Podcast

The 8 Stages of Industrial Websites, Part 2

In this second episode of our eight Stages of Industrial Websites podcast, we get deeper into how digital can help streamline the sales process for industrial manufacturers. We specifically discuss CPQ tools and how the new millennial buyer of industrial B2B products and solutions expects to have a largely digital sales experience.

Full Transcript

[Music] Welcome to the Solspace Podcast. Thanks for listening.

Mitchell: Welcome back to the Solspace podcast. We're resuming our conversation. Scott Hutchison and I are talking about a guide that I wrote regarding the eight stages of B2B industrial website evolution.

This is something I wrote after attending a trade show, a robotics trade show in Santa Clara, California, a few weeks ago. And in that trade show, I went and interviewed a bunch of these different types of industrial manufacturing businesses. Of course, these are specifically in the robotics space. And I was quizzing them about their use of the web as a sales tool.

I kept saying, "Look, you could use the web to streamline your sales process. You don't have to repeat yourself over and over again to every customer that comes to you. The web can do the repetitive work, and by the time you're in a conversation with a client, you can be talking to them about what their real problems are and the intricacies of the solution they need, and you can custom tailor things. You can do the human stuff.” And I encountered a lot of different answers to the question of how are you using the web to sell, and it made me write this guide.

In the previous episode, we covered stages one through five, which started at 'you got nothing'. You don't have any website to 'you got a WordPress brochure website' to 'you got a brochure website with product pages and PDFs' and so on and so forth until you land on a website that's actually starting to integrate with other systems, capture leads and push them into a CRM, grab information out of an ERP in some cases, maybe even sell parts online. And now we're moving into some more sophisticated stages. Stage 6. So in stage 6, you have a, you have a full CPQ system or at least a CPQ system that's capable of selling your most common solutions and offerings online to a customer. Now, they're not necessarily going to buy online. They're not going to pay $100,000 for an assembly or a rack system or whatever the case may be for a given manufacturer. But that customer can fully educate themselves before talking to the sales team. They can configure, they can price, and they can get a quote.

And then they can talk to the sales rep about, "Hey, we have this one thing I wanted to ask you about in our factory. We have a low clearance in this one area. Is this thing going to fit?" Those kinds of things you can get into with your sales team. So stage six is CPQ. And Scott, maybe we can talk about why CPQ is interesting, why it matters.

Scott: CPQ is gonna be Configure Price Quote. That’s what the acronym stands for. And I think that so many of the businesses we work with in the industrial space, this, the most important word here is that configure word. We've done some work with clients on configurators, of course, and seen how excited they were when they finally got to this stage, because most of this work, like we said, is not selling T-shirts, even though there is some configuration to a T-shirt. Let me pick a color, a size, I'm gonna pick what level of shipping I want.

Everyone's used to online shopping and that, that is sort of the most simple version of what that configuration could look like when you're talking about an item. But of course, the type of clients that we serve and the ones that you're, you'll be meeting with and you've met with at, at trade shows, the configuration here can get pretty complicated.

And I think getting into this stage is definitely something that, if you are not, if you have not progressed through the other five stages, something like this could seem pretty intimidating because I'm sure that clients and businesses that have certainly fairly complicated product sets and product sets, we talked about them being complicated being high risk, meaning that the buyers have to get these things right.

You have to know that you're getting the right robotic arm or the right robotic arm part replacement. These are things that are really critical. And to get that quote, the price and the quote part of this to get that so that it doesn't it's gotta be accurate. Right? You don't want the salesperson to be like, “Ah, yeah, that's just what the website says.”

But getting this configuration part of it really figured out I think could be intimidating because businesses know that it's so critical, but this is something that I think we've seen that the users of their service are really eager to dig into. And you mentioned in the last episode about this is a millennial mindset and that this configure price quote technology and implementing that on a website to an, an older maybe a less technologically adoptive generation could seem like overkill, like, "Oh, I don't have to bother with this." But that, that 35 year old buyer they're pretty interested in this. This, this allows them to start getting meaningful work done while using your business's website.

Mitchell: And it's available anytime. I mean, this is the old promise of the web is that that thing is up and running. You don't have to wait for the sales team to, to wake up in their time zone to have that conversation with you. Another interesting thing about stage six in this, we learned this from one of our clients. I mentioned on the, on the previous episode in stage six, you're seeing how your willingness to adopt digital, to adopt using the web as a sales tool, imposes itself on your business.

We see this with all of our clients. When we encounter something that the website could do, it's not doing yet, it could do, but you have to change your business model a little bit, or you have to change your product offering a little bit. We talked to one of our clients and what he described in preparation for doing the web work that we did when we built a CPQ system for them from scratch.

They had to change their product offering. They had to set it up so it was more capable of being configured and priced and quoted online. In other words, they had to, they had to streamline their own business, their own sales offering, reduce the friction in their own process of solving their customers problems so that these things could be made available online.

Now, this was the transition between a boomer owner and a millennial owner. And the millennial could see the future, could see the promise in these technologies and knew it was worth going to the trouble to doing it. As far as I'm concerned, their business has exploded compared to where it was, and it's largely because this owner had some understanding of digital.

This, this owner even participated in the build. Like, this guy can actually code on the weekends. He can write, he can write website code. So he knew what we were talking about and he knew the questions to ask and he knew when we said, "This won't work in a form, you can't configure this on a website, it's too gray, there's too much gray area here."

He knew he needed to go back and sort of restructure some things. And this is another way to emphasize in stage six, you don't have to sell everything online. Not all of it has to be available on the website, but there is, there's a subset of what you offer that can be put on the web and you're going to streamline that sales process when you do.

If you see a return on that investment, put a little bit more of your offering online and tune it and shape it so that it can be sold on the web at scale. This is one of the interesting things as you move into stage six.

Scott: Yeah, the set that scaling that is interesting, especially when it comes to something like this because this is the first stage where I think you're getting what could make a salesperson get really nervous.

This is that stage where they start saying, "Well wait a second now, " when it comes to configuring the right set of products or parts or whatever for a client, they think, "Well, hey, that's, that's my job. Like, wait a second. What do I do now? Because that's what I do." So many years ago, because Mitchell, you and I have been bumbling around in this industry for a long time. It was technically, it was 1999, just into the year 2000, and I was involved in a pretty small startup. Because if it was 1999 and you're anyone, you were probably involved in a pretty small startup because it was that first dot com boom and everyone was trying to do something. And this one essentially involved what I was now seems archaic, of course, but it was a touch screen monitors, like touchscreen kiosks that would sit in a hotel lobby and help people find their way around that extensively the downtown area that hotel was in. But of course, this is well pre-iPhone. MapQuest was just beginning this type of online mapping.

It's all second nature today, but of course it didn't exist then. And our assumption was that if we were able to make these kiosks and have business listings in them that gave people a directory surrounding in a certain mile radius of the hotel that these things were positioned in, that that would serve a market of what we will call less sophisticated hotels. Maybe, what we now think of as a Holiday Inn Express or a Days Inn or something that might be more of a motel that did not have a concierge service. And we thought, “Oh, well, the big hotels, the Weston downtown, they've got a team of concierge service people who are ready to help people. We're going to serve something to the people, sort of be disruptive. We're going to serve it to someone who doesn't have this.”

But once we started doing our market investigation, actually talking to these people, we found out that it was actually the nicer hotels that were most interested in this type of service. It was actually at Marriott, and he said, "This is pretty interesting because my team of concierge customer service people spent a lot of time answering the same questions over and over again. Where's the best dry cleaner? Where's a good steakhouse? How do I get to this particular place?" He said, "What they really want to do is be the hero and come in and help a, a guest with something that's like, 'Hey, could, could you get me tickets to that basketball game?' Is that a thing I can do? I've got a client in town. I just found out like, can you do that?” “Hey, let me, I've got some connections. Let me do that." And then they spend that work helping with this really complicated problem.

And to translate that back to what we're talking about, I feel like we're watching the same thing kind of happen that if you've got a sales team that is sophisticated enough and that understands what a really talented salesperson is capable of doing, they'll start seeing that, what I've got, even if it's the same customer, let's take these simple transactive processes. Can I put those on the website? What I really want to do is have someone call me up and say, "Hey man, I've got this big problem. I've got, I've got to ship stuff to two different locations and I've got to do this payment plan because of, of, this government contract and it's a, it's a pretty sticky problem." That salesperson would go, "I gotcha. We're going to do some human to human conversation and we're going to figure this out. And I have the time to do it because I can spend time on this high value, high stakes conversation, because I know that the website is going to be able to take care of really simple transactions."

Mitchell: The irony of stage six is that the first CPQ system we built was from the sales person at Burl Audio.

So we have a case study on our website about it, but Burl Audio is a relatively small company. They sell specialized audio equipment to the recording industry. They had one sales rep and that person was just, didn't have time, was just repeating himself all the time. So I need to offload some of this repetitive stuff.

Can I, can I put it on the web? I've seen some other examples of configurators online. I think we need one. So we built them a configurator. You can configure and explore the possibilities of their mothership product on the web. And then by the time you've answered a bunch of the questions with the help of the web, you go and you talk to the sales rep to conclude things, or to bring the more complicated problems, or just to build the relationship up.

“Hey, guess what, man? I just signed so and so artist who will be unnamed because of NDAs and stuff. And I, I, I really want to get this, get this right.” So you have the human level relationship conversations and the web. Got stuff out of the way. It cleared away the friction.

It made things flow reliably so that you could focus on what you need to focus on, which was relationship, which was human stuff. So these, you're right. The sales reps I'm talking to at these trade shows are threatened by this level, this stage. They shouldn't be. They should understand that this is helping them.

This is going to help them close more business and build better relationships. The next stage, stage seven, is when you are, you've built on this CPQ concept and you've embraced the idea that digital is going to make your business change a little bit and what you're going to get in exchange is scale.

And so stage seven is you're, you're able to configure solutions online. You might validate that by making some phone calls or checking in with a rep online or, or what have you, but you're ready to make those purchases. And the, the purchase can be processed on the website. So you have what I call staged e-commerce and system integrations in this stage of development.

What staged e-commerce means is you're going to pay for a six-figure solution for your factory or for your, whatever the case may be, as you purchase from this industrial manufacturer, you're going to pay for this in stages. So the initial stage is specification has sign off like CPQ.

We have approval for this. We got sign off. Let's get the deposit. Now your solution has gone into production. It's now on the floor. We're assembling, we're configuring, we're setting everything up. That's the next stage. Now it's being loaded onto the pallets. It's prepared for shipment. You define the stages however you want, and how they make sense to your customers, and how they feel fair, and how they're verifiable and validatable. But, the idea is that you pay in stages.

So yes, people will use e-commerce shopping carts to pay for big ticket items. Industrial manufactured goods on the web. I'm not pushing my clients to do this. Unless it reduces friction, unless it creates a more reliable flow of revenue, which it does.

Scott: Yeah, I think these stages that are at the kind of the end of this are really ones that you can see that it's not that you're required to move to this.

Well, now you're at stage six, you'd better quickly run into stage seven as fast as you can or you're gonna be left behind. I think once you hit something with a configure price, price quote capability, it's really about starting to integrate these later stages when and if they make sense to your business, I think that's the thing that, once, once we have clients that, or anyone who would listen to this, think, “Okay, is this, gosh, I can't possibly imagine how my particular product set could, could be handled this way.”

I think maybe some stuff is never right for that. But I think probably more is right for it than people realize. And, and as time goes on, the idea of making six-figure purchases through a website I think could actually seem more predictable and less risky and with less friction.

Because I think about what you talked about in the earlier stages. We've got, if the, if the transactions are flowing online, invoicing is connected in through here, understanding more things about revenue, I think would be just having that connected through where the purchase is happening makes a big difference rather than separating those two things.

Okay, you've gotten your quote. Now we're going to move sort of offline into certainly other computer systems where all this stuff happens. But, and, and then there'll still be this, a bit of a disconnect. We've seen this, right? I mean, we can't talk much about it from certain customers, but we have seen high dollar, high risk purchases for industrial products being made online.

We know that while rare that it, it is possible.

Mitchell: It is possible, and it requires a level of sophistication that some of these businesses aren't ready for. And that's fine. They can still get a lot of return on their investment and build a lot of value in the, in the digital tools. But I, I, I want them to see where they're headed.

I want them to see where the future is. This, this gap between stage six and seven is interesting in the sense that, I mean, we've been building customer portals for people for years, and the idea is that, okay I want to interact with part of my relationship with your company can be supported online on the website.

I can log in and look up the invoices and look up the products that I have and so forth. And I can do that anytime I want because your customer portal is sophisticated enough to support me. Stage six to stage seven implies that you now have a place you can log in to see the status of your order, to ask questions about it. To verify that something is some set of constraints or requirements has been paid attention to and is being met. And you can go back and look at previous orders. And you can go back and say, “Oh, the solution that we applied to our Michigan factory, we need three replacement parts for that.”

Let me go online and find out which exactly. I don't have to look it up. It's all online. It's in my portal. So the idea that you have these tools available to you and you're supporting your customers, reducing friction in their experience of your business, using digital to do that, is really powerful. It requires investment and sophistication, but again, all along the way in these stages, you can validate the investment.

You can check ROI. It's trackable. That's one of the powers of the web if you use it right.

Scott: In stage seven you've described, stage six as being something that we can help the salesperson. And certainly it's something now that the user, the purchaser, can go in and they can start really sort of getting to work, so to speak. But an interesting, I feel like you're describing an interesting thing happened in stage seven, where you mentioned the count and, and I think it would be easy to take this point of view of the of the person who has the website of the business who's offering this on the website and think, “”Oh, yes, I can get lots of data.” But what you just described is the customer, the end customer, the business that is purchasing these complicated products that now they have a space that they can go in and gather data about their purchases, not merely an invoice or something like that. Now they're able to go in and see their history. Things that we're used to on like you go to Amazon, you can say, “Here, what's my purchase history and when is something going to be shipped to me?”

But to be able to have a similar experience as a buying customer through your vendor’s website. Yeah, that's a completely different sort of set of value that you're offering your customers than you probably ever have before.

Mitchell: So the web becomes a partner in the solution. The web becomes a partner not only in the sales activity, but I mean as any good business person knows, the most important sales activity you do is with your existing customers. And when you build up the capability in your digital assets, for those things to support your customers and the ongoing sales activity, then you've really unlocked a lot of potential. So it's become a partner. Now this website can support your customers and they can come back and look at past information.

They can get updates on specific things relevant to them because of what they've purchased. All that stuff is available. But you get into stage 8 and then you move into a place where not only is the web a partner, but it's a fundamental part of your solution. So the idea is that you, and one of our clients is moving into this space.

They are developing products that are going to be capable, using IOT technology, to communicate back to the web from the field. Now just think about Teslas. When the Tesla Model S first came out, it started to become clear that you're hearing stories about owners getting into their cars in the morning and there's a notification on the screen, “Hey, congratulations. We updated your system software overnight.” “You did what?” “Yeah, we updated the system software. Like we, we downloaded it because we have a connection to wifi. Grab some new system software, check it out. New screensaver, a couple of new features, an adjustment to an optimization of how the motor runs under certain conditions, all that stuff took place over the air.”

So the product connected to the web has found opportunities to create even more value. And Tesla was doing this where they were sending data from the cars back to the factory or whatever processing centers they had to consume that data and they could optimize the products with actual big data type information instead of just customer surveys or what have you.

So this opens up a whole new world of possibilities for these manufacturers that not only can you use the web to help you sell these solutions and you can use the web to help your customers configure the solutions that you offer for their particular needs, but you can now use the web to add even more streams of value in your product offering.

Once you create the capability, the conditions for these things to interact with each other ongoing after the sale, while it's in the field.

Scott: Yeah, the stage eight feels like it's, it's the first stage of something else. You've entered into a space that feels like “Oh, I'm done. I am at stage eight. I guess I'm all wrapped up.” No, you probably for a business that would get here and there are only a handful like you mentioned Tesla that had the capability to do these kinds of things, but there are certainly probably other ones out there. I think in the agricultural industry, there are some fairly sophisticated farm implementation that is connected to geo satellites to help them understand really to help guide movements and understand weather patterns and all sorts of things.

And I think, once you've hit this stage, it stops seeming like it's almost like you're out of thinking of this as, “Oh yes, I've, I've provided e-commerce and configurability to products on my website.” Now you're in a place where you're so completely integrated into how you do work, you probably can no longer think of doing your business, you don't think of it as like, Oh, I sell something on my website.” The website isn't this separate thing that provides value. And as a tool you probably cannot separate it from, well, how would we continue to do business? If you're really using IOT-enabled solutions and you're getting that sort of real time field data back in now this is, it is just your business, right? I mean, now this has just become an integrated part of how you do business, and you could probably never think of regressing back to some other stage.

Mitchell: The most popular booth, the most popular exhibit at this trade show in Santa Clara, this robotics trade show, by far, was a guy in Teva sandals and shorts and a cowboy hat. Everybody else is in suits, or they're, the polo shirts with the logo company logo on it. This dude from my area, from Watsonville, a big agricultural area locally, he has a startup and the product is an autonomous robot. You should see this thing. The wheels are like something you'd see on a moonscape.

But the configuration of this robot, the wheel, the separation between the wheels, the wheel base is exactly that of, a row of crops, a standard row of crops. This robot is autonomous. It signals back to whatever, I don't know, some sort of centralized server somewhere sending data back about the condition of the soil, the crops, the state, all that sort of stuff with scientific measurement.

And then it is receiving instructions from that central source back in the field. And it is doing the farmer's work in an autonomous manner. Not all of it, the farmer's boots are the best fertilizer, nothing replaces that, but this tool is IoT connected and it's capable of communicating and sharing data and processing data and ingesting data and in some sense making decisions about what to do.

This guy was so popular, I couldn't get anywhere near him to talk to him. As much as I tried. So that was, that was interesting. That's a stage eight company. I'm not sure if they're using the web as part of their integrated solutions for their customers. I assume so, but this is a stage that you're right, Scott.

This is not the end. This is the beginning of a new type of business.

Scott: And I think this is something that, when we kind of attach it back to what we were talking about in the first episode at the very beginning, this is a stage that is probably envisioned, somewhat by not even just the millennial audience because, once you sort of move into this and, and as this type of technology becomes more ubiquitous, the millennial leadership is going to be onboarding highly technical, competent Gen Z people into the business. This is a generation, even more so than millennials, that have grown up without a sense of what the world could be like without technology. I, I think, a millennial wouldn't be confused by this, but I'm sure there's, there's gotta be people out there who are, in their early twenties or younger who look on a smartphone and they look for the phone app and they see the little like little skeuomorphic handset and they go, what the hell is that thing?

Because they don't have any sense of what that is like and, and thinking of a stage eight as this sort of new starting point, I think, in the next decade, in the next 10 years, that generation is going to be moving to the similar space to where some younger millennials are now, they're going to be very comfortable with sort of daily operations that involve this type of technology to the point that I think that they will be probably somewhat mystified with companies that are resistant to using it because they'll be thinking, “Oh, no, this is, this is the starting point. We’ve got to start here so that we can go somewhere else. Didn't you know, competitors are always already using mixed reality. We gotta get some real time data from the field. These guys are using mixed reality. What are we waiting for?”

Mitchell: Yeah, so the, our world, the digital space, the internet, the web developer’s world, we're starting to see it grow tentacles. It's starting to kinda creep into all these other, other spaces. Now, hopefully we make ourselves welcome and, and, and our good house guests play nice. We can definitely help here. And when I go talk to these salespeople, “Look, I'm not trying to replace you, trying to make your job easier, trying to make your customers happier, trying to cut down on friction and streamline your process. And you can use the web, you can use computers, you can use these tools to do that.” So, that's probably, it's probably a good place to summarize and wrap up. Any last thoughts, Scott?

Scott: My only last thought is that, all these would probably seem overwhelming because there's eight of them and thinks, “Gosh, like how long would it take me to do something?”

I think to kind of circle back to our last episode, those first few stages, as we talked about stage one of essentially have no website, WordPress or something and then stage three, well, you've got a site and you've got some, some PDFs that are downloadable with stage four ended up.

Now you've got a little bit of product catalog for search and browsing. I have faceted searches and like that, but those first three stages you could probably pretty quickly progress through those, and you may already be there. A business may already find themselves here. And so the idea that you've got a lot of journey ahead of you I don't think it's as daunting as it could be as it could seem because there's a lot of stages in here is that really we're sort of working with these segments and especially these later stages particularly stage seven. And for sure, stage eight, these are things that you shouldn't feel, I think, as a business burdened, to say, “Well, we'd better get there.”

And soon I think, we've talked about, certainly stage six today is what we started with. That's a pretty advanced stage, and I think that is something that is accessible. So I think the sense of, okay, what does it take to get there?

Take some work, take some, some good iterative progress. But moving through these stages and having a goal set on something like a stage six where you've got a CPQ engine that is serving your customers is, is certainly attainable and does not have to be achieved through giant seven-figure platforms.

Mitchell: No. No. The thing that's probably daunting as well is that there's a cultural change that is required. But don't shoot the messenger. I'm not the bad guy because I'm coming in and telling you that you need to adopt digital. It's imposing itself on you. These boomers are aging out and the millennials are aging in.

These are demographic facts that can't be avoided. The power of digital, even, we haven't even talked about AI and it's involvement in this type of stuff. There's so much to discuss there too. But these are, this is like weather. You can't change it. You can't resist this ocean wave that's coming in and going to inundate your, your boat, but you can change your culture so that you can adapt and make the best use of it.

Scott: I think that is right. It's, it's a, it's a cultural change. And when I think about that as sort of adoption levels, each level is changing the culture and the mindset and the perspective of the people who are involved with it. And so while looking at a much later stage could seem almost hard to envision if you're at the appropriate stage to progress to the next one, it won't be hard to envision because you're already thinking about those things and because you'll have the context of the stage you're currently in then it's a lot easier to move into whatever the next stage is because you've seen the value and you've got an understanding of that, of your stage you're in.

But if you're three or four behind, it can seem kind of difficult and think, oh, we'll never get there. Which isn't the case. We've certainly, we've watched clients move through these stages and are moving through these stages and we can watch how they'll sort of gain that vision the longer they work with this.

Mitchell: I worry the most about the, those early stage companies who are getting no data, no validation, no objective information from their digital investments. That's just, there's, there's not enough there. They're, they're not seeing the opportunity because they're not seeing any data. They're not seeing confirmation of what they've invested in and how it's returning some of their money back to them. I worry about them. I hope they'll contact us and maybe we can help them out. Help guide them through to a new stage. But thank you, Scott. I appreciate you doing this with me. We're going to need to continue this conversation. Because as you said, Stage 8 is actually Stage 1.

Scott: Right.

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