As discussed in our last post, companies that are most successful in achieving online sales control and stopping unauthorized marketplace sellers will have strategically involved and aligned eCommerce, sales, legal and executive leadership with their eControl initiatives. Cross functional involvement and alignment is most easily achieved when relevant leaders are educated on the ways in which eControl can drive their individual KPIs. Here are some examples of how eControl solutions are supportive to cross functional leaders:
Most experienced eCommerce leaders will understand the importance of control to the optimization of online sales channel performance. Online sales control through eControl initiatives drives increased eCommerce sales by increasing the percentage of online sales captured by your authorized, invested eCommerce partners, rather than freeriding, low-quality unauthorized sellers. This, in turn, upholds product quality, improves the customer experience and allows for increased return on investment in eCommerce marketing, search and other demand-generation initiatives. In addition, eControl will drive stabilization and enhancement of brand value in the eCommerce channel through the mitigation of harmful intrabrand competition on online marketplaces like Amazon, which will allow the company to drive better business across all channels, online and offline.
Many sales teams continue to operate independently from eCommerce teams, with different customers, different incentives and different management. Sales teams will necessarily continue to transact with longstanding brick-and-mortar distributors and retailers, which still comprise the largest percentage of sales revenue for most companies. As such, traditional sales teams may believe that an uncontrolled online sales environment does not impact their performance, or that, if it does, such impact is minimal. To achieve critical sales team alignment, sales leadership must be educated on the importance of a controlled and profitable online channel to offline channel success. This is especially so given that the vast majority of unauthorized online sales will originate in the offline sales channel – whether through products diverted from distribution, or through arbitration opportunities created by certain pricing and promotional practices. The below graphic demonstrates how uncontrolled online sales will soon begin to damage offline channel performance, which cycle will continue until sales teams understand and participate in eControl initiatives.
Compare the above vicious cycle that will invariably harm offline channel performance to the graphic below:
When sales teams are able to show their traditional customers that your brand is in control on Amazon and other marketplaces, brick and mortar customers will be much more willing to invest in and promote your brand confident that they will not be undercut by freeriding online resellers. Sales teams will also be better equipped to avoid customer demands for margin chargebacks, pricing decreases, threats of reduced shelf space or promotional activity. Finally, we have seen numerous companies attribute increased offline sales to a controlled, healthy online presence through improved ratings and reviews, a reduction in showrooming and increased investment on the part of brick-and-mortar retailers in the form of expanded distribution, improved product placement and inclusion in marketing and shelf promotions.
As we discussed in our recent post, legal team alignment is critical to the efficient implementation of an eControl program within your company. Ensuring the necessary legal foundation for channel controls and unauthorized seller enforcement has been established is a necessary component to eControl, and, in many companies, the internal legal team is a key asset in ongoing eControl work. In-house legal teams are frequently challenged to identify ways to drive commercial value in their organizations beyond risk mitigation and managing outside counsel. When internal legal teams understand the key business metrics, including increased revenue, brand value, brand quality, channel customer commitment and consumer sentiment, that can be driven through eControl, they often champion the project and are willing to lean in with supporting resources.
Finally, the importance of executive support cannot be overstated as it relates to driving cross functional support, approving budgets and empowering eControl champions to lead in their organizations. Many executives, however, still view eCommerce as a “small” part of the business, or otherwise not mission-critical to their company’s strategic core. As such, executives often are unaware of the far-reaching financial impacts of uncontrolled online sales. Thus, education on the company-wide importance and benefits of eControl is the key first step in winning executive support. The chart below provides a summary of eControl benefits that can be leveraged for executive support, and a detailed business impact analysis can be prepared for executive education within your organization.