Ecommerce is for the retailers and consumers. This is completely wrong, in fact there is more value and trade for the B2B then for the retail, it is true that retail has led the way and continues to be at the forefront, B2B’s are adopting ecommerce at a faster and faster pace.
48% of companies in the US now conduct 50-70% of their corporate purchases on line. In addition to this 23% of companies do more than 75% of their purchasing online. This was in 2018, before COVID kicked in accelerating the migration to online purchasing.
Trinidad is also seeing a big push towards online purchasing both for B2C and B2B. Here are some misconceptions or lazy assumptions about consumer behaviour that sometimes overestimate the difficulties of setting up online channels and strategies. If not fully researched they can limit the ambition amongst companies.
Misconceptions regarding B2B
Misconception 1: B2B buyers don’t want to purchase online
We hear too many times in different formats. Anything from our customers want to see us and do face to face business. This is a very popular myth used by many as an excuse to justify why they are not online, this is not just in Trinidad and Tobago but also in the US and UK.
The facts are that the the majority of the current generation of B2B buyers are frequent users of ecommerce websites for their personal purchases, and increasingly the future generation that replace the older generation of buyers will, not only more comfortable in purchasing online but will also have a preference to purchase online as it more empowering and less friction.
They expect to be able to make their B2B purchases online like they do for their personal purchases and without the need of a face to face meetings. In the US 44% of the purchases are being made by the millennials while 33% are making recommendations or influencing the purchasing process. The millennial buyer is already to hear.
B2B buyers want self-service functionality, clarity on pricing and all the related information for the product, all online and in one place. Email is preferred over telephone if communication needs to happen, and when researching prefer to have the information on hand without having to wait for it to be sent. Hence not only does the information need to be online it needs to be easy to find.
More and more B2B buyers are making online purchase channels a factor in choosing who they purchase from.
Misconception 2: Online ordering is cold
The second myth is a variant of the first, customers need that personal touch, a face to face meeting and online is cold and sanitised.
The truth is that those organisations that have been pushing online, have a much deeper understanding of their customers then face to face agents. Online they can give a very personalised experience and treat each customer individually. Any promotions, emails, marketing can be very targeted with very relevant emails and engagement. You can collect information on your customers and then use algorithms to engage them in an extremely personalised way. The irony is that the same people that claim online is cold also agree that Google and Facebook have too much information on them and seem to know what to recommend and what I am interested in.
This is not to say that face to face is dead, buyers want to be able to pick up the phone and speak to someone or have a face to face meeting, but only when it’s important and it adds real value. To place a routine order, they prefect to do it in their own time without any engagement, to raise a query they may want to speak to someone on the phone and if there is an issue or an opportunity then an in person face to face discussion. They want to achieve the best and most efficient channel of engagement for their objective.
Misconception 3: Online stores negate custom orders
Custom ordering and pricing are key fundamentals of B2B business models and are a result of negotiations between the two parties.
This is also an easy myth to break. Most B2B sites now have variable pricing engines that allow you to categories your customers into different groups and offer personalised pricing to customers. You can also offer discounts based on bulk ordering and run promotions to specific sets of customers. In most B2B businesses you do not have custom prices you have Tiered pricing based on the size of the customer and volumes. Buyers that are doing frequent purchases do not want to go through a long negotiation cycle each time they wish to make a purchase, they may do the first time but after that want it to be seamless. Also having different prices without a qualifying criteria can lead to other issues if other buyers find out that they are getting a higher price then their competitors without a good reason.
However, even if this is the case, then online can still act as a lead generation and a channel to start the sale and it can then be completed via a phone call and some level of personal intervention. It is still a superior option then the current manual one.
Misconception 4 Price Transparency is needed for ecommerce
Sellers are concerned about revealing B2B pricing because it creates a race to the bottom, as they hold the position that buyers decide on price alone and fail to consider other key buying points such as quality of service and after sales service.
As explained above, you do not need to reveal your price online, you can ask customers to raise queries or generate leads of interest. You can just showcase your products, but for returning customers you can create accounts for them so that pricing is revealed once they login to the system and then you are able show them their personalised price.
Now let’s take a quick look at some of the benefits of going online. We will not spend too much time on these areas. I think they should be obvious.
Advantages and Benefits of B2B ecommerce
Advantage 1. Customer reach
Many of the current B2B buyers and the majority of the future ones are using digital devices throughout their daily lives. They are on social media like Facebook and IG, and also on professional networks like LinkedIn, just like the rest of us. The research and vetting methods for these B2B buyers is also digital. A 2020 survey showed that the top 3 research resources for purchase are :
- Web search
- Vendor web site
- Review site
If you have an online presence you can optimise site to rank high on searches for your product and services. If you’re not online then you’re not even a consideration, you just have to hope that none of your competitors are online, on the reverse, if you are online and your competitors are not, then they are not even in the game.
It’s not just research you want to offer, it’s the ability to complete the full online purchasing process. If they want to place an order at 2am on a Friday night then let them do it, more and more your competitors are letting them do it.
Advantage 2. Ability to manage your suppliers and customers more efficiently
By being able to manage your supply chains you are able to give your customers a more beneficial experience.
When a company is small it is agile, decisions are made faster, there is less wastage. Digitisation of the supply chain shrinks the operations as you start to automate, you can get a much higher visibility of the different parts of the chain and in real time.
This results in improvement in the management of inventory in return resulting in greater transparency for customers. You can be transparent about stock availability and delivery timescales.
Through the ecommerce website you can also get richer deeper insights into the customer buying habits, which helps businesses to learn more about buying patterns, seasonal trends and you can match your production/supply. Trinidad is more ethnically and religiously diverse, not to mention all the cultural uniqueness, all of these create different purchasing patterns due to Diwali, Eid, Christmas, Carnival, Indian Arrival day, etc….
Advantage 3: Sell more to existing customers
In B2C, it costs five times more to attract a new customer then to keep an existing one. It is true you can onboard new customers much more efficiently on a digital platform, but the real value comes from being able to increase your sales to your existing customers.
The online purchasing experience is much more relaxed and convenient to the buyer. The traditional method is when your salesperson visits the customer or the customer visits your physical site. This requires a lot of coordination, will the buyer give you his undivided attention when you get there, do you have limited time with the buyer, will you be interrupted by the operations of the business, and the list goes on.. Compare this to the buyer being able to make this decision from the comfort of his chair at a time convenient for the buyer.
Data can be used from existing customers to give them a personalised experience and personalised offers for products that are relevant and compliment their business at the time when it makes sense, same way Google gives you hotel options after you receive a flight confirmation email. You can increase the customer lifetime value.
E-Commerce opens up the potential for automated cross-selling and upselling recommendations to customers, by highlighting the relevant products that complement their purchasing profile. You can push the more profitable products.
Advantage 4. Data and Analytics
One of the most strategic reasons for going online is for collect the data. It is needed to futureproof your business. In the day of the tomorrow, RAP (robotic process automation), ML (Machine Learning) and AI (Artificial Intelligence) will become more and more the operational part of running a business.
Automatic triggers, thousands of decisions being made in real time everyday will give businesses a competitive edge to provide a very efficient and responsive experience to the customers. None of this is possible if you do not have the data, you can’t train your algorithms, you cannot tap into the power of this technology.
The sooner you start to collect the data, the more ahead of the curve you will be, the quicker you can start introducing ML into your back office and reap the rewards by gaining competitive advantage, increasing your profitability and market share.
Analytics can help you understand profitability by customer, you can see what your most profitable channels are so you allocate your resources more effectively. Using metrics such as CPA you can compare marketing channels and switch resources. Using A/B testing models online is much easier. You can do this with colours, words, images to tweak your online presence to the nth degree.
Even if you don’t follow or can’t think of how you may be able to use the data, ignore it at your peril. Remember Amazon collected data for years without knowing what they will do with only that they will do something with it. The reason by Google search has no competition is because they have the historical search data that they use to improve and train their search algorithms.
If you move first and you move quickly, not only can you collect data quicker than your competition but you can starve your competition of data in the future making it very difficult and costly for them to catch up.
B2B Ecommerce Marketing
Regardless of your hesitation for taking your B2B business online, let it be known that there is nothing needed for a B2B online business to prosper that cannot be done.
However you need to understand that you will need a new skill set and need to operate differently to succeed, as the digital platform opens up new ways to building relationships and engaging with your customers.
Here are some of the factors that will help you grow your online sales and market to your online customers. Allowing you to streamline your operations and focus on getting your products into the hands of your customers and consumers.
Make no mistake your competitors are working on this.
Educate Customers on products, features and promotions.
An online strategy that weaves content into its online marketing strategy has real beneficial applications. In the online space you need to present all the information to the customer, if you don’t then your customer will go somewhere else to find someone who is and there is an increasing probability they will find one as your competitors continue to enter the online space.
You need to load images, descriptions, ingredients, nutritional values, weights, sizes, colours, materials, textures, use cases, etc… This can be with text, images, videos, audio, diagrams etc… Without this you will be sending customers from your online funnel into your competitors funnel.
Online channels have transformed into online educational channels that are acting more like information hubs. The reason is that this is how you build trust with your customers and once you have their trust then you get their business.
This is the parallel to wine and dine and meeting customers over food and drinks, in the digital world trust is done through free education. Similar to the purpose of this document.
Migrate customer from offline to online
There is an increasing number of the B2B customers preferring not to use phone and fax and even email to make purchases and this continues to accelerate as the baby boomers continue to retire and vacate their purchasing positions and the millennials and Gen X continue to fill these positions.
Locally as owners start to take a back seat and their kids step in, they will also prefer to and feel more comfortable doing business online. This will creep on your very quickly and catch many businesses off guard, but those that are prepared and have started the journey will be able to capitalise on this.
Millennials don’t want to email, they want to be able to fill in a form online or use a chat box to ask questions.
No matter when and how you introduce your online channel to your customers there will be concern, you need to communicate the benefits and help to migrate them across, some will be easier than others, some will be early adopters and some the late ones. The sooner you start that process the sooner you can migrate and start to realise the benefits, also the sooner you can start to get feedback and go through the iteration process of refining and maturing your online experience.
Using technology to solve ongoing customer challenges
Getting the order correct is imperative, mistakes here can cause major disruption, having much bigger impact then in a B2C transaction, hence it is essential to have the right systems. Many businesses will need to upgrade their internal systems first before they can deploy an effective online strategy.
A good ERP or OMS (Order Management System) is needed so you can have a single source of truth. Powered by API so that data can flow between systems and no double entry is required. In addition to acting as a single source of truth the APIs can also have other benefits.
Real Time Inventory
Having your ecommerce integrated with your inhouse inventory system allows you to be transparent with your inventory, and customers will find that very useful.
APIs can be used to send information to your fulfillment dashboard, so your staff and customers can track the orders to see what stage they are in.
Once the platform is launched you can then look at ways to start to increase your sales. Loyalty programs can be used as one of these tools. Loyalty programs can be engineered to increase sales by either increasing frequency of purchase or incentivising bulk purchase.
A well crafted loyalty program will increase loyalty and pay dividends by increasing the Life Time Value of your customers
Align business processes and teams to scale
Resource efficiency is a big problem in most organisations. Many organisations will hire very skilled individuals, but due to noise and operational factors, 80% of the time they will be doing low value tasks and only get to work on high value items 20% of the time.
This can be a finance person, who spends a lot of time doing data entry or managing people doing data entry, checking numbers and reports or it can be a good sales person that spends most of their time fulfilling clients (customer service) rather than selling and bringing in new business.
Going digital you can automate repetitive tasks, you empower your customers to do more for themselves, relying less on your staff, freeing your staff to focus on high value tasks. Imagine if you could increase your employees high value item focus from 20% to 40%, it’s like having a second high value employee, or you can reduce the headcount of teams.
The other issue you need to be careful of is that you make your ecommerce implementation as part of an overall strategy and organizational structure, otherwise you will introduce more noise and work which will slow you down or erode the benefits. A mistake too many organisations make is having the wrong people owning the ecommerce strategy, people who do not have the knowledge and skill to be able to deliver a successful strategy. It would be fair and obvious to say that you are highly unlikely to have an inhouse digital transformation skill set if you are not doing it. You will not have any experience.
The mistake you are in danger of making is listening to a podcast, reading an article, doing some research and then thinking you know have comprehensive skill to carry out this task, you will make expensive mistakes, it is better to bring someone in or work with an external party to cross train and transfer. Digital Transformation is not an IT led project.
Reduce back office costs and sunset legacy systems
Ecommerce platforms are developing at a rapid pace, as they start to mature, they are expanding more and more into an organisation’s depth. Often replacing/replicating existing systems, they do this by a combination of developing features and integrating other smaller focused modularised solutions.
Api integration into our existing systems is also a good way to expand the reach and benefits of an ecommerce platform, however, many businesses have old legacy systems that can not be integrated with.
It is important for you to understand the roadmap of your ecommerce solution provider to be aware of the value you will have today and more importantly the value you will get in the future.
Ensure ecommerce compliments all other sales channels
Make sure you deal with the internal channel conflicts, this is a common pain point when introducing ecommerce. Naturally your existing B2B sales people will feel threatened and will think that the ecommerce platform is there to replace them.
This does not need to be like this, with the correct strategy and communication you can educate your sales people on how to harness the power of the platform for them to reach and exceed their targets.
Ecommerce platforms can assist the salesperson by reducing the time spent in order taking and increasing the time they can do actual new sales.
Sales people only need to get involved if the sale becomes complex and falls outside of the functionality of the ecommerce platform.
Creating Value with the human side of the transaction
Like all sites UI/UX is extremely important, but you need to understand what this means in terms of a B2B customer.
This does not translate to visually appealing and consumer-like shopping experiences. A B2B purchaser has other priorities and criteria to a consumer purchaser.
You need to focus on things :
- Product content
- Product packaging
- B2B type of search and presentation (tabular)
- Site performance
- bulk/repetitive ordering
- Efficient sales funnel (e.g they are purchasing 200 items)
Empowering the buyer to be able to complete the purchase on their own is part of usability and personalisation for the buyer.
Assume that the buyer will be engaging with your platform cross-platform, so a responsive design is critical, it also can help your own sales staff to place orders from the field.
Creating value with the business side of the transaction
No two customers are the same, so although you may not be able to customise for each specific group, you will find that most customers do operate similar and hence being able to cater for a few groups will allow you to achieve a high level of engagement with your customers.
This will allow you to build one to one relationships. Categorise your products so that customers can select which category they are interested in, that way they do not have to deal with all the products that they are not interested in.
Align the workflows with the way your customers do business and hence reduce friction, saving them time. For example if customers have a 2 step approval process, then your ecommerce solution should support that. If they need to get a quote first, then allow them to generate quotes.
Payments also need to be customised, are they paying by cheque, cash, CC or on terms, if terms then let them know what their credit limit is, allow them to see their outstanding AP with you.
Challenges to executing a successful DX
A 2020 Gartner report found that while 91% of the organisations are engaged in some form of digital transformation and 87% of the executive team claim that digitisation is a priority, only 40% of the organisations brought digital initiatives to scale.
According to the Everest Group 87% of the enterprises fail in their digital transformation initiatives, the research firm cited abandoned projects, poor user adoption and unsustainable returns as the main reasons for failures.
Following is a list of the most common reasons cited by organisation for failed projects :
- lack of employee engagement
- inadequate management support
- poor or nonexistent cross-functional collaboration
- lack of accountability
- data privacy and security concerns
- budgetary constraints
- limited in-house skills and expertise
- regulatory and legislative changes
- immature digital culture
It is a misconception that the ecommerce world cannot support the needs of B2B sellers and brands.
It is not a misconception, however, that your brand may not be ready.
Be sure to allocate the appropriate funds to your B2B site launch, including work with partners and agencies to build the unique tools you need.
Though you may need to make an investment, the increase in revenue you can expect vastly outweighs this initial expenditure.