SaaS eCommerce Value Calculator – Potential Sector, Client, and Product Value Proposition
Profit and loss calculator module is not a strange term to eCommerce brands and sellers. Basically the essence of commerce is to sell and earn profit. And the purpose of branding in a way is to dilute or decrease the importance of pricing in the eCommerce space. Then, the calculator module is not the IP of B2C. To B2B companies like SaaS eCommerce, a value proposition calculator is a critical component before things move forward. Without it, it is just like a car hasn’t an engine.
SaaS eCommerce companies can be like Shopify, Easyship, Channeladvisor, Lingble, etc. Basically, it’s a solution for eCommerce sellers, where sellers buy it for facilitating business operations. Meanwhile, sellers need to plug the SaaS cost into their financial module, to see the ROI. So the question is how to evaluate your value propositions to different sectors, clients, and products.
In this article, I would walk you through why the value proposition calculator is critical. And I try to show how to build a module that fits your B2B SaaS eCommerce solution. By the end of this piece, you can learn what ingredients are needed to create a SaaS eCommerce value proposition calculator, and how to build it.
- What’s a SaaS eCommerce value proposition?
- Why do you need a value proposition calculator?
- Start with identifying and leveraging intelligent data source
- Create a module of product, client, and sector value proposition calculator
- Implication for B2B Marketing
- FAQ
What’s a SaaS eCommerce Value Proposition?
First things first, the value proposition means it’s a quantified analysis of the benefits and costs incurred by a customer when that customer accepts the company’s offering. Basically, you can visualize this quantified analysis using this simple formula.
Customer Value = Benefits / Costs
These benefits and costs can either be totally perceived, or perceived plus actual, or actual. And the credibility of the company and the believability of the offering greatly influence the perceived benefits and costs. It helps when customers have experience with the product or service.
And the most essential part of selling a value proposition is that you are presenting to make more money, or save money, instead of spending money. You can substantiate your claim with research reports, endorsements, testimonials, user reviews, big data analysis, etc.
Second, a SaaS eCommerce value proposition means it’s your SaaS products and solution value calculation for adding value to target customers in the SaaS eCommerce space. For example, how much profit margin can increase using your SaaS? Any cost deducted using your SaaS and Why? In this piece, I would elaborate on the logic using the benefits and costs that are perceived plus actual. After all, disclosing all actual confidential numbers is not okay ?
Saas eCommerce – Why do you need a value proposition calculator?
You might aim to find collaborating clients using your B2B SaaS eCommerce solution as fast as possible. But the fact tells you it’s an ocean because there are thousands of sectors and products. Particularly your B2B eCommerce is going for the global markets. You can spend a year and still can’t reach the coastal land yet.
For resolving this, basically, you have three options. Running inbound or outbound marketing campaigns. Or leveraging sales talent networks to make direct deals. Or recruiting reselling partners to expand with shared revenue incentives. However, as you might be aware, you still need primary sectors to start first. Then you need data telling you why. For example, what sector’s sales you should hire, right?
Lingble Commission Model
I assume you are providing an eCommerce website solution and charging clients using transactional commission schemes like Lingble. What’s more, your service also provides eCommerce operation specialists, such as marketing, customer service, logistics, and on-site management.
Regardless of the AOV, GMV number that I would walk through how to fetch in a moment, these four sectors can tell you where you should start first. Don’t get me wrong, it’s either option. You can say your strategy focuses more on resolving mature eCommerce company pain points. So camera & photo products, surveillance cameras should be your primary sector. Or you of course can say less mature sectors can have a higher conversion rate buying your solutions. What matters? It’s dealing with cost and sector development status.
Take surveillance cameras for example. The highest pricing among other 3 sectors, although it has less monthly traffic than photo products. Avg. monthly GMV can have more than US$3 millions, very close to camera & photo products with double monthly traffic. So now you can look into benefits and costs to the client using your SaaS eCommerce solution and plug your fees into the table.
Customer Value = 666.67% (US$203,646,354/US$30,546,953)
The key point is whether the customer value of the client’s current solution is higher than this percentage or lower.
Start with identifying and leveraging intelligent data source
Perceived plus actual methodology means you can’t just assume a conversion rate or ROI based on your experience. Otherwise, it’s the perceived method and loses some convincing elements. We need to have some factual data supporting the calculator to be more realistic.
In a SaaS eCommerce solution, your product definitely is targeting the brand eCommerce business and eCommerce sellers. In the global space, one platform must be a very reliable data source if you like to understand what sectors are more popular and what products are selling well. This platform is Amazon. On Amazon, best-selling products can quickly let you know where the opportunities are moving forward.
In this best-selling product ranking, each product includes the product name, review number, star rating, and pricing. To some degree, ranking can imply the hotter space, review implies the sales volume, and pricing indirectly tells us the profit margin possibility. The question now is how to fetch the data in bulk and download it in an organized format.
Previously, I released one article regarding this topic. For more details, please feel free to check out the links below.
Create a framework of product, client, and sector value proposition calculator
Now we have a realistic data source, it’s time to draft and build the value proposition calculator module. First thing first, the golden principle of creating the SaaS eCommerce module is understanding where your business is sitting after plugging your side finance table into the client’s eCommerce P&L financial module.
Take the shared commission model for example. Basically, you are sitting in the client’s referral fee column in the P&L module. No matter what dimension you are working on, such as product level, specific client account level, or sector level, this pipeline, and your position would not change. The only difference is deep-dive or not.
For more details regarding eCommerce business variable cost in the P&L financial module, please check out this article.
Selling Well But Be Losing Money? 7 Variable Costs Are Impacting Your Online Store Profit Margin
In any level of value proposition calculator, you will also need to use different Google Sheets functions for looking up and formatting the data. Here is a consolidated 9 functions that are often being used to create eCommerce financial models.
9 Google Sheet Formulas Plus 1 Add-on for the eCommerce Marketing
1. Product Value Proposition Calculator
From Amazon best selling product data source, the raw data set must be directly related to each product SKU. From this dimension, you can rank the reviews and see the most popular and sales volume. It has all category data, which can be also broken down into subcategories and sub-subcategories.
The sexiest part of this calculator is you can identify your solution value down to the product level, and eye out the product value propositions. After all, your SaaS eCommerce solution might not fit all product SKUs, even though it’s fitting the category. For example, if you find CBD oil is perfectly working well after plugging it into your module, you might be able to start B2B marketing communication specifically on CBD oil SaaS eCommerce web solution. After all, it’s impossible to include all messaging into one piece banner.
2. Client account value proposition calculator
At the product level, we already know the brands from best-selling products. So you can use sumif and vlookup functions to create the client account dimension and see if there are some valuables that are worthy to invest in account-based marketing or outbound marketing.
Being said that, as a marketer, please keep in mind you need to handle this very carefully because this part is very political if your company already has sales talent. I would release another article regarding eCommerce gossip – marketer vs business development
3. Sector value proposition calculator
Last but not least, the sector dimension is critical to look into because it’s the most efficient calculator for marketers to strategize B2B marketing and execute it in a more accurate way.
What’s more, a sector-level value proposition calculator is much easier to eye out your solution’s market value and customer value. When a customer looks through your solution, basically there are two key considerations. What’s the difference between you and my current vendor? The other is if the customer value is higher or lower. If higher, how long to collaborate if this solution is eating our business profit margin?
In terms of market value compared with competitors, the higher percentage you can have, the more cutting-edge competition your SaaS solution has. Also, the higher percentage you can generate in customer value, your customer can make more money or save money collaborating with you.
Implication for B2B Marketing
The B2B marketing conversion journey is much longer than D2C or B2C. In terms of strategy and budget planning, a value proposition calculator in a way is much more important than B2C. It’s because you must have a primary to start and prepare the content, PR, events, and digital marketing campaign. It’s for just probably generating qualified leads. It is difficult to measure sales in your tracker.
Thus, a sector value proposition calculator can offer a very convincing direction for B2B marketers to start. Unless the company already has a solid successful case in some sectors. Even if this is the case, looking for potential sectors is also part of the B2B marketer’s scope of work.
A B2B marketer can estimate the revenue in the holding period based on the target market and the sector’s GMV in total. Then, we can align an ROI goal, such as 5. So you can propose an estimated marketing budget. I believe the number can be more realistic.
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FAQ:
Q1: What is the eCommerce Value Calculator?
A: The eCommerce Value Calculator is a tool designed to help online businesses determine the potential value they can generate through their eCommerce activities.
Q2: How does the eCommerce Value Calculator work?
A: The eCommerce Value Calculator takes into account various factors such as website traffic, conversion rate, average order value, and profit margin to estimate the potential revenue and profitability of an online business.
Q3: Why is it important to use the eCommerce Value Calculator?
A: By using the eCommerce Value Calculator, online businesses can gain insights into the financial viability of their eCommerce operations and make informed decisions regarding investments, marketing strategies, and pricing strategies.
Q4: Can the eCommerce Value Calculator be used for any type of online business?
A: Yes, the eCommerce Value Calculator is designed to be applicable to a wide range of online businesses, regardless of their industry or product offering.
Q5: Is the eCommerce Value Calculator accurate?
A: While the eCommerce Value Calculator provides estimates based on the inputs provided, it is important to note that the actual results may vary depending on various external factors and market conditions.
Q6: Can the eCommerce Value Calculator help in optimizing eCommerce performance?
A: Yes, the eCommerce Value Calculator can be used as a tool to identify areas for improvement and optimization in terms of website traffic, conversion rate, average order value, and profitability.
Q7: How can I access the eCommerce Value Calculator?
A: The eCommerce Value Calculator is available online and can be accessed through our website. Simply visit our website and navigate to the eCommerce Value Calculator section.
Q8: Is the eCommerce Value Calculator free to use?
A: Yes, the basic version of the eCommerce Value Calculator is available for free. However, there may be additional features and functionalities available in premium versions for a fee.
Q9: Can I save my eCommerce Value Calculator results?
A: Yes, the eCommerce Value Calculator allows users to save their calculations and results for future reference. This can be useful for tracking progress and comparing different scenarios.
Q10: Is there customer support available for the eCommerce Value Calculator?
A: Yes, we provide customer support for the eCommerce Value Calculator. If you have any questions or need assistance, you can reach out to our support team through the contact information provided on our website.
