Shopify Advantage - PDF

Capitolo 3. Positioning the Shopify Advantage In this lesson Value pillars vs value propositions? What are Shopify’s value pillars? The challenges that make up the pillars Value pillars vs value propositions? Have you ever noticed how some brands effortlessly attract and retain loyal customers...

Capitolo 3. Positioning the Shopify Advantage In this lesson Value pillars vs value propositions? What are Shopify’s value pillars? The challenges that make up the pillars Value pillars vs value propositions? Have you ever noticed how some brands effortlessly attract and retain loyal customers while others struggle to make an impact? This difference often stems from how effectively a brand communicates its unique value, not just what it sells. Compelling value pillars and propositions are essential; without them, even the best products can go unnoticed by those who would benefit most. So, what is the difference between a value pillar and a value proposition? Value pillars vs propositions Value Pillars A positioning strategy that introduces solutions to a prospect’s business challenges rather than sell them a product. Strategically communicates a company’s overall advantage in a competitive landscape Intentionally appeals to a broad range of business models without being tied to any single product or feature Narrows the focus of the prospect’s potential solution providers in the early stages of the sale process Think of a value pillar as a lighthouse cutting through the fog, guiding prospects toward their destination. The clearer and stronger the value pillar, the deeper the connection the prospect will develop with the company as the solution provider. Value propositions A positioning strategy that introduces a specific product as the solution to a prospect’s business challenges. Communicates the unique advantages and specific strengths of the product or features Directly addresses how the product or service meets a need or resolves a problem Explains why the product is superior to alternatives available in the market Narrows the focus of the prospect’s purchasing decisions within a solution provider’s product offerings Think of a value proposition as signal buoys that provide navigation for the prospect to reach their dock. The more specific and customized the value propositions are, the deeper the connection the prospect will have with envisioning the company’s products as ideal solutions for improving their business processes. What are Shopify’s value pillars? The extensive value provided by Shopify's commerce platform has prompted the development of “value pillars,“ which group specific value propositions. Speed and agility Operate with confidence Innovation you can customize Before we dive deep into each pillar, let’s define the themes, primary message, and secondary message. Speed and Agility Operate with confidence Innovation you can customize Shopify’s value pillars are designed to introduce solutions to the buyer's problems rather than sell them a product. This means that more clarity about their challenges = better positioning. When a Partner positions Shopify, they must uncover the prospect's current challenges in order to select the value pillars that will resonate most with the prospective merchant. The challenges that make up the pillars Now that we have an overview of the Shopify value pillars, let's explore the unique challenges merchants encounter within each pillar. We will also examine the corresponding Shopify solutions and the related products or features designed to address these issues. Value pillar 1: Speed and agility Merchants face the challenge of growing revenue while maintaining platform performance. Business challenges Shopify’s solution/ Value proposition Losing sales due to platform performance Need to increase topline revenue Looking to improve conversion rates Checkout conversion: Shopify checkout converts up to 36% higher than other platforms, which allows businesses to increase topline revenue and ensure they never lose a sale due to platform performance or security. It is expensive and challenging to invest in new channels and reach new customers Need to keep costs down to drive revenue vs. spend Customer acquisition: Expand and capture your customer base for less with smarter analytics and tools enriched by Shopify’s data network. Disjointed sales channels Inconsistent customer experience Omnichannel: Shopify allows businesses to sync their online and retail systems from an all-in-one platform that’s fully customizable. Value pillar 2: Operate with confidence Merchants face the challenge of providing a seamless and brand-consistent shopping experience, while ensuring platform usability, reliability, team efficiency, and cost control. Business challenges Shopify’s solution/ Value proposition Not meeting customer expectations for a seamless online shopping experience Storefront does not represent the brand Existing software is not easy to use or to build with for internal teams Online storefronts: The world’s best stores are built on Shopify, allowing businesses to build any commerce experience imaginable with a uniquely preferred stack. Do not know where to invest in a business next to keep driving revenue and innovation Need leaner solutions so that they can effectively enable their teams to be the most effective to drive more revenue Operational excellence: Shopify allows businesses to make smarter investments with a commerce-first operating system, so they get the most out of your development team and campaign dollars. Need a platform that is trustworthy Big focus on: performance, maintenance, uptime, security and ongoing engineering prowess Platform performance: Shopify platform performance converts and is trustworthy to handle the biggest enterprise sales seasons. Current platform costs are too high,upgrades are not worth the investment Cost optimization or TCO: Decrease your total cost of ownership, with accelerated acquisition and conversion, globally scaled infrastructure, and solutions designed for growth. Value pillar 3: Innovation you can customize Merchants face the challenge of finding an integrated, cost-effective software solution that simplifies management across international markets and seamlessly integrates with essential tools. Business challenges Shopify’s solution/ Value proposition Separate systems across international markets don’t give the full picture and increase costs and teams required to manage them International and localization: Global growth without limits: Scale your business and streamline operations with the platform built for global success. Stitching together preferred specialized softwares to manage a business is complicated Evaluating and understanding how a software stack will integrate with other preferred tools that provide must-have solutions is critical in a merchants decision to buy and invest in enterprise software Integrations: Commerce software designed for connectivity so you can easily and quickly bridge the world’s best commerce capabilities into their tech stack with flexible integrations, open APIs, and robust ecosystem. In this lesson Adobe Commerce Cloud (formerly Magento) BigCommerce Salesforce Commerce Cloud WooCommerce Now that you know how Shopify's value sets it apart from the commerce landscape, let's dive into the specifics of several major competitor platforms. While numerous companies operate in the commerce space, a select few stand out as the most prevalent options for prospective merchants. To empower you with the ability to address common objections stemming from fear, uncertainty, and doubt (FUD) when comparing Shopify to competitors, each of the following sections will comprehensively cover: Competitor overview Why merchants Prefer Shopify to each competitor Adobe Commerce Cloud (formerly Magento) Competitor overview Adobe Commerce, formerly known as Magento, is part of the larger Adobe suite of products, including tools for design, marketing, analytics, and more. Many businesses choose Adobe Commerce when they require a high degree of customization due to merchant needs. Why merchants Prefer Shopify to Adobe Commerce (Magento) Improved agility and usability Brands get the operational leverage and flexibility without the technical debt, empowering both tech teams and business users to focus on what really matters – business goals and differentiation. Security and reliability Shopify owns platform security and data protection so brands don't have to deal with or worry about complex, backend issues that add no value to their business. Higher ROI, lower TCO Shopify is an investment for the brand's future. The brands gain long term value by having access to the best in class built in commerce functionalities to expand business across channels and regions while gaining the agility to quickly take advantage of market trends and experiment with new features. Faster innovation and industry leader Strong, consistent financials and substantial investment into product innovation and roadmap positions Shopify as a leader in commerce and a long term solutions partner for brands. BigCommerce Competitor overview BigCommerce is another multi-tenant SaaS platform with great ease of use that’s able to help brands lower TCO. Brands who choose BigCommerce tend to do so because of the user-friendly interface and range of built-in features and integrations. Why merchants prefer Shopify to BigCommerce Industry leader Shopify ships faster than anyone, introducing trailblazing features, consistently at a high frequency. The sheer volume of feature releases by Shopify’s B2B product team in the past two Editions and beyond means that any product gaps that exist, won’t last long. And when we surpass, we won’t stop at feature parity. Our DNA is to innovate and tackle the hard problems that give our merchants tools to stand out in the crowd and grow their business long into the future. Higher revenue Brands that chose Shopify over BigCommerce have the opportunity to create a customizable, one-click checkout experience. Shopify offers the world's quickest checkout that converts 12% more than BigCommerce does. Better TCO Shopify’s total cost of ownership (TCO) is 31% better than BigCommerce’s, on average. From robust native enterprise capabilities to the front-end and back-end simplicity of our platform, Shopify is the platform of choice for businesses looking to improve their operational efficiency. Ecosystem advantage Five times as many apps in our tech ecosystem which means more optionality for brands and less need to rely on custom developed apps or integrations. Salesforce Commerce Cloud Competitor overview Salesforce Commerce Cloud, previously known as Demandware, is part of the larger Salesforce ecosystem. Salesforce is often chosen by businesses that are already using other Salesforce products, as they feel it will be an easy “plug and play” solution. Why merchants prefer Shopify to Salesforce Higher conversion Shopify empowers brands to increase checkout conversions and drive sales growth. We offer faster checkouts, higher conversion rates, and layered protections against fraud. All with customization options that allow brands to make the experience their own. Lower TCO, higher ROI Brands gain long term value by having access to the best in class built in commerce functionalities to expand business across channels and regions while gaining the agility to quickly take advantage of market trends and experiment with new features. Shopify's TCO is lower across all categories (platform fees, ongoing maintenance, and implementation costs) Improved agility and usability Brands get the operational leverage and flexibility, without the technical debt, empowering both tech teams and business users to focus on what really matters, business goals and differentiation. Faster innovation and industry leader In over 175 countries, millions of businesses trust Shopify to take them to new heights. Strong, consistent financials and substantial investment into product innovation and roadmap positions Shopify as a leader in commerce and a long term solutions partner for brands. To explore a layer deeper check out the following resources: WooCommerce Competitor Overview WooCommerce is an open-source ecommerce plugin for WordPress.WooCommerce is often chosen by businesses that already use WordPress for their websites, as it offers a seamless integration and has low up-front platform fees. Why merchants prefer Shopify to WooCommerce Secure and reliable Shopify keeps data secure and delivers 99.99% uptime. With open-source platforms like WooCommerce, your teams are responsible for hosting, PCI compliance, and software updates all on their own —increasing potential cybersecurity threats. Better TCO Shopify’s total cost of ownership (TCO) is 36% better than WooCommerce, on average. From competitive platform fees to platform simplicity and user-friendliness, Shopify is the platform of choice for businesses looking to improve their operational efficiency. Usable and agile Reduce technical debt and empower your team to make changes faster, using clicks, not code. WooCommerce operates as a plugin for your WordPress site, with additional plugins required to enhance it. However, plugins don’t always work well together when integrated on WooCommerce—leading your teams to rely on developers even for minor changes. More capabilities Shopify's robust built-in features and highly reliable app ecosystem are built for growing brands. Shopify has a full suite of best-in-class commerce capabilities that will allow businesses to grow with us. Features on Shopify like advanced B2B, product configurations, and marketing tools are just some features we’ll provide your business—minus the technical debt. In this lesson Common Mid-Market objections - “Is it worth it?” Common Large Account objections - “Can you handle us?” Common Enterprise objections - “Can you meet all our needs and make it worth our while?” While every conversation with a prospective merchant is different, there are common objections you can be prepared for going into a meeting. Common Mid-Market objections - “Is it worth it?” Migration cost and bandwidth are too high Concerns over search engine optimization, fear of losing what’s been built Common Large Account objections - “Can you handle us?” Timing, replatforming happens less frequently, inbounds can come in very early but lack urgency Platform misconceptions, they believe industry is too complex, that shopify is for mom and pop shops and, not customizable enough Common Enterprise objections - “Can you meet all our needs and make it worth our while?” Risk aversion due to amount of work for business of their size, need very compelling reasons to move forward Platform misconceptions, that Shopify isn’t enterprise ready or customizable/flexible enough Internal politics, large tech teams protecting their territory with commercial model (revenue share %) When objections come up during the discovery process, they’re a great opportunity to dig further into understanding any doubts a prospective merchant has so they can be either addressed in the moment or inform how you want to tailor your pitch later on. We’ll be exploring how you can leverage sales plays to effectively address any objections that come up during discovery in the next course on Positioning the Shopify Advantage. In this lesson Pricing Strategy: Shopify Plus pricing FAQs: Understanding total cost of ownership (TCO) Direct costs Indirect costs: Conclusion Pricing Strategy: Shopify Plus pricing is transparent for prospects to discover as they search for a new commerce platform. As prospects conduct research, they may require clarification about how Shopify's pricing strategy would impact their business. As a seller, it's important to have a thorough understanding of this pricing model to address cost-related inquiries and provide accurate estimates confidently. Let's delve into the details of Shopify Plus pricing so you're ready to engage potential customers who are focused on the financial aspects. Two pricing outcomes, two renewal options Shopify Plus offers a pricing model based on a merchant's sales volume, resulting in either a fixed monthly platform fee or a variable platform fee, determined by whichever is greater. This ensures businesses are charged proportionately to their sales performance. After selecting the pricing option, buyers can choose between a one-year renewal term at the standard rates or a three-year term with a platform fee discount or lower variable platform rate for online direct-to-consumer sales. Monthly platform fee Merchants with monthly sales volumes below or equal to the threshold pay a fixed monthly platform fee. Platform fee pricing Term 1 year 3 year Monthly platform fee $2,500 $2,300 Annual cost $30,000 $27,600 Monthly sales VPF thresholds $625,000 $657,000 Most merchants’ monthly sales volume will fall below the $625,000- $657,000 range and will be assigned to the monthly fee. Variable platform fee The variable pricing model is intended for businesses with greater complexity, such as a corporation running multiple high-sales-volume brands from the same Shopify Plus platform. Merchants with sales volumes surpassing the monthly sales VPF thresholds are subject to the variable platform fee (VFP), which adjusts based on their sales performance. Now, let's examine the VPF numbers. Variable platform fee pricing Term 1 year 3 year Monthly sales VPF thresholds $625,000 $657,000 Online 0.0040% 0.0035% Retail 0.0025% 0.0025% B2B 0.0018% 0.0018% Determining Shopify Plus pricing Let’s review an example to uncover the pricing model that would be assigned to Unearthed Apparel, an outdoor lifestyle brand. If the sum of the VPF calculations exceeds $2,300, Unearthed Apparel will be assigned to the VPF. However, if the sum of the VPF percentage rates is less than $2,300, Unearthed Apparel will be assigned to pay the $2,300 monthly minimum platform fee. Unearthed Apparel has a monthly GMV of $1.6M between the sum of their D2C, retail, and B2B sales channels, which on average earns them $19.2M annually. They are seeking a three year term with Shopify Plus. Unearthed Apparel: 3 year renewal Sales channel Monthly sales VPF rates Variable platform fee Total monthly payment D2C Online $1,000,000 0.0035% $3,500 $4,930 Retail $500,000 0.0025% $1,250 B2B $100,000 0.0018% $180 Shopify Plus pricing FAQs: Migration Fees Merchants are responsible for determining how they want to migrate and integrate their existing systems into the Shopify Plus platform. Shopify Plus Partners can help outline potential costs and resources required. Transaction fees If the merchant plans on using Shopify Payments as their primary payment gateway: You will be charged Shopify's online and in-person card fees, which are the lowest of any plan Card rates vary by country Third-party transaction fees are waived globally If the merchant plans on using a third-party payment processor as their primary gateway: They pay the fees charged by their payment processor Additionally, they will incur a 0.20% transaction fee to Shopify to cover security and compliance costs Understanding total cost of ownership (TCO) When discussing the cost of Shopify Plus with potential buyers, it's crucial for the seller to provide an estimate of the buyer's monthly cost if requested, but the monthly cost is not the talking point to empathize with. Rather than getting into the details of the line items of their monthly statement, transition the conversation to total cost of ownership of their current commerce platform. What is TCO? TCO represents the comprehensive cost of purchasing and using a good or service from a supplier. It's used by businesses to evaluate all direct and indirect costs associated with a purchase or business activity. For software platforms, TCO is estimated over a three- or five-year period and typically includes: Direct costs Platform purchase price Platform licensing fees Platform recurring expenses Payment gateway and processing fees System setup costs Indirect costs: Technical staff overhead Management and support costs End-user expenses Opportunity cost of downtime Training and productivity losses during development Cost of downtime during implementation TCO helps businesses make informed decisions by comparing the true costs of different commerce platforms, enabling buyers to appreciate the value and potential savings offered by Shopify Plus. Competitively differentiate Shopify Plus with TCO Shopify Total Cost of Ownership (TCO) Calculator - Shopify USA Why Shopify Built this calculator: Bobby Morrison, our Chief Revenue Officer, offers an overview of the independent research that underpins our TCO Calculator. TCO talking points- Competitive advantages of Shopify Plus: 33% lower total cost of ownership 23% lower platform costs 19% lower operation and maintenance costs These advantages make Shopify Plus a compelling choice in the commerce landscape. To further emphasize this, Shopify has developed the TCO Calculator, a tool that allows merchants to calculate their own total cost of ownership compared to Shopify Plus. This tool is designed for sellers to share with their prospects, enabling them to see how Shopify Plus can help businesses reduce costs and increase revenue based on real data and research conducted by a leading consulting firm. Conclusion This course was designed to empower Shopify Partner sales teams with the skills and knowledge needed to deliver compelling Shopify value pitches that drive sales momentum. By focusing on understanding potential merchants’ challenges and aligning them with Shopify's value pillars, participants can create tailored, impactful pitches that resonate with prospects. By mastering the Shopify Value Pillars, understanding competitive differentiation, effectively handling objections, and comprehending the pricing strategy and TCO, you are equipped to position Shopify as the optimal commerce solution for prospective merchants. Use the provided resources and strategies to confidently address merchant challenges and objections, ensuring a compelling value pitch that highlights Shopify’s strengths and advantages. By connecting prospective merchants’ challenges to the solutions within the Shopify's value pillars, address and overcome competitor objections, common competitor objections, and clearly explain the total cost of ownership of the Shopify Plus platform.