

Right. So in order to actually handle that and get around that and manage that, you’re going to look at saying, you know, how do I have to strategically segment my customers and how do I understand what elements of what they use and those products that they use that can actually be, you know, that actually is going to be replaced or augmented by adaptive manufacturing.

So in this, in own part of this, you know, it’s all part of speed. It’s all part of authentic customer relationships, all part of organizing around that customer. So you’ve got two near term implications. You’re going to have, you know, shorter, regional. Supply chains. Okay. We already have that today. No big surprise, but again, plan for it.

AI driven demand planning (23:46-25:26)

And the second is, you know, the rise of AI-driven anticipatory demand planning, right? So we’re seeing a lot of that happening here in the short term. So you might want to look at how you’re handling that. Three opportunities. The first is looking at the rise of new materials, especially nano nanomaterials.

Um, true game changes are happening across the world in terms of these new fibers that are coming into play. You’re going to see, um, you know, you’re gonna see the rise of new industries. So the industries that we see on the horizon that are actually growing by leaps and Browns are agritech. Right because we’re seeing the commoditization of, you know, drones and AI and Leo data, or, you know, earth observation data, um, being brought into the Aquatech world in order to improve, um, planet in order to improve your productivity.

And we’re going to see rising in med tech. The other area that I want you to take a hard look at is when we look at the rise of the next year or economy is not necessarily, China is looking at Africa. Africa is very much on the rise and is on the forefront of a tremendous amount of innovation. And this is, you know, this is the one in the next 20 years.

We’ll be the next, you know, the center of the economy. Okay. So this all comes down to really, what are you going to do different Monday morning? So I’m not going to go through all of these. Um, but let me just say six megatrends time, authentic customer experience. Um, authentic human connections, I should say, organize around the customer vigilant organizations, driven by purpose.

Shifting models (25:27- 26:23)

This is models shifting from optimization to agility and, um, and global supply chains, you know, are moving to be proximity to demand. So all of that is part of the fifth industrial revolution. Um, the question that I have for you is what is it that you’re going to do Monday? Because crises are headless to change.

And right now, right now, the powerhouses of the next economy. The era are being born. So your opportunity is like right now, all right. I know I’m over, but if anybody wants to do a deep dive and spend an hour, an hour and a half with me and kind of get, you know, and unpack all of this, you got my information, drop me a note, thrilled to actually go do this because there’s so much happening.

There’s so much goodness happening. And with that, um, Tim, I’m going to turn it over to you. And again, I’m sorry. I went over. That was great.

Wrapping up the session (26:24- 28:12)

Thank you so much. The good theme of six megatrends. That was great. Even after the summit. Love to even share the slide deck. Oh, sure. Absolutely. Thank you so much. And again, just want to thank all the sponsors, big commerce as our platinum sponsors.

Gorgias, Avalara, and APS payments as our, as our gold sponsors and digital. PunchOutTWO goes ShipStation, Metacake, and DCKAP CLORAS as our silver sponsors. But yeah, that’s it. That’s all that we have for today. They can forward to the next one. We do have events. On a monthly basis, smaller ones call eSessions.

So specific case study examples for B2B and distributors. If you want to even have us analyze your company and do a case study to do let us know, you know, we would love to showcase a, highlight your company, and then we should have another e-summit. In April that we do two big ones every, every year.

We are glad for all you guys to join us for this one, and we look forward to the next one, but that’s it, that’s it. That’s all that we have for now. And we’ll look forward to another great event. You guys stay safe out there. We’ll see you soon. Bye.

The One Thing That Every B2B Customer Wants Most by Mark Tomalonis

Introducing Mark Tomalonis (00:00-01:07)

Tim Diep: I would like to bring up Mark Tomalonis. So, Mark and I, we always meet each other at the P 21 connect conferences. The last one was in New Orleans. And then the one that was supposed to be happening this year, I guess, and due to COVID, it didn’t happen, but that would have been in Dallas, Texas. So, Mark, just bringing you up to the stage.

So, with Mark, he’s the founder of WarehouseTWO LLC. The inventory sharing software system created for manufacturers and wholesaler distributors. Prior to launching WarehouseTWO Mark had nearly three decades worth of experience working for a large industrial distribution company. With roles in sales and operations.

So, Mark, I’ll have to bring you up on stage. Thank you so much for joining us.

Mark Tomalonis- Kickstarting the session (01:08-02:19)

Mark Tomalonis: Thank you Tim. Good afternoon, everybody. Again, my name is Mark Tomalonis. My topic of the presentation is the one thing that every B2B customer wants most. And I’m going to talk about a little changes your e-commerce website that can turn more site visits into sales.

I’m going to assume that the audience here, it either has a transactional website.

Or is working on a transactional website and here we go catching up. So who’s the audience for your transactional website? I break it down into two audiences. There’s your classic audience? There’s the customers that you’ve been doing business with with, for years, even before you had a transactional website they’re probably local or geographic they’re covered by your sales team, then there’s that other audience I’ll refer to it as the internet audience, the B2B customer you’ve never heard of that lives anywhere on the planet.

These are new clients that you’ve never sold to before.

Selling and the transactional website (02:20-03:01)

Let’s consider what you’ve been selling to your classic audience. I’m going to show a chart here on the horizontal scale that is just part numbers left to right, the vertical scales. How many times you’ve sold each part number, and I’m going to sort this by the most popular items to the left, sorting down to the least frequently sold items to the right.

And if you were to take all of the sales information for your company in the past year and sorted by the number of times you sold it, chances are your distribution of sales by part number looks something like that, your most popular items, the highest philosophy to the left. The low velocity items in the middle there.

Long tail distribution of items (03:02-04:17)

And then there’s what’s referred to as the long tail distribution of items. These are your non-stock sales. Tese are the items you’ve sold once or twice a year, but this whole chart represents everything. You know what you’re selling to your classic audience, probably you stock for the highest loss fee and low velocity items.

Maybe even for some of the long tail items, everything else that you sold in the past 12 months is a non-stock sale. To your classic customers. What you’ve just sold in the past 12 months is a subset of what you might sell in the next 12 months with your e-commerce site. Again, there’s what you sold from stock.

There’s what you sold is back orders to your classic audience, but what are you offering for sale at your website? Perhaps thousands, if not tens of thousands of items, you’ve never sold before in every size, in every color with every option and in every configuration things you’ve never sold before.

Consumer finding your website (04:18-05:03)

I’ll assume. If you’re sitting on this session today, you have a fancy schmancy website with all of the features and bells and whistles that one would expect literature dimensions, and full ERP integration ability to take a credit card. And you’ve launched your website.

How does your classic audience find your website? You’re probably telling them about it either through direct marketing, direct sales field sales. Inviting your classic audience to place orders. If your website, how does the rest of the world find your website? The best way I can come up with is SEO search engine optimization.

Most popular search engines (05:04- 06:02)

So what are the most popular search engines in the United States? Google is the most popular one 88% of all searches are done at Google. In the world over 92% are done on Google. So let’s focus on your items, appearing in a Google search. How does that internet audience use Google to find you, if you are selling, branded the products, they’re not looking for you, they’re looking for a specific part number.

And if that appears a manufacturer’s exact part number. So let’s perform a search for a manufacturer’s part number at Google and see what the search results look like. I’m searching for an industrial tube fitting there’s the search results. There’s a couple of distributors here that are doing really good SEO.

Let’s see how this product is displayed at their website.

Different approaches to product display (06:03- 07:55)

The first one jumping to their website, this company is offering this product. For $68 and 41 cents and checking the availability,

if that will expand, there’s none in stock, but this is available in 17 days. Let’s look at the next sales results or search results.

And let’s jump to that website.

This distributor offers the exact same part for a little bit less, and the availability is two in stock. If that will catch up two in stock can ship in the day or two. Let’s look at the third choice, by the way, the third search results is that same company. So I’ll jump down to the fourth one. And let’s look at what this website does. This company is offering it for $56 and 61 cents. And the availability is available for backwards.

As you can see that. And finally, the fourth one.

This distributor is offering this item for $59 and 94 cents. And the availability is back-ordered. So looking at these four choices, if you’re an internet buyer and you need two of these parts and you’ve just performed the search on the part number of Google, who are you going to place your order with?

What does the internet audience want the most? (07:56- 09:30)

Remember, if it’s a B2B client, it’s not his or her money price may not be the deciding factor. Sure. This distributor is offering a lower price, but this distributor is offering it to ship today. My bet is hydrocodeine will get the order because they have it in stock. Okay. So that comes to my point. What does the internet audience really want most?

Remember, there’s the items you’ve sold. Do you have a history of selling and there’s everything else you’ve loaded into your e-commerce website? What the internet audience really wants most is everything and they want it now. I’m not the only one who has that opinion. Here’s an article from Adobe from less than two weeks ago.

Seven ways COVID-19 has changed B2B customer experience forever and item number six, the topic is last mile becomes a top priority and I will quote, someone can have the greatest experience buying the product, but if it’s delayed, you’ve just screwed up. Somebody’s business. Or in the words of the immortal Freddie mercury, I want it all.

I want it all. I want it all and I want it now. and effect on eCommerce audience (09:31-11:36)

Let’s bring up What effect does have on your business and your e-commerce audience? I’m not going to sit here and talk about whether or not Amazon use your direct company editor. I don’t care, but I do think, yeah, you should be concerned that Amazon is definitely an influencer of your customer’s expectations because of Amazon.

I think that your internet audience expects you to have everything in anything as your e-commerce website should be available to ship today. What’s the secret to Amazon’s success of having everything available to ship today. The secret is other people’s inventories. Here’s an example of where I purchased something at the Amazon website a couple of weeks ago.

And why did I buy it there? Because it was in stock, but here’s the secret. I can expand this. When Amazon took my order, Amazon didn’t own the product. The product was owned and sold by true energy, but Amazon took my order. Do you think that’s a rare event? I think not according to statistics, I found on the internet and I believe everything I saw on the internet more than 50% of what Amazon sells its website.

It did not own when it got the order. Somebody else owned it. It’s other people’s inventories. So how can you offer more inventory to your internet audience? I think you have two choices. One is to invest in much more inventory. I think that’s an impractical solution. I think a better way of offering more inventory to your internet audience without owning more inventory is leveraging.

Other people’s inventories.

Benefits of inventory sharing (11:37- 14:07)

So how do you leverage other people’s inventories? The practice is called inventory sharing is formal collaboration among a group of peer distributors who sell the same products that your company sells. So how can inventory sharing turn a site visit into an online order, including inventory available from peer distributors in your online quantity available. Let’s go back to the example where I talked about this distributor having the best price, but the availability was available for back order.

Imagine changing that message from available for back order. It just so happens that that distributor already participates in inventory sharing. So as of this morning, it knew that there were 28 pieces of this part owned by other people. And this distributor also knew that there were 186 of the main components of that product sitting in stock at the factory could have been assembled and shipped in a day.

So with this information, This distributors website could have said 28 available in one to two days, additional quantities in three days. Now this distributor would have had the best price and the best availability in a search at Google. For that part, number one, simple change to your e-commerce website can turn more site visits into sales and that simple change is offering other people’s inventory.

Without telling your website, visitor, who that person is that you have access to more inventory. So who are these peer distributors? The most obvious, uh, group is other distributors that sell the same products that you sell your suppliers, other distributors in other parts of the country. You can find those most manufacturers of online distributor locator tools.

You can also find them at national manufacturer sales meetings, perhaps somebody at your company attends those meetings. And finally, at distributor advisory council councils of those manufacturers, again, someone in your company may participate in those cans councils. You can also find manually the distributors at industry specific trade associations.

Vertical markets and affiliated distributors (14:08- 15:03)

These are independent organizations that support vertical industries, vertical markets. Here’s samples of five that I know of. There’s probably hundreds of them available for each industry that has distribution or sales. You can also find peer distributors at industry specific buying groups. These are independent organizations that help vertical groups of distributors who sell the same products to the same industry, improve their business on the left.

Affiliated distributors are probably the biggest one. I can think of covering many industrial industries of the center. When ed co is industry specific host settings and accessories and virtual rain is a very specific one irrigation system components and Christmas trees lighting. So do you participate in inventory sharing?

Participating in inventory sharing (15:04- 18:13)

Step one, identify peer distributors. Start by going to a manufacturer that sells through distribution. And get a list of those distributors or contact buying groups or trade associations that your company participates in. Step two, lead the effort. Be the communicator. Invite everybody to join you in participating in inventory sharing.

Step three, select a tool with which you can collect. Everybody’s inventory data. And then be able to download that shared compiled data that represents a virtual pile of inventory should be a private database in the cloud. It should allow for automated up-to uploading of data and automated downloading data into your ERP system.

That’s the pathway into your website and the S the tool should be ERP agnostic because not all distributors use the same ERP system that you do. So. How do you display other people’s inventory in your e-commerce website? This is a screenshot of prophet 21, customized to show other people’s inventory.

There’s a custom column here. If it says available. It means that another distributor has that product. You can click on the available and a window pops up. You can see who else has it. You can divert a backorder replenishment to a peer distributor, but once that data is in the prophet 21 system, it can then be displayed in your website.

How you do that is between you, your ERP manager and your website developer. Step three, to find a new order management process. You’re going to have to be able to identify, uh, which orders at your website or for quantities that appear distributor house and your health to figure out how to manage the process of placing the order for that product and getting it out to your end customer quickly in summary, your internet audience wants everything and that audience wants it now.

By the way. So does your classic audience inventory sharing can help you to take better care of your customers who call you in your choices for faster delivery of everything offered? There’s two ways you can do that. Either own more inventory or leverage other people’s inventory. That’s what Amazon does.

Why shouldn’t you do it?

Choose an inventory sharing tool that allows you and peer distributors to populate that database in the cloud with inventory data every night, and then download it into your ERP system who are peer distributors, they’re ones who sell the same products that you sell either represent the same manufacturer or are members of the same buying group or trade association.

Again, that’s what they have in common: manufacturers or buying group trade association. To learn more about inventory sharing. This is easy Google inventory sharing, or send an email to me. My email address is And I can give you some suggestions on how to start. Thank you for your time.

Wrapping up the session (18:14- 20:15)

Again, my name is Mark Tomalonis and I’m with a company called WarehouseTwo.

Tim Diep: Thank you so much, Mark. That was great. Lots of practical tips for, for B2B distributors, so great stuff. And hopefully all the other distributors from the attendees were able to, capture a lot of these beneficial highlights. So thank you so much. And again, just want to thank all the sponsors, big commerce- as our platinum sponsors.

Gorgias Avalara and APS payments as our, as our gold sponsors and digital PunchOut2Go, ShipStation Medicake and DCKAP CLORAS as our silver sponsors. Yeah, that’s it. That’s it. That’s all that we have for today. The can forward to, uh, to the next one. Um, you know, we do have events on a monthly basis, smaller ones called eSessions.

So specific case study examples for B2B and distributors. If you want to even have us analyze your company and do a case study to do let us know, you know, we would love to showcase and highlight your company, and then we should have another E-summit. In April that we do two big ones every year.

And, we’re glad that for all you guys to join us for this one, and we look forward to the next one, but that’s it, that’s it. That’s all that we have for now. And we’ll look forward to another great event. You guys stay safe out there. We’ll see you soon. Bye.

Conversational Commerce Tactics for DTC Brands to Increase CLV

1) Introducing Billy McClennan, Strategic Partnerships at Gorgias (00:00-01:16)

Timothy Diep: I’d like to bring up, uh, Billy McClennan from Gorgias. He’s going to close us off for the eSummit and as I mentioned before, we have lots of great content. We will be recording all these sessions along with other on-demand content from our silver sponsors. So just be on the lookout for an email or even some more content to be available for you guys.

So in terms of Billy, he manages the strategic partnerships for Gorgias on the West Coast and Asia Pacific regions. Prior to joining the Gorgias, he helped scale Humon, an MIT founded direct-to-consumer brand, scaling the company’s revenue by 30% month over month. He loves helping brands that design great eCommerce experiences and other digital advertising, set up logistics, operations, and build strategic partnerships with international distributors.

And today he’s going to be talking about conversational commerce tactics for direct-to-consumer brands to increase customer lifetime value. So without further ado I would like to bring up Billy and look forward to listening to his speech.

2) A brief note on Gorgias (01:17-03:00)

Billy McClennan: Yeah. Well, I appreciate being here. I know I’m the last to talk.

I’m sure you guys have seen a lot of great content throughout the day. So, I’m trying to make this really exciting. Essentially what we’re going to talk about is we’re going to shift gears a little bit. We’re going to focus a lot on customer support and customer experience specifically around the holidays because we’re two and a half weeks away from Black Friday, Cyber Monday, and Christmas.

Again, Tim already gave an introduction, so I think I’m going to skip this, but yeah, I manage our partnerships team for APAC and also the West coast. And then, just before it begins, so you guys can see where I’m coming from just to give you a little bit of insights about Gorgias.

So Gorgias is a help desk solution specific for eCommerce. So what that means is we bring in all of the communication channels that a brand is communicating with their customers online. Of course, things like email, phone and live chat, but then for D2C, more transactional channels like SMS, Facebook messenger, your ad comments, organic comments and things like that and then we fully integrate with your eCommerce platform.

That can be Magento, Shopify, BigCommerce, and things like that, so that we have all of that data in one place. And then your agents have access to everything. They need to really streamline those communication processes, automate a lot of it and just provide a better customer experience. We work with close to 4,500 merchants now of all sizes from the startup where the founders are answering their customer support to brands like Steve Mann that have 100 plus customer support agents on their team.

3) Diving into the topic (03:03-06:22)

Let’s jump into it. I’m just looking at some data from 2019 Q4. Basically what we saw was about a 2X increase in support volume starting about the beginning of December ending around the Christmas holidays. Basically like forecasting what we might expect this year, but yet you typically see an increase in customer support volume this time of year, since obviously with more orders comes more customer support.

And then if we look at more recent data and we look into the start of the pandemic, skipping that little dip for a couple of weeks in March, there was about a 2.5 X increase in order volume across the brands that we’re working with.

So obviously everybody kind of jumped to purchasing online and the promising thing for those of you who are excelling in D2C or shifting to D2C is that growth basically plateaued at a higher level than what order volume was prior to the pandemic. We’ve jumped 10 years ahead in terms of shopping online and the market share of retail that has.

And basically because of Q4 and because of everybody’s shopping online now we decided to do a little bit of a study to kind of identify what are the types of questions that consumers are asking. And so, interestingly enough basically 50% of the tickets are typically order related.

So when I say order related, that can be your order status, ‘How can I return? How can I exchange?’, a lot of those post-purchase customer support related questions and then also shipping delays. So of course during the pandemic, there were a lot of citations for COVID-19 causing shipping delays.

You’re going to get a lot of those as well and you’ll see that a lot of brands online are basically setting expectations, they’re basically setting earlier dates for you to order by this date to receive by Christmas. What does this mean for your support team?

It means of course, on the left side, this is ticket volume again. So it means basically that 2X increase that I’m talking about support volume, but the right side here, these are the number of active agents using Gorgias to manage their customer support. You can see that brands are 2Xing their staff.

This means that agents are going from maybe 40 to 50 tickets per day all the way up to 100 tickets per day during peak season. And so there’s, I guess, a couple of options here. You might be thinking that we need to hire extra staff to be able to manage this increased workload, but the good thing about what I said with the repetitiveness of customer support is that you can definitely take a look at how efficient your team is and see if there’s room to kind of optimize those processes before you necessarily need to hire more staff for the season.

Now you might get to a point where you are very efficient and inevitably like because of that 2X increase, you might have to hire a few extra staff, but ideally it’s not 2X. You can see here, this is about a 20 to 25% increase in active users to manage a 2X increase.

4) Insights on enhancing customer support (06:24-13:25)

The first half of what I’m going to share with you guys are just some tactics that anybody can take, not just Gorgias customers, in terms of improving efficiency. So, how to handle more of that volume without necessarily hiring and also kind of how to forecast, how can you project, how much support you’re going to get so that you’re actually prepared. Because if you’re not prepared, customers will be waiting for long response times and things like that and it’s going to create a bad experience for them.

So, the first half is going to be on how to prepare. And then the second half, I’m actually going to talk about a more sales driven approach. One of the benefits of customer support is you’re talking with more customers. And so if you’re talking with more customers or people are asking pre-purchase questions about gifting and things like that, there’s more opportunity to actually drive sales.

In certain cases, you can increase the conversion rate into the website significantly when you’re actually communicating with customers versus them shopping alone in their websites. We’re going to talk a little bit about that and kind of how to do that on the different channels that a lot of eCommerce brands are talking with customers on.

So the first one is basically templated responses. We call them macros in our platform. So if you have another help desk, you should have some form of template or some sort of macro. I would say that you should have a macro for every single repetitive question. If someone asks the same thing and it’s happening more than once, you should have a templated response because you can click that response once and you can send it.

If you don’t have a help desk and you’re just starting out, use a Google doc or if you’re using a project management tool like Notion or something like that, have all of these templated responses ready to go so that your support team can copy and paste them.

This example here is we’re basically connecting with their eCommerce platform. So in this case, it’s Shopify. This is somebody reaching out saying, ‘Hey, can I get an update on my order?’, which could be like 10% of tickets for a lot of brands. And because we’re integrated, we’re actually automatically pulling that order information, tracking information in.

So they don’t need to copy and paste that as well. And then the second point here, and I’ll get into this during the second half as well. Instead of just answering a customer support question, you can start thinking about how you can create a call to action on this request as well. So one, you can use the macro to give them their answer really quick.

The second part of this macro you can see here is we’re actually embedding their loyalty points. So in this case, it’s with a smile, but if you have loyalty points, we’re saying, ‘Hey, did you know that you have 230 points available in your account? Don’t forget to redeem them here.’ So now you’re giving them their support information very quickly.

But you’re also creating a call to action back to your website to hopefully get them to purchase again with you. So it’s not just answering a support ticket, you are potentially working towards converting them into a second sale. And then, automations. I think if you have the ability to use automations to really streamline your flows, you should definitely look into that.

This one is an example of auto replying. So basically, we’ll get into the weeds here but if somebody is reaching out about order status, detecting that and automatically giving them that information, now you’re mitigating the need for your agent to even respond to that ticket. So if during the holidays, that’s 5% of your tickets,that’s 5% less tickets that your agents have to be able to handle.

And then this is really focused around data. As every part of your business data is extremely important for customer support as well. So this would be using some sort of tagging system so that when a ticket comes in, if you can automatically tag it with the type of ticket, your agents already have a little bit of information before they even click on it. That’s the first thing.

The second thing is you can track overtime very quickly, issues or things that are happening within your business, not only just customer support. Let’s say you’ve launched a new product for the holidays and then all of a sudden, you’re getting 15% more tickets coming into a damaged product.

And you nail that down to be that new product that you launched. You can then go to your manufacturer and say, ‘What’s happening? Is product seven damaged? Is it shipping? Is the product just effective?’ Things like that. So very quickly you can identify things that can have a significant impact on your business if you can track the types of questions that you’re getting.

And then finally, just another tip when it comes to customer support is it’s not just your support team. It should really be collaborative. Almost every team in your company should have a hand in customer support. Your customers are the people who are driving your business and so everybody should be working with them.

So basically in this example, your support team should be in the same place that your sales team is. So if someone reaches out via a comment or Facebook messenger and email at the same time, it’s all in one place. You don’t have two different agents saying potentially two different things on two different channel channels.

You can kind of bring everything in the same place. And then in normal times, if you’re still doing retail, have your order and your sales teams in your help desk, so that when people are reaching out about these wholesale inquiries, you can automatically route those tickets to the right team.

So there’s less handoffs. And then finally, you might look at your numbers to say, ‘Hey, we need some staffing’, but how do you know if your team’s operating as well as they can be? The first place I would look at is historical data. So look back at last year through your eCommerce platform and look at two things: look at how many orders you got maybe in Q4, and then look at how much support volume.

If you have that data you got over Q4, then you can basically get your ticket to order ratio. So you can say for every five orders I get one ticket. And then based on your projections this year for the number of orders you’re going to get, you can say, Okay, I know that I’m probably going to get this many tickets.

My agents are right now handling this many tickets a day. I’m two agents short, or you could say, my agents are basically handling 60 tickets a day. How can I pump up their productivity to 80 tickets a day? And I’d say it really depends on the business and then how you interact with your customers.

But I’d say like something that’s pretty healthy is 80 tickets a day. You can definitely get up to a hundred tickets a day, but it really depends on the kind of questions. Start with identifying ways to optimize and streamline those processes. And then second, look at the lots of great outsourcing companies and you can hire two or three agents for the holiday season, if you’re very seasonal.

Just like that first slide I showed you with the loyalty points, embedding that stuff into your responses, I’m just going to focus on driving revenue and basically give you some data on how important your support team is, with regards to the success of your business during the holidays.

5) Quick response is the key to growth (13:27-23:52)

So what we see is that the conversion rate on more transactional channels like live chat or SMS, if you respond within less than 10 minutes to pre-sale chat. So if someone is reaching out, they haven’t purchased, let’s say within the previous month, if you respond within less than 10 minutes, we see on average, a conversion rate so into a customer about 28%.

So 10 minutes is not that fast. Obviously there’s brands that have like 24X7 live chat, but we see 20% on average within less than 10 minutes, which is of course, if that’s much higher than your website alone, like eCommerce websites are converting at 28%.

Most of the time, it’s a couple of percent. So yeah, just to show you the impact that can have on your business. This is a real example of a brand last year on one day, December, 2019, and you can see here 500 presale tickets almost. They converted 47% of them and they generated $23,000 in sales from presale inquiries.

You can look here. The first response time is two minutes. So there’s a direct correlation with response time and conversion rate. If you’re on a live chat or SMS, those are conversational channels where people are expecting a response pretty quickly. So if you can get to them as fast as possible, the likelihood of converting them into a customer is going to be much higher.

And realistically, the same goes for most channels, even email. If someone reaches out with a presale question on email, If you can get to that pretty quickly as well, the likelihood of them purchasing is higher than if you have to wait like 24 hours or 12 hours because they might find the answer somewhere else with another competitor.

This one’s very intuitive. I’m going to talk about a few channels. It’s definitely not inclusive of every single channel out there. I think just some of the most common ones, but yeah, of course, try to open up as many channels to interact with your customers as possible, keeping in mind that each channel, you know, consumers interact differently with each channel.

It’s different types of consumers, different age ranges, demographics, things like that. So you want to be able to keep personal and you wanna be able to handle these different channels that you’re opening up as well. And so always start with live chat because I think a lot of people who are listening might have live chat on their website.

I think you should definitely consider it, especially at least for the holidays. The point that I want to focus on here is you’ll see a lot of brands with live chat on their website. There’s a little bubble in the bottom right or left hand corner and you click on it and it’s either a contact form or a, ‘Hey, let us know if you need anything’. And then if you go from the homepage, to a product page or the cart page, the same live chat is there, but you can use live chat differently on different parts of your website more than ever to try to kind of mimic the in store experience.

So, basically proactively targeting people with relevant information. So when someone walks into a store, brick and mortar usually have a sales associate greeting them, letting them know of company-wide sales, just anything, a soft welcome, and you can do the same thing on your homepage.

So basically have a chat that pop-up says, Hey, let us know if you need anything or, Hey, we have a site-wide sale for the holidays, things like that. But once they go back to in-store, once they’re shopping and they’re either actually looking at products, they might have questions about it.

You’re helping them try things on whatever, depending on the product you have. It’s going to be different, your sales associate is going to react differently than when they first walk into the store. And so with your live chat, you should do the same thing. If you’re on a product page with a pair of shoes, for example, if there’s something really compelling about those shoes, how they’re made, whether it’s sustainable or organic materials, things like that, or even if sizing.

So let’s say your sizing is a bit unique compared to what they’re used to, if you can proactively say, Hey, just so you know, like you just chop half a size up. What that does almost immediately is it reduces the number of returns and exchanges that you’re going to have overnight because now people are going to be shopping and getting the correct size.

Whereas if that’s not obvious on your product page or you’re not proactively letting people know that then you may be costing yourself some money and some returns down the road. And then on the cart page, when someone’s checking out in store, that’s when you’re opting them in for loyalty, capturing their email, things like that, creating urgency.

So with live chat, you can do the same thing. When they’re on the cart page, if they’re stuck there, you can say, if they’re on our cart page for 10 seconds, automatically target them with free shipping or an extra discount code or something like that, to help them through that buying journey.

And then, Facebook messenger. So this channel, I think a lot of brands mainly use it as a support channel. There are some sales tactics and some tools that you can use out there to focus on sales. I like to show this example right here because this brand is really engaging their consumers, their prospects, basically by saying, ‘Hey, chat with us when you’re shopping, we want to help you’, so that they can help convert the sale because the conversion rate is higher. So click the messenger Facebook ad, get the Facebook messenger incentive of a discount code. Once they click on the discount code. You can see here, this live chat, what I was telling you about, it’s going to pop up and say, Hey, let us know if you have any questions.

So they’re basically saying on Facebook messenger chat with us, get a discount code, and then on the website, Hey, chat with us again. That’s just a unique way to kind of train your consumers to chat with you if you have the bandwidth because your customer support agents know your products very well and they know how to help sell them as well.

And then again, get your offers out everywhere you possibly can. Not just on your Facebook ads or email flows. Again, coming into customer support, if someone’s reaching out to you every single ticket that you get, when you talk to a customer in the signature of your support agent, you should have your sale that you’re going on a discount code.

You could even go as far as having a unique discount code per agent. So you could track the success of each agent. Not only on their customer support metrics, but on, you know, if they’re selling and then when it comes to comment moderation to make sure that you have something in place to get to comments just as fast as you can with things like live chat and SMS because I see lots of great comments on threads and no responses.

People asking, do you ship here? Can I get a discount code? Do you have this color? And if you don’t get to those quickly and effectively, they’re going to leave, they’re not going to see your ad again or they might’ve purchased at another point. And if you have 20, 30 ads running, it’s hard to go one by one through them.

So there are tools out there, but try to think of comments as you know, there’s priority comments, there’s comments that are just, you know talking to their friends that might not need a response, but there are social leads. So people asking pre-purchase questions on your comments, there’s negative comments, those that hurt the performance of your comments.

I’d recommend identifying those and addressing them publicly as fast as possible and not necessarily hiding them. The engagement is still good for Facebook algorithms and then social questions. So people are asking, especially more than ever customer support questions on your ads. They might say, Hey, I purchased a month ago. It still hasn’t arrived. You need to take care of those people as well. They’re the people that have already purchased from you.

And then finally SMS. And I don’t know if I have the ability to do a poll, but Tim, if you want to add a poll, I’d be curious to know who’s actually using SMS. It seems a lot of brands have gotten into it this year.

There’s a lot of money that has been raised by some of the SMS platforms. Attentive has raised a lot of money. Postscript has raised a little bit of money. Yotpo acquired an SMS company and Klaviyo’s now getting into SMS. So, the reason for that is because it’s a very ROI driven channel and it’s very transactional.

So it’s obviously very similar to email where you’re sending out campaigns a little bit more compliance. So you gotta be a little bit more careful not to spam your list because it is pretty personal, but you can see here, when you send out a campaign, people are applying back with things like, Hey, can you send me a link, in this case, both the bracelet earrings.

It’s very transactional. People are going to purchase directly from these. And so, I’d recommend getting on SMS or at least starting to build your number list. So if you’re considering it and then connecting it with your support team, for that response time factor, we had said 28% conversion rate and less than 10 minutes.

If someone’s reaching out to you asking about purchasing, if you can respond to them, instantly essentially, or as fast as you can, the likelihood of converting them is going to be much higher. And then, finally this one is kind of an upsell example. This is a brand who’s combining a few features.

So they’re using those templated responses and you can see that there’s like seven or eight templated responses. And so in this example, someone’s reaching out and they said, Hey, I received my product. It was damaged. And then they’re using a template. So this is very quick, it’s one click.

They don’t even have to think about it. And they’re saying, Oh, Hey, sort of see that like send us a photo of the damaged product. Here’s how we can exchange it or return it for you. And just so we can actually give you a discount on some additional product or the premium version of the product.

And then the, basically the customer is saying, Hey, here’s the broken one I’d like to upgrade. So now they’re turning a return or exchange into an upgrade. So they’ve just upsold that customer. And then finally, just summarizing, I’ve said it a lot, but I think conversion rate on chat, if you’re using live chat is going to be a useful metric, especially for the holidays.

First response time is probably one of the most important when it comes to conversational commerce and transactions. And then just like other things you can do that we chatted about, if you can look at the success of individual support agents, who’re converting at the highest, who’s selling what, breaking down their tickets to see why they’re doing such a good job. You can use that to train the rest of your team.

6) Concluding note (23:54-25:58)

That sums up my talk. If anybody wants to talk offline, you know my email, it’s very easy. It’s just We’re happy to chat with you guys about your customer support set up, and do an audit of your current setup, see if we can help you guys kind of optimize for the Black Friday, Cyber Monday weekend. And that’s it from me, Tim.

Timothy diep: Thank you so much, Billy. Absolutely great strategies, even as Black Friday, Cyber Monday is coming up too. Yeah, lots of great stuff here. And really the key is automation, right?

There’s going to be a lot of tickets coming in, just got to make sure that these are kind of running on autopilot. Billy, thank you so much. We love partnering with Gorgias. You guys have been very supportive for all of our events and just looking forward to many more events in the future.

Billy McClennan: Sure, absolutely. Thanks so much. I look forward to being a part of the next one.

Timothy Diep: Yeah. Alright Billy. Thank you so much. And that is it. We are concluding our eSummit. Again, just want to thank all the sponsors, BigCommerce as our platinum sponsors, Gorgias, Avalara and APS Payments as our gold sponsors and Dotdigital, PunchOut2Go, ShipStation, Metacake and DCKAP Cloras as our silver sponsors.

Well, yeah, that’s it. That’s all that we have for today. Looking forward to the next one. We do have events on a monthly basis, smaller ones called eSessions. So specific case study examples for B2B and distributors. If you want to even have us analyze your company and do a case study, do let us know, we would love to showcase and highlight your company.

We shall have another eSummit in April that we do two big ones every year. We’re glad for all you guys to join us for this one, and we look forward to the next one, but that’s it. That’s all that we have for now. And we look forward to another great event. You guys stay safe out there. We’ll see you soon. Bye.