You don’t own an eCommerce business. You own a people business and eCommerce is a tool your people use. I know it’s shocking, but real, live, actual human beings shape the user experience more than the placement of the “Add To Cart” button. Your people need to develop the customer experience, answer the phone, respond to emails, build relationships and shine a positive energy on your customers that is reflective of your culture.
As part of my series about the “5 Things You Need To Know To Create A Highly Successful ECommerce Business,” I had the pleasure of interviewing Robert Preville, a serial entrepreneur and investor, having founded and led several high growth companies in the B2B eCommerce arena. Prior to KWIPPED, Robert founded and sold GlobalTestSupply.com, a world-class online provider of test and measurement equipment that ranked #800 on the INC 5000 fastest growing companies list. Prior to that, he was the founding employee and Vice President of Sales for MFG.com, the leading online manufacturing marketplace and a portfolio company of Jeff Bezos’s Bezos Expeditions. Robert started his career at EDS (now Siemens), is co-owner of the Greater Wilmington Business Journal, is an active angel investor via IMAF Cape Fear in Wilmington, NC and holds a Bachelor of Science degree in Mechanical Engineering from the University of Maryland, College Park.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Thank you for having me. I have, and have always had, an engineer’s mindset. I love to fix things, build things and solve problems. I studied engineering in school and my first job was with an engineering firm. I also learned to write code and found myself drawn to developing digital technology solutions. Inevitably, I left my corporate job (at an engineering firm) for the opportunity to work as a founding employee for an online business called, MFG.com. We built a platform to drive a 2-sided marketplace where businesses that needed machine parts manufactured could connect with manufacturing services companies. It grew quickly and we were acquired by Bezos expeditions.
I had so much fun that I decided to start another B2B eCommerce business, Global Test Supply. We sold test and measurement equipment online. Again, it was quite successful, and we sold it to a larger competitor.
My current company, KWIPPED, was definitely inspired and influenced by these two previous companies.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
Online marketplaces and eCommerce sites exploded in the B2C world over a decade ago. But the B2B world has been slower to adopt these models — and is still far from critical mass. This is mostly because B2B transactions, especially related to B2B equipment, which is what we deal in, are typically more complex than B2C transactions. If a consumer wants to buy a gadget or some clothes, they just find it, add it to their shopping cart and pay for it. But, if a business needs equipment for their lab, we’re usually talking about tens or even hundreds of thousands of dollars and there are many questions that need to be answered. There are also multiple payment options, like rentals, financing or a straight purchase. B2B transactions typically have a longer buying journey, which makes it more difficult to automate into an eCommerce process.
However, difficult challenges can also be seen as great opportunities. I knew from my first two startups that many types of businesses were willing and wanting to do business online. I also intuitively suspected that as the millennials entered the workforce in full force, B2B eCommerce would inevitably grow, as they are the first generation that has really grown up online. ECommerce is what they expect. Online is where they go.
So, we set out to build technology to make it easy for businesses to rent, buy or finance virtually any type of specialty commercial or industrial equipment. And it’s working!
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
I took a job as a founding employee, and quickly realized that it’s much different than being the founder. I have always had entrepreneurial spirit in my blood and it was difficult to think and feel from a founder’s perspective, while being treated like an employee. The experience was complicated even more by a difference in approach to company culture between me and the founder.
Ultimately, our differences helped to shape my values and instill confidence in my abilities. I got to learn what to do, and what not to do, while the founder took on most of the financial risk. I learned that a difficult situation can be a great investment for future endeavors. Sometimes we find out a lot about what we want and what type of leader we want to be by bouncing up against situations we don’t want and people we don’t want to emulate.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Things are great. I have confidence and experience which in combination produce accurate intuition and strong moral leadership. Nothing surprises me and I don’t surprise anyone else. In life and business, I believe in maximizing return on investment and mitigating risk. Confidence is required to take risks that maximize return. Experience is required to mitigate those risks. As founders, we lean on the experiences and wisdom we acquire through failures and successes to master the balance between risk and return.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
I once was in the business of selling engineering equipment. We shipped the customer an expensive instrument that malfunctioned upon arrival. The customer was not happy, so we had them overnight the instrument to a repair facility and pay to expedite repair and return. We probably had a -20% profit on that sale. Although the customer was unhappy, they told us that they were impressed with how we handled the situation and they would definitely do business with us moving forward. The lesson learned is…how we choose to respond and recover from failure is more telling and more important than the act of failing temporarily. I told our warehouse manager to make sure all future equipment malfunctioned prior to shipping…I’m kidding of course…but there’s a serious point here.
What do you think makes your company stand out? Can you share a story?
Well, our team and our culture are extraordinary, but from an eCommerce perspective, it is our ability to leverage data to guide our strategic decision-making. We invested in a data expert that has brought incredible levels of visibility to our eCommerce business. We see, almost in real time, if something is working or not working. We have very clear KPIs and can plan and model with a high level of accuracy.
Here’s a cool story. Our eCommerce site allows customers to shop equipment in two ways. First, some equipment is listed on the site with pricing and can be added to our shopping cart like any traditional eCommerce site. However, most of our customers prefer to receive multiple quotes from our network of suppliers, so they submit a digital Request for Quotes (RFQ). We built some technology that would take the quoted sale price and automatically calculate and present an estimated monthly finance payment right on the quote. We called it, integrated point-of-sale financing option. Our data made it quite clear that when we presented the financing payment option at that point-of-sale (on the quote), customers applied for financing 70% of the time. We realized, most of our customers really want to finance the purchase of equipment so we added the same technology to the website. Everywhere we listed a purchase price, we also listed an estimated monthly finance payment. About 70% of customers would click the “Apply for financing” button and our financing business has skyrocketed.
A solid data strategy will tell you what’s going on with your business. Our team is really great at understanding the data and responding to it flexibly and intelligently.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Surround yourself with great people — not just good workers — but good people that you enjoy being around. We spend most of our waking hours at work…being around people that inspire you and make you laugh is a great way to avoid getting burnt out.
Do something you like to do, something you’re passionate about.
The real key is to wake up looking forward to going to work. If you enjoy what you’re doing and who you’re doing it with, you’re going to thrive.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I’m not trying to avoid the question, but in my opinion, no one person can take responsibility for a lifetime on one’s molding. I have learned, and continue to learn, a little bit from everyone I meet. Sometimes I learn from the advice and actions of inspiring leaders and sometimes I learn from the things people do wrong. I am even learning a little from you right now, as your questions offer perspective that is unique to how you think. The key is realizing that, no matter how old you are or how much experience you have, there is always a takeaway from every new interaction. As our Country navigates unprecedented times and a divisive political climate, now is a challenging, but also a valuable time to learn from others.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?
Since our inception in 2015, our goal has been to create a world-class B2B eCommerce user experience. The pandemic has not changed our core objective. The fact that we were already built for eCommerce has been quite advantageous for us during the pandemic and we are seeing record amounts of online traffic.
We support equipment transactions across 30+ industries, so we do have a unique and broad perspective of the impact of Covid-19 on an industry-specific level. In January 2020, our restaurant equipment business surpassed our laboratory and medical equipment business to become our highest revenue-generating vertical. By the end of March, our restaurant transactions came to an abrupt halt. However, as Covid-19 entered the scene in March, our medical equipment business skyrocketed. We ranked in the second position on Google for the search phrase “Ventilator rental”, and as you might suspect, our ventilator business exploded…to the tune of a 5,000% increase.
In general, there’s no question that Covid-19 has forced the B2B world to quickly shift their focus to developing effective eCommerce businesses. Fortunately, we were already dedicated to that purpose pre-pandemic.
Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
This is a difficult question to answer because there are many possible factors to consider, starting with the nature of the products or services being offered and including the current market environment.
However, if finding the cheapest and fastest option is what an online shopper desires, most retailers are simply not going to be able to compete with those giants. However, there will always be buyers that value product quality, service quality, brand reputation, and the experience and relationship they have with a particular brand. Retailers need to really understand the personas of their ideal customers and develop a voice and message that leverages the deeper desires of those personas.
For example, if customers believe your brand aligns with their values and senses your company has an authentic desire to meet their needs, they are quite likely to engage with your brand. If you’ve done a great job creating and promoting an attractive brand, your customers may even identify with and establish an emotional connection to your brand. If you get to the place where your customers feel that using your brand says something positive about them…they will not buy from Wal-Mart or Amazon.
What are the most common mistakes you have seen CEOs & founders make when they start an eCommerce business? What can be done to avoid those errors?
I have seen a lot of founders prioritize the mechanics of business over the art of business. It’s easy to create an LLC, open a bank account, hire an employee or create a website. It’s not easy figuring out how to go to market or what you’re going to say on your first sales call. The hard part of business is convincing others, especially when the world is out to mitigate risk. It’s risky to buy an unproven product or do business with an unproven company. My advice is to not worry about opening a bank account until after you have made your first sale.
In your experience, which aspect of running an eCommerce brand tends to be most underestimated? Can you explain or give an example?
This probably does not apply to a typical B2C eCommerce site, but for our business, technology is critical for delivering a smooth online user experience. Our conversion rates have always shared a direct relationship with our ability to simplify and streamline a complex B2B buyer’s journey. Having a team of exceptional problem-solvers and developers is critical to our success.
We used to offer equipment financing the traditional way. We’d send our customers away from our site to complete a finance application on a lender’s site. At that point, we lost visibility and influence over the sales opportunity and basically our conversions were at the mercy of our lender partners. We wanted a more efficient user experience for our customers and we wanted to maintain visibility and influence during the entire sales process.
In response, we turned traditional equipment financing upside down. We built technology that allowed our customers to click a button on the product page or digital quote and complete a financing application in about two minutes without having to visit a lender’s website. We place that application on a web portal and notify a network of about 15 lending partners that a new application has been submitted. The first three lenders to claim the application get to underwrite it. If one declines the application it goes back to the portal for another lender to claim. The first three to approve the application submit their best offers to our customer to compare. The customer chooses the best offer and the winning lender gets the deal. Now, our customers never leave our site and can get three offers with a single application. It’s a way more efficient process and a much more appealing user experience.
Can you share a few examples of tools or software that you think can dramatically empower emerging eCommerce brands to be more effective and more successful?
Perhaps it’s a bit of semantics, but when I think of “empowerment” I think less about tools and software and more about building a culture centered on improving the customer, employee and shareholder experiences. I think tools present themselves as a logical byproduct of such a culture. A hand tool and a power tool serve the same purpose. The owner of the power tool realizes the customer will appreciate a quicker, stronger and better-quality product. The owner of the power tool has the will and foresight to make the investment that will maximize return and minimize risk. The owner of the hand tool is complacent and resists change. Invest in power tools and, if it ain’t broken, fix it anyway.
Having said that, in the eCommerce world, we greatly value tools that provide transparency and visibility into the choices and behaviors of our customers as they progress through our sales funnel. Our in-house development team is stellar, we’ve built many of our own data tracking and analytics tools. At any moment, we can pull up a data dashboard and quickly identify performance increases and decreases at a very granular level. In short, build or invest in tools that collect data at each stage of your sales funnel and allows you to sort and filter that data in meaningful ways. If you’re not using data to drive your decision making, you’re going to have a very difficult time growing an eCommerce business.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?
First and foremost, it’s important to clearly map out and understand your sales funnel and the various stages within your sales funnel. Then you must be able to measure the movement that prospects make from one stage of the funnel to the next. The data will reveal those areas where prospects are dropping off, so the appropriate adjustments can be made with precision.
In the B2B eCommerce space, we have found that most of our business customers want a prompt response. The suppliers that submit their quotes within 2 hours of receiving the RFQ have a 40% better chance of closing than those that delay their quotes.
Providing choices and options that make the customer feel empowered to make a smart decision is also an important conversion factor. When our customers receive 2 or more quotes, our conversion rates go up by more than 30%.
And finally, the website and eCommerce UX must be smooth and fast. A website that is difficult to navigate or is slow responding will automatically result in session exits.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?
We put a lot of effort into creating an eCommerce experience that enables the customer to do business without speaking to a human. However, in the B2B space, sometimes direct collaboration with experts is a necessity. We’ve made it very easy for our customers to contact us directly by phone, email or chat and reach a human customer service rep quickly.
We also place a lot of emphasis on our voice and the language we use across all channels. Whether it’s a live person, copy on our website, emails or social media posts, we’ve cultivated a very friendly, conversational tone that establishes trust and good rapport. Even when customers are shopping online, they are still people and appreciate a welcoming and helpful tone.
And finally, do a great job. Make sure your website makes it easy for your customers to find the products and information they need. Make sure they can get their questions answered promptly and thoroughly. Lastly, make sure they are getting a great value by engaging with your brand.
One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews? How about other unfair things said online about a brand?
On the few occasions we’ve received a bad review, we made a point to reach out to the customer and have a direct discussion about their experience. In most cases, there was a simple misunderstanding and after an apology and making sure the situation was resolved the reviewers were willing to retract their complaints.
If a reviewer is unwilling to change or remove their reviews, have your best and calmest writer respond to the review with a sincere apology and an expressed willingness to resolve the issue. If the response is professional and gracious, and your ratio of good vs bad reviews is favorable, customers are willing to give the company the benefit of the doubt. However, if your company is receiving regular complaints and negative reviews, perhaps it would be wise to address the issues internally.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a very successful eCommerce business? Please share a story or an example for each.
- eCommerce is Commerce. Person A needs something. Person B has it. They transact in an equitable exchange of value. Understand that the “e” makes the transaction more efficient, informed and transparent, but for a large part of the economy the “e” is not required for commerce. You should understand how the “e” creates value in your niche and differentiates your commerce.
- Have a plan to secure the market. The “build it and they will come” philosophy will not produce. Securing market share is not about creating an strategy. Searh Engine is great to acquire customers, but it creates a dependency. Think about it; Who owns your business? You or Google? You must not just acquire customers but build a relationship with them so they transact with you consistently and consistently refer others to you. Your eCommerce store needs to be a destination, not a pitstop on the Google highway.
- You don’t own an eCommerce business. You own a people business and eCommerce is a tool your people use. I know it’s shocking, but real, live, actual human beings shape the user experience more than the placement of the “Add To Cart” button. Your people need to develop the customer experience, answer the phone, respond to emails, build relationships and shine a positive energy on your customers that is reflective of your culture.
- Maintain a framework of prioritization. There is a lot to do. How do you decide what is most meaningful to the business? A framework may look like the following: Score ideas according to how impactful they are, how much effort and investment they require and how confident you are they will be successful. This allows you to prioritize one idea against another.
- Smoke Selling. It’s not as dubious as it sounds. The idea is that you can try new things without making a full operational commitment. For example, you can market a new product in your store or pre-sell a new SaaS product before buying inventory or committing to software development in order to test demand. Smoke selling minimizes risk to maximize return.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The Happy Work Movement
I have lived most of my life under the philosophy that happiness cannot be bought and the happier you are, the more productive you become. Most people that work full-time jobs, and especially dedicated entrepreneurs, spend most of our waking hours at work. Most people are not happy with the work they are doing every day, and that is a travesty. I realize a movement to help people enjoy their work may sound a little trite when compared to some of the more blatant problems the world is facing. But, I truly believe that if everyone enjoyed their work, there would be less divisiveness, less depression, less war and less failure. I know many business owners feel otherwise, but in my experience, when you successfully build a company culture that makes people actually enjoy coming to work and taking pride in their performance, productivity skyrockets and the internal energy is palpable — even to external customers. Happy workers are the key to a successful business and may just be the key to world peace!
How can our readers further follow you online?
Here’s my LinkedIn: https://www.linkedin.com/in/robertpreville/
Here’s our Company’s LinkedIn: https://www.linkedin.com/company/kwipped-inc-/?viewAsMember=true
Here’s our website: https://www.kwipped.com/
This was very inspiring. Thank you so much for the time you spent with this!
It was my pleasure. Thanks again for the opportunity.