After years of lagging behind, B2B digitization is finally gaining momentum. The numbers don't lie – currently, the global B2B e-commerce market is now more than five times larger than the B2C market. This should not come as a surprise since the digital transformation of analogue B2B companies has many advantages. By lowering cost to serve, automating processes, and collecting more detailed customer data, B2B digitization is making organizations more efficient than ever before.
However, the journey towards B2B digitization is not without its challenges. Unlike B2C businesses that can be set up as relatively stand-alone e-commerce platforms, B2B players face unique obstacles. Industries such as manufacturing, construction, and wholesale businesses often have to contend with internal legacy systems and a customer base that includes influential, long-standing clients with specific preferences.
In this pursuit, five B2B-specific topics must be considered to overcome these challenges and successfully navigate the path towards digitization.
1 Pricing legacy
Overall, the B2B sector is known for its customized pricing, where customers can avail themselves of discounts, rebates, promotions, and volume tiers based on their size and purchase volume.
Remember that pricing is not always just about the numbers. Actually, these digits can also be related to the customer’s negotiation skills and the eagerness-to-meet-sales target of that account manager who had already left your company years ago. Plus, some customers might have the privilege to get special discounts and rebates, which was required back in the day to ‘close the deal’ and get them onboard.
Unfortunately, this variability in pricing creates multiple customer journeys, making it difficult for most companies to offer a B2B e-commerce platform that maintains transparency without compromising the loyalty and satisfaction of individual customers.
In some instances offering a B2B e-commerce platform might sound simple, however, most companies might want not to be too transparent here. Instead, they should assess how to implement fair and consistent pricing strategies for all customers while maintaining confidentiality and transparency.
2 Differentiated service offerings
Powerful customers in the B2B sector often receive the privilege of special and tailored service packages. These packages can range from free deliveries and returns to complimentary installations, repairs, and maintenance. Some customers may only receive free delivery or may even be required to collect their own products. Others may receive comprehensive service packages that include free product installations, restocking, repairs, and maintenance.
Managing these diverse service models poses a significant challenge for B2B e-commerce managers. Why does that happen? Each service must be formalized and incorporated into the e-commerce platform to be presented to the appropriate customer during the checkout process.
Therefore, a critical consideration that must be addressed is the risk of disappointing loyal customers by failing to offer the services they have come to expect over the years or even decades. Providing a seamless, individualized experience for each customer is essential, offering special treatment for high-value customers while ensuring that all customers are treated equitably. This requires developing a flexible, personalized service model tailored to each unique customer journey.
3 The right channel for the right customer
Undoubtedly, deploying an e-commerce platform constitutes a great technological avenue in a one-to-many relationship, where you simultaneously serve many different customers. But what about 20% of customers representing 80% of your sales volume?
In many SMEs (or even corporate businesses), these customers might contain multiple branches located in different cities or countries, and some might even have multiple procurement managers. These dynamics cause interactions and transactions between your company and customers to occur on different levels and more often than you think. When digitizing this in a B2B e-commerce platform, you might want to watch out for simplifying this too much, as this might potentially cause additional work on your customer’s side.
Which large customer would want to switch back from hitting the hotline to your best account manager and instantaneously getting served to be redirected to the B2B e-commerce shop? In fact, the customer may not have the time nor desire to navigate through the platform manually, browse products, input details, and complete the payment process.
4 Customer specific assortment
Companies might be fortunate when their customers are all very similar, as limited segmentation is required. Other companies might not be so lucky and sell products (or services) to B2B customers, such as offices, hotels, restaurants, bars, factories, schools, hospitals, supermarkets, retail shops, airports, and train stations.
Therefore, some customers may have different needs for the products, ranging from raw materials for production to end-product sales and internal consumption. Consequently, it is essential to implement an overarching product-customer mapping to prevent customers from being overwhelmed with endless pages of irrelevant products that are not intended for their specific needs.
Ensuring customers have access to products specifically designed for their needs is a critical concern for companies. For instance, a supermarket may require smaller consumer-focused products packaged under their private label, while a restaurant might require larger packs. To avoid presenting irrelevant products and pages of endless options to customers, it is important to devise a clear product-customer mapping strategy when offering your assortment on a B2B platform.
5 Getting tech and data ready
In terms of tech & data, B2B e-commerce transcends the limits of a mere e-commerce platform. As we discussed in the aforementioned pitfalls, B2B e-commerce involves digitizing long-standing transactional processes between companies and their customers.
Over time, IT systems have been established to facilitate these transactions, and they should be integrated into the B2B e-commerce platform. Furthermore, all historical master data related to customers, products, distributors, and others must also be incorporated into the e-commerce platform.
If your customer migrates to e-commerce processes, all relevant master data usually provided throughout the transaction should be present. Hence, customers would need to see all the historical transactions, extended product details and mappings, delivery and installation instructions, etc.
No reason not to start
Even though these five complex topics might intimidate business leaders, they should remind them that the journey will not walk by itself. Yet, the fact that the B2B e-commerce market has already grown five-fold serves as evidence that it is a feasible and enticing avenue. When doing it the right way, digitization can be a big competitive advantage for a B2B SME business.