Why should you consider implementing B2B e-commerce? According to Forrester Research, it is growing to twice the size of B2C e-commerce and is expected to reach $1.13 trillion in sales in the U.S. by the end of 2020. And, B2B buyers increasingly expect a B2C-like shopping experience. To be clear, we’re talking about your customers that are not already transacting on EDI, but instead are using sales channels.
“The buyers that are working in organizations that purchase B2B goods have been exposed to B2C selling at home. These B2B organizations’ employees prefer to purchase the things they need for work in the same manner that they purchase things for themselves.”
– Gene Alvarez, B2B analyst, Gartner Inc.
If you’re considering pursuing B2B e-commerce, you need to do some planning. Let’s say you’ve built your business case for implementing e-commerce into your digital ecosystem or you’ve determined your sales goals. In talking to existing and potential clients over the years, I’ve found that this is often where B2B initiatives stall out, typically due to the same four fears.
These Red Herrings stop otherwise competent organizations from beginning a lucrative path down the e-commerce trail. Read on for my summary and how to overcome them.
Fear #1: Resistance from the direct sales force
B2B e-commerce hugely increases the efficiency of sales organizations by removing time-intensive manual processes. This added efficiency should allow a sales force to focus on generating new business. However, the inside sales force often views online channels as a direct threat to their livelihood.
But here’s the reality. Research shows that people want to do routine reorders/replenishments themselves. Forrester (yes…them again…) has found that nearly 75% of B2B buyers indicate that buying from a website is more convenient than buying from a sales rep. That’s the bad news for your sales reps, but it shouldn’t come as a surprise.
Despite the increase of self-service, B2B buyers still want interaction with a sales associate, but not in the ways you would assume. The buyer’s preference? Negotiating prices for large orders, costly or complex purchases, or when a buyer requires installation or service. So here’s the good news—this is where you want your reps focusing their time—on the higher value transactions and not on refills.
HOW TO ADDRESS IT:
- Transform your sales force into consultants. These types of employees are most valuable in continuing to nurture business relationships, formulating solutions, and understanding customers’ problems.
- Communicate the upside. If your sales force can be freed up from administrative tasks, they can then focus their training and relationship development on true, value-added services and intelligence to end customers. Consider developing a compensation model that will give credit to your sales force for transactions performed in their territories as an added incentive
Fear #2: Cannibalization of existing channels
The shift to online transactions can yield higher customer spending across all channels. But many organizations in the B2B space ask the important question, “What is my ROI on implementing an e-commerce system if I already have the sale using my existing sales force?”
It’s obvious by now that one size does not fit all. Customers buy multiple products across multiple channels. However, in order to achieve channel harmony, it’s important to collaborate with—not compete against—offline sales operations and your retail partnerships.
As we’ve already established, self-service options are trending online. If your company doesn’t provide an online portal to your products, you’ll lose the sale to Amazon Business, who is probably already aggressively going after your customers. E-commerce cross-selling and upselling engines support much more complex and effective logic than the best B2B business salesperson ever could. (I say this with love, as a B2B sales guy myself.) What this means is that your e-commerce program won’t cannibalize the sale you already had, it will protect the sale you were about to lose to a more convenient channel.
Think about it. In addition to saving your sale, a B2B e-commerce program will provide you with pure, unbiased data on your customers that can be used to develop data-driven sales models and offerings. This increases your organization’s value hand over fist in the customer’s eyes and helps to build brand loyalty over time.
HOW TO ADDRESS IT:
- Realize you can actually expand your reach by capturing useful customer insights. It’s always better to shift the sale to the channel a customer prefers most, rather than lose business to a competitor. How do you enable this shift? By converting transaction data into actionable customer profiles. You’ll easily be able to track the number of transactions, web traffic, and leads, and you can reach even further to deeply analyze these insights. The more you can understand about how your customers choose between different channels, the more informed recommendations you can make to maintain customer retention. You’ll have hard behavioral and transactional data on all your customers, which will empower your organization to understand the persona of each different buyer.
- Realize you can actually expand your reach by leveraging e-commerce data to future proof your business. Good e-commerce retailers perform regular tests to compare performance. Better e-commerce retailers use this information to further implement online and across other channels to support business goals. The best e-commerce retailers exploit this intel from their platform to extrapolate more actionable data. With a B2B e-commerce program, you can spot trends, determine the most highly desired product line, and understand the decision-making process that can lead to a sale. Without an e-commerce platform, it’s likely that this information is highly fragmented across your sales force.
Fear #3: Disrupting current business
I often hear, “I don’t have time to implement e-commerce, and it’s going to disrupt the other business initiatives we have in motion.” It’s true that e-commerce is complex and can be disruptive. But that’s exactly why you need it—your current business is already being disrupted by e-commerce trends in the B2B world.
Forrester notes that by the end of 2015, almost 60% of B2B buyers made one half or more of their work purchases online. To meet the shift in how customers buy their products, companies must integrate the hearts and minds of the organization. In addition to addressing the needs of your sales team, it is crucial to align marketing, IT, and leadership when navigating the e-commerce landscape. If not, the disruption and demands on your internal teams can be catastrophic.
HOW TO ADDRESS IT:
- Give your marketing team the resources they need to perform. Marketing must produce compelling content, offer a frictionless buying experience, and delight B2B customers at every moment—be those offline, online, or on mobile devices. Ensuring that your marketing organization is involved and ready to assist in providing a steady stream of content is necessary when implementing an e-commerce program. Great online experiences are image-heavy, informative, exclusive, and ultimately drive customer loyalty. Gaining insight, guidance, and recommendations from your marketing team will align the sales journey with your brand every step of the way.
- Get your IT teams connected and on board early. Few B2B companies can manage an e-commerce integration internally. Companies need various layers of platform and infrastructure software and services. To thrive in an e-commerce space, an IT team should architect and deliver technologies, systems, and processes as part of a larger engagement strategy to win, serve, and retain customers. IT needs to enable real-time transfer of information between the ERP, CRM, DAM, reporting, customer service, and other systems. It’s integral to pair your B2B e-commerce team with an integration partner who can provide your organization the tools needed to produce a seamless experience across customer-facing technologies. Lastly, maintaining internal back-end systems necessary to source, track, and fulfill orders will ensure business success.
- Leadership must be all-in. Because of the various disciplines and departments involved, a B2B e-commerce initiative will fail at your company without executive leadership team buy-in. Aligning all of these organizations to meet business goals needs an effective, steadfast leader at the head of the ship. Forrester's Andy Hoar says: “B2B e-commerce leaders must participate in the transformation of the organization and, at the same time, build and maintain a world-class e-commerce operation capable of adapting in real time to ever-increasing customer expectations … B2B e-commerce leaders must hold a steadfast belief that B2B e-commerce is essential to the future success of the company.” Ultimately, leadership should not only be actively involved in a B2B e-commerce deployment, but should also cultivate an ongoing interest in and support for e-commerce broadly across the company.
Fear #4: What if I choose the wrong platform?
If this is a fear of yours, it’s legit. B2B is complex. For example, one of the biggest requirements of a B2B e-commerce platform is that it supports variable pricing, custom catalogs, and user account management. Since every customer negotiates unique pricing and discounts, it is critical that the right products and the right pricing are displayed at the right time, to the right users.
Businesses must require users to register and sign in when purchasing on the site, allowing the system to automatically display the necessary information. And then there’s your sales force—how will configuration, pricing, and quotes be handled within the system? And customer service? Accounting? Lines of credit?
B2B and B2C e-commerce platforms are vastly different, so it’s no mystery that your requirements must be fleshed out and documented before knowing which platform is right for your organization. My bias is usually toward a platform that will enable you to quickly develop a pilot e-commerce program for some of your preferred customers to prove your business case. You do need to choose carefully, but sometimes “analysis paralysis” can—and does—get in the way of getting a pilot program out quickly.
HOW TO ADDRESS IT:
- Analyze internal IT resources and budget allocation. To determine the right platform technology and licensing model, your organization should make the time for an introspective look at all capabilities—both logistically and financially. Unless you have an internal point person that is well-versed in the complexities of B2B e-commerce in all lines of business, you should enlist expert help to ensure your requirements’ gathering is complete. Odds are, despite your best efforts, your platform will need extensive customization. No two organizations are the same. You should consider the ongoing support of the platform after it goes live and how you want to resource this investment in the future.
- Consider a phased approach and MVP-first model. Invest in testing and proof of concept development with a trusted partner or internal resources to ensure your platform is going to function correctly. Some platform providers will even negotiate pilot pricing before making a huge capital investment. A phased approach reduces your risk and will arm you with real data upon which to make your business case for a full-blown deployment.
The B2B e-commerce market is growing rapidly, and many of your competitors are already there. This list of potential fears and how to address them are a fantastic starting point, but there’s a lot more to discover. Use these considerations to guide discussions with internal stakeholders to make bold moves into the e-commerce frontier.
If you’re prepared to begin the conversation of how to get your business online and selling to other businesses, let us know. We’re here to help.