Simplifying complexity: why B2B online sales need a simple online response
The launch of B2B marketplaces from eCommerce companies such as Alibaba and Amazon has placed a renewed focus on online stores for B2B organisations. It’s no surprise that it’s attracting attention. According to analyst group Frost & Sullivan, the global market will be twice as large for B2B (valued at $6.7 trillion) than B2C by 2020 (valued at $3.2 trillion).
The experience of the B2B buyer is critical in converting sales from offline to online purchasing. Get the self-service approach right and sales conversion rates are much higher for B2B (7.3 per cent) than with B2C (3 per cent) web sales, according to Forrester. And of course online B2B selling offers companies a quicker route to market and a potentially a lower cost of sale. While you wouldn’t eliminate your sales force, there is likely to be an awful lot of sales that can be driven to self-service.
Understanding that the B2B buyer has more complex needs than his consumer counterpart is an important first step in building an online store that delivers the best customer experience.
Too often B2B companies try to replicate a B2C online selling models, and this approach fails to take into account the differences between the two types of purchasers. In a B2C environment, single consumers have a single product need, meaning that the order quantities are small and visits to a website low frequency and sporadic. Consumers need a webshop to deliver a fixed price, simple direct payment and short descriptions of a finished product. Often the consumer finds a webstore through a broad search, and is likely to buy elsewhere if they find the product is out of stock.
By comparison the B2B buyer is often part of a multiple decision making group that can include the purchasing department, finance and senior management, as well the team who need the product. They’re also more likely than their B2C counterparts to be categorised by bulk orders or specialist items that require volume discounts or trade agreements. Most will already have long term relationships with the company having bought repeatedly on previous occasions. And they’re expecting those discounts to be applicable just for them, based on a negotiated agreement and paid for on credit. In many cases products are often raw materials or very niche so the buyers need specific information, exact measurements and considerably more information than their B2C peers. Order and delivery times differ too. B2B buyers will have specific logistical agreements that can vary widely – from immediate delivery for items like spare parts, to periodic deliveries for wholesale and even longer lead times on made to measure products.
These complexities mean that B2B organisations need to consider the features and functions of their webstores carefully. Utilising existing data held about your customers, typically on your ERP system, is an effective way to manage and reduce the complexity of a B2B online web purchase. So how else can you ensure that your online sales platform is able to deliver to meet B2B buyers’ multifaceted needs?
Multiple logins for a single basket
Different customers within a single customer organisation will have different requirements from your webshop: buyers specifying the actual product will need to see product specifics; managers who are required to approve orders will need to see an overview of the basket along with discounts, shipping costs and so on; finance however will need to access the invoices; whereas warehouse and logistics will need to view delivery options.
Multiple logins for single organisations can help you to manage complex pricing structures keeping prices hidden until individual buyers have passed through established checks. It means that each buyer receives a personalised page with exactly the information they need to progress a sale.
B2B customers require specific pricing based on their profiles. This means that webshops must ensure that customers can see the right products, prices and discounts whenever they login. Since this information is already held in the ERP system, it makes sense to integrate your e-commerce solution with your ERP system.
By making your ERP system the foundation of your e-commerce, every time you change any price structure in your ERP, or you add new pricing rules for a certain customer, it is immediately visible in your web store.
B2B webshops will need to provide customers with multiple shipping methods and since customers can order from anywhere, shipping costs will need to reflect export costs. Integrating your ERP with your e-commerce solution eliminates shipment mistakes. 91 per cent of respondents to our recent survey stated that manually processing offline orders is one of the main reasons for shipment mistakes.
Webstore front end
In our recent survey poor design and navigation led to 37 per cent of buyers leaving the webstore. Often the front end doesn’t reflect what the customer needs or isn’t particularly easy to navigate. Finding the correct product in a vast catalogue can make the buying experience even more complex. Consider, for example, a manufacturing and engineering company that sells a technically complex piece of production equipment. While customers may initially buy a single piece of equipment offline, there may need to place a subsequent order for spare parts. The customer will need to be able to find the part quickly and easily – especially when faced with a production line that has come to a halt. Yet, maybe there is four or five parts that are similar – how does the customer know which one to buy? Utilising order histories from the ERP system your webstore can identify the machine that was originally purchased and show that information to the customer. Detailed specification sheets with measurements, and even a video clip of how to replace the part and fix the machine could also be viewed on the same page.
Increasing revenue opportunities
The ability to understand customer needs means that your webstore is able to deliver a seamless buying experience. Utilising your data can allow you to even predict buying behaviours of the customer. If the data in the ERP can see that a purchaser buys different products at different times of the week, month or year, or that they switch between products, the e-commerce solution can use algorithms to present these additional products proactively as cross or even up-selling opportunities.
It makes sense to simplify the ability to repeat purchases using single click ordering. While this strengthens your long-term relationships with customers, it can also help to open the door to automating your sales. Based on information about on- and offline order history available in the ERP, new quotes can be generated automatically. What happens when the product is no longer available to order? Using the order history the webstore can recommend an alternative product.
One of the biggest challenges for online selling lies with stock control. Products can often be ‘double sold’ if there are a number of sales channels (phone, fax, in person, online). Integration with the ERP systems means that everyone (who ever is checking, however they’re checking) sees one version of the available stock as soon as the stock page is accessed. What’s more B2B organisations who have integrated their e-commerce solution with their ERP system can use the system’s knowledge to provide buyers with stock arrival insights, so they can place orders in advance.
By making online buying simple and easy, companies will reap the benefits and a return relatively quickly. Most B2B organisations that launch a truly integrated webshop witness strong sales as customers embrace quick-order, repeat buying and the ability to view real-time inventory availability. While the B2B buyer maybe more complex than their B2C counterparts, the online buying experience doesn’t have to be. Using the data that’s already available to you from within your organisation can make B2B buying less and less complex. You just need to know how to use it.
by Michiel Schipperus, Sana Commerce