How to Use Product CAD Models to Radically Increase Manufacturing Sales - Part 5
In this 6 part series of blog posts we’ll present an up-to-date overview of how to use product CAD models to radically increase manufacturing sales.
The 6 parts are:
- Part 1: Changing Sales and Marketing Trends Create High Impact Opportunity for Industrial Suppliers
- Part 2: Who Should Use this Opportunity & What Benefits Should You Expect
- Part 3: How to DO IT RIGHT – The Role of Search (Catalogs, SEO, SEM)
- Part 4: How to DO IT RIGHT – The CAD Models (Obtain, Maintain, Present, Syndicate)
- Part 5: How to DO IT RIGHT – The Business Model (including Partners and eCommerce)
- Part 6: How to DO IT RIGHT – Common Mistakes to Avoid
Below is Part 5 - the other parts will follow sequentially in the coming weeks.
Part 5: How to DO IT RIGHT – The Business Model
In Part 1, 2, 3 and 4 we explained why product 3D CAD models within an SEO optimized Catalog or Configurator are such powerful lead generation tools for industrial suppliers and how to choose the right technology.
Here, in Part 5, we explain that there are many business models available for CAD downloads, online digital catalogs, configurators and eCommerce and how to choose the right business model.
Let's assume your goal is to radically increase industrial product sales with the minimum initial and recurring costs. To help achieve this goal, your web site needs to attract, and keep attracting, new visitors and returning customers, enable them to easily find, select, download and order your parts. At the same, by providing CAD models of your products online, you can decrease your technical support costs because users self help, and decrease product returns by ensuring customers to select the right product the first time. You can increase your sales revenue and decease your costs using online marketing including 3D CAD models of your products. However, the choices you make will dictate initial and long term recurring costs, increases in sales achieved, decreases in costs achieved and the longevity of the competitive advantage obtained.
The most important items to consider are:
- Will you be charged per download or not?
It is best to avoid a per download model charge, because as you become more successful at generating downloads your costs will accelerate, perhaps with no relationship to the cost of running the necessary IT infrastructure and maintaining the CAD Models. A cost per download model is usually the worst choice although a laddered fee structure may be attractive, especially in the initial year or so. In contrast, a fixed price for unlimited downloads is usually the best choice.
CASE STUDY #3 J.W. Winco Inc. provides a comprehensive selection of quality metal and plastic, metric and inch size standard machine components and assembly hardware. Over 15,000 items are stocked and the majority of orders are shipped within 24 hours. ‘Our Silent Salesperson’, is how John M. Winkler, CEO, Office of the President, describes the 3D CAD models on his website, “you will seldom hear much when you offer 3D CAD, it is expected that everyone has it today. When customers find out that you do have it, they are more apt to just go ahead and utilize the tool for their design needs and never really say a whole lot, unless they have problems with it. I am proud to say, we very rarely hear from anyone that there is a problem with our CDS built and hosted 3D-CAD. When we do hear from our customers, they tell us they are very pleased that we have it, that the drawings are very complete for their designs and also, that we have the ability to offer all the various downloadable formats. Integrating it into our web site while also creating an online storefront was one our best ideas yet. An engineer will come to our site, something we track closely, view and download a 3D-CAD drawing, then a short time later we see that he has placed either a prototype part order or sometimes, an initial production order, right online at our storefront. The ROI has been tremendous, saving us literally thousands of dollars when calculating the time and effort we save! Just think, no contact is ever made with our inside sales or customer service people, it was all done online! I will also say, in a day and age where everyone is expected to do more with less, these tools have definitely helped things along. Tasks that were so cumbersome in the past, are now made so simple. Our sales and customer service people now have m ore time to handle more business, they do not have to contact a supplier or our engineering department for a drawing, or make a customer create a drawing, field simple questions with phone calls, waste countless return telephone calls, etc., etc. The customers that are doing business with us since we added 3D CAD and our Storefront are customers that we would not be doing business with today had we not added these important tools! If there ever was such a thing called a Silent Salesperson, it truly is 3D-CAD!"
- Will you use an external hosted solution or run it internally?
Most suppliers in this space provide the online hosting of your CAD models including the use of some type of real time model generator that employs parametric data, supports a multitude of output CAD model and viewing formats and high internet bandwidth to handle large models fast and efficiently. Be sure that your vendor uses high reliability data centers with power backup to ensure maximum up-time of your application/s. It can be a very expensive proposition to do this internally, but as long as you have the internal infrastructure to run a high reliability (at least 99.5% up-time) web site then either can work. Externally hosted or Software as a Service (SaaS) (At CDS we call ours CAD as a Service and Catalog as a Service) implementations are usually preferable in smaller organizations. Even in large organizations, CIOs have changed their thinking to welcome SaaS to address specific solutions.
At one time CIOs perceived it as a threat to their power over IT, but now they often see it as a way of fulfilling business mandates without stretching their thin IT budgets, particularly as there is no end in sight to the short supply of skilled IT workers. in specialist areas like online CAD and eCommerce. The most important benefits of a SaaS approach are speed of implementation, reduced total cost of ownership (TCO) as a fast and cost-effective way to enhance an online strategy. You avoid buying, installing, supporting and upgrading expensive software applications, servers and network equipment on company computers and you do not spend time and effort on troubleshooting, tech support, compatibility issues and the other headaches that accompany traditional “out-ofthe-box” software usage. This is especially true if you choose a supplier whose 3D CAD models and 3D Visualization ((CAD model viewing) an be added to your web site with a simple URL for each part number, thereby enabling fast and seamless web site integration.
- Will you use 3D CAD model downloads to generate sales leads?
3D CAD models have proven to be one of the best online marketing tools available to manufacturers and distributors. Significantly CAD downloads can generate sales leads, typically at a far lower cost/lead than traditional marketing and at a higher lead quality – CAD download sales leads have been shown a higher and a faster conversion to real sales . The best solutions include the ability to capture low-cost, high-quality leads from your web site when users download the 3D model.
We recommend allowing your website visitors to view 3D CAD models in their web browser without having to sign in or register. This is part of their search and selection process so you want no obstacles in their way. However, once they have selected a product and request a CAD download then ask them to complete a one-time, minimal, user registration. By 'one-time' we mean that the user only needs to register for their first download not repeatedly for every download and by 'minimal' we suggest name, company and email address. We use browser cookies so that upon return visits to your site, further CAD downloads can occur without login or re-registration. CDS lead generation has many options, for example, whether or not to validate the customers email address by sending an email to that address with a confirmation link to click - this confirms that the user has access to that email address and it works. We also provide full user control and management with an approval process and admin control. If you are concerned that requiring registration might discourage downloads consider these two ideas:
- By downloading rather than redrawing a CAD model Engineers and CAD designers will save valuable design time so they have at least one clear incentive. Another incentive is that they can assume the supplier's model is 100% correct, whereas redrawing may introduce errors.
- Test for yourself - either split visitor traffic into two streams with one requiring registration and one not or require registration for one period of time then don't require it for the next period of time. Either way comparison will show the impact.
Answers to many other frequently asked questions on CAD downloads are here.
- Does the solution support manufacturer-distributor relationships?
Distributors can be wary of dis-intermediation when manufacturers create new direct relationships with customers. Therefore ensure that your distributors are part of the plan and that the online catalog complete with 3D CAD models will further empower your distributor network. For example by distribution of sales leads that your website generates. Maintaining separation of the CAD model download and the order processing functions can be key to distributor adoption. Distributors are typically closer to the customers than the manufacturers and many provide value added services beyond traditional stocking, order taking and credit provision. The CAD model download capability can be another service available via the distributors’ web sites (even if those web sites just point to the manufacturer’s web site) and as part of their visits to customers, distributors can use the web site as a new sales tool to help customers select parts and download CAD models.
- Is eCommerce a working sales channel for you yet?
With the recent announcement of poor Wal-Mart results and their attribution to the growth of eCommerce by other retailers the writing is on the wall! If you haven't started an eCommerce implementation yet you're late! Readers of this blog know we've been tracking, reporting on and encouraging industrial suppliers to add e-Commerce as another sales channel for years. For example see posts such as these:
- Industrial eCommerce – How to get a Step Ahead of your Competition
- eCommerce is still Accelerating – Grainger: $1.6B in the First Half of 2015
- U.S. eCommerce software and services spending to Nearly Double by 2019
- and more you can find by searching the site: The four Horsemen of the eCommerce Apocalypse; Is Your Website as Good as Amazon, Grainger or McMaster; How to be a Digital Industrial Distributor; What do you Need in an Industrial B2B eCommerce Website?
We think small and medium sized industrial company eCommerce adoption may continue to lag large company adoption but costs today are a tiny fraction of what large companies like Amazon®, Grainger® or McMaster® spent to achieve their eCommerce capabilities. Today, sophisticated industrial B2B eCommerce websites can be set up and operated at relatively low cost subscription rates with little or no capital investment. For the smaller companies it has paid to be a fast follower!
We're often asked if industrial suppliers should sell through marketplace sites (like Amazon). The answer, particularly for small companies is yes but don't preclude also offering eCommerce transactions on your own site. Transactions on others sites are always open to 'distractions' such as competitors ads or price offers that you can't control.
This series of blog posts has described how changing sales and marketing trends have created a high impact opportunity for industrial suppliers and how you can use this opportunity to radically grow your industrial product sales.
The recent worldwide CAD Trends 2015 survey by CAD Market Research Specialist Business Advantage Group illustrates how far and how fast this opportunity is growing and developing. You can review the detail here but, year over year there has been a "significant increase in the number of users downloading 3D Models regularly (10+ times/month), particularly in Manufacturing." For those that download CAD models, the weighted average downloads per person across all the industries surveyed is 45 CAD model downloads per year, up about 50% from 30 in 2014. Specifically in the Manufacturing industry, the weighted average downloads per person is 57 CAD model downloads per year!
Designers spend a significant proportion of their time (some estimate up to 25%) searching for stock parts and creating CAD representations of these parts for use in their designs. The information they rely on to identify parts needs to be accurate, up-to-date (online) and complete (including 3D and 2D CAD geometry), not least, because their choice of component supplier can be directly affected. They expect design efficiency gains through reuse of CAD models and from reduced communication dialogue with suppliers (24*7 self help and download, in contrast to multiple emails and bulky attachments). Providing online 3D CAD model downloads helps them get their designs to market faster and often ‘locks’ products into a new design so suppliers later benefit from the sales success of that design. Industrial suppliers who meet these expectations by making an ongoing investment in their web sites with CAD model downloads (and possibly via online catalogs, configurators and eCommerce) can expect to generate low cost, good quality sales leads and thereby increased sales and lasting customer loyalty, by providing a compelling reason for design engineers and buyers to return repeatedly to their web sites. The 3D CAD downloads will supply critical engineering information, reduce engineering design costs, accelerate time to market, and ensure design accuracy. Internally, industrial suppliers can also expect some relief for high value tech resources as the customer ‘self-help’ frees up resources from CAD model retrieval and communication as well as helping customers configure products. Industrial suppliers without 3D CAD models on their web sites are at risk of losing customers to competitors who do offer 3D CAD models. Conversely a adding CAD downloads is a proven way to radically increase sales… an important sales and marketing tool for all industrial suppliers and an ROI justification for online digital catalogs, eCommerce and configurators.
The final part of this Blog post series, Part 6, will follow sequentially and deal with common mistakes made by industrial suppliers as they have implemented online marketing including 3D CAD models. In the meantime please feel free to comment below, call us to discuss any questions you have or click either button below…