If the incredibly rapid evolution of business-to-consumer (B2C) e-commerce over the last 10 years offers any lessons for business-to-business (B2B) companies, surely the importance of engaging customers in the place they want to buy is high on the list. After all, let’s not forget that business buyers are B2C shoppers; they’re just getting paid to shop.
Accordingly, B2B companies need to know their customers as intimately as any B2C enterprise. The reality, however, is that most B2B enterprises rely on distributors, value-added resellers (VARs), reps and other intermediaries to manage that knowledge. Sometimes, that reliance is well-founded and the intermediaries provide an accurate and valuable conduit for information.
Too often, however, these mediated channels provide companies with mediocre – or worse – intelligence and as a result force companies to operate without the critical ability to know their end buyers.
Think Like a Retailer
More and more, B2B companies are working to improve their channel experience by thinking like a retailer. B2B companies looking to innovate in this are benchmarking themselves not just against their competitors, but against the most popular online retailers as well.
They are taking note of how easy it is for consumers to research, locate and buy the products they need. They are realising that thinking like a retailer means making the buying process more streamlined for their business customers. Thinking like a retailer doesn’t mean ignoring the important differences between B2C and B2B customers; it does mean looking critically at a number of specific features of your B2B e-commerce offering to make sure you’re taking advantage of the best of both worlds.
Content and Usability
Talk to any company in the B2B space and you’re likely to hear the phrase, “…but OUR customers are different.” Or the variation, “…but OUR product line is different.” While these are accurate statements, it’s also true that B2C and B2B buyers will have much more in common than they realise. Consider, for example, the B2B buyer’s “hierarchy of needs.” For a good experience, all buyers need:
- Easily accessible information;
- The ability to find the products quickly and simply;
- Great search capabilities;
- Relevant promotions, offers and discounts;
- Robust account management capabilities; and
- Self-service capabilities, including customer service, product configurations and price quotes.
Building a Channel Ecosystem: Know the Product, Get Buyer Visibility and Pay the Channel
One of the toughest aspects of evolving a B2B e-commerce business is freeing up buyers to purchase in their preferred channels. Buyers, like consumers, increasingly want, and expect, to buy how, when and where it suits their needs. Unfortunately, this desire for flexibility can run counter to the needs of existing distribution channels, including many that are valuable and lucrative to the manufacturer.
Historically, B2B companies sold direct to their customers limited by geography and the cost of maintaining a direct sales force. This model is still in wide use, of course, but it has been supplemented over time by the development of complex distribution channels based on distributors, resellers, agents, reps and more. Over time, most firms reached an equilibrium among their channels based on profit maximising principles. Changes, when they occurred, were slow and incremental.
The Internet and the growth of e-commerce was a disruptive technology for this carefully balanced system. First, the cost of direct selling plummeted in comparison to other channels as the Internet made it possible to connect with customers worldwide. Now, as business buyers become more like consumers in terms of their expectations of an on-line purchase experience, the balance is shifting still further as they express a preference for the flexibility of buying like their B2C counterparts.
Flexibility, however, introduces a host of potential challenges that a B2B online commerce program must overcome in order to be successful. Here are some recommendations and best practices for diagnosing, managing or overcoming these challenges:
Know your products, who buys them, how and why
Product and customer segmentation is a keystone to maintaining channel harmony. It is important to use meaningful segmentation to develop a channel map that supports sales objectives. Are there certain classes of buyers, for example, that value customised versions of specific products?
Do some customers value the attention of a dedicated support team? Do some customers want flexible contracts while others are comfortable locking into a five-year usage agreement? Do customers want different versions for their mobile devices, laptops and their datacenter? By answering these questions, it’s possible to maintain an appropriate level of discipline across channels.
Get visibility into channels and credit appropriately
Many organisations struggle with the unintended consequences of B2B e-commerce sales. Without knowing where buyers are, it’s difficult to know where revenue from the sale should be attributed. Properly aligning a direct B2B operation within your overall corporate structure will give it the best chance for success.
Additionally, it is important to be sensitive to internal, direct and channel sales organisations. How will the compensation of sales teams, partners and resellers be affected by a shift in channel sales? Change can be difficult, particularly when it may affect people’s income and their standards for evaluation. A smooth transition requires that these kinds of complications are taken into consideration before implementation.
Incentivise the channel
As direct-to-buyer B2B e-commerce sales increase, the reseller channel will take notice. Incentive programs – commissions, bonuses and other performance incentives – should be structured to motivate the channels in ways that do not undercut the direct online channel. Additionally, it is critical to create trustworthy and constructive alliances with key channel partners.
Some companies incent their channel partners with attractive commissions for services, maintenance, or renewals sold direct to the buyer online even when the buyer was acquired through the reseller. This approach frees the channel from the cost of the initial customer acquisition, while benefiting the company through a higher renewal rate than could be achieved through the reseller channel.
The B2B sales ecosystem is evolving and the pace of change is accelerating. Adding a direct-to-buyer on-line channel is inevitable and a “consumer-grade” buying experience is rapidly becoming the new minimum required standard in turns of buyers’ expectations. Successfully adding this channel is less of a technical hurdle than it is an organisational challenge in terms of balancing the myriad sales channels in a new, profit-maximising configuration. The good news is that there are already real-world examples to emulate and learn from and more are sure to follow.