As we mentioned in the recent Distribution Strategy Group  article How to Build a Doomed Website, the future is now and digital capabilities are essential. Yet many distributors still don’t see the value of investing in a high-quality website. This episode delves into why and how distributors build the wrong websites. 

Distributors are looking for the payoff in an ecommerce investment and, if they don’t see one, they count it as unsuccessful. The problem with this way of thinking is that if distributors make plans based on forecasts that show limited ROI, they might decide to spend less and limit the site’s functionality and integration, dooming themselves from the start.

If you let potential ROI determine how much you’ll invest in your website and how you’ll measure its success, you’re going about it all wrong and you will not succeed.

A proposed website budget shouldn’t be treated like other capital expenditures because most ROI models can’t measure the effects of eroded long-term competitiveness from a failure to invest. This equation doesn’t account for the fact that digital capabilities are simply a survival requirement.

And since the COVID-19 crisis, it’s increased even more as customers have moved online out of necessity. This risk is not worth taking.

ROI models also typically don’t account for revenue results outside of shopping cart revenue. If you have a great e-commerce site with lots of information and customers are using it to research before ordering via a different mechanism, the e-commerce initiative isn’t getting proper credit for the potential revenue it’s bringing in. Customers may search online and then call in or talk to their account manager. Or they may be getting product data from your website to put together bids. None of that potential revenue is credited to the website in a standard ROI model.

Sometimes your capability requirements are defined by what competitors offer – not based on whether an ROI model can prove closing gaps is a profitable decision for your firm.

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