What’s the secret to B2B e-commerce success? Hint: It’s not technology!
While we normally think of B2C marketplaces like Amazon when we think about e-commerce, there’s a revolution starting to take place in B2B businesses. Manufacturers, brands, and distributors are beginning to recognize the possibilities that B2B e-commerce offers. In fact, by 2020, Forrester predicts that B2B e-commerce will top $1 trillion in revenue.
But it’s not just about installing some software to be successful. Instead, many businesses need to undergo an organization-wide digital transformation in order to achieve higher revenues and growth goals, and even to stay relevant to their customers.
Defining digital transformation
Digital transformation is the transformation of an organization’s approach and execution—not to a purely digital company, but to one that recognizes that digital is now at the center of everything it does. This often occurs when an organization recognizes the importance of digital to its customers and stakeholders—both internal and external – and then acts to meet their expectations for personalized and relevant content, product information, workflows, and buying across all touch-points. That includes websites, mobile devices, social media, marketplaces, and other platforms. A successful digital transformation ultimately leads to greater revenue, profit, and enterprise value.
Real opportunity cost
For businesses that chose to ignore this revolution, stalling or foregoing a digital transformation, there is a real opportunity cost. Consider these facts:
- Approximately 90 percent of B2B buyers use online search in their search process;
- Nearly 75 percent of all B2B purchases are completed before the buyer contacts the supplier
- The percentage of business purchases completed online is expected to nearly double by 2020.
(Sources: Google, Pardot, Marketing Sherpa, CEB, Forrester Research)
Of course, companies that don’t recognize these trends are likely dooming themselves. Think about companies like Blockbuster, Kodak, and others who stuck their heads in the sand when other companies innovated in their sector. Even a behemoth like Walmart is playing catch-up in e-commerce—despite investing billions of dollars in digital tools and resources, it still lags Amazon in terms of online market share.
By proactively undertaking a digital transformation, organizations have a massive opportunity to become hyper-efficient revenue machines that will drive growth. To do this, businesses need to think beyond simply putting their catalog online and deploying a shopping cart. They need to consider how they will shift their operations while bringing everyone on board.
Unlike B2C e-commerce, which can gain efficiencies by driving sales through online channels while reducing physical stores and the number of sales associates, B2B companies can actually benefit from powerful interactions between their digital platforms and their sales team. E-commerce ROI models for brands and manufacturers are commonly built around increased revenue from more efficient channels and making the organization more efficient.
Now, I know your sales team is probably thinking, “There go our jobs,” when they hear about going digital. But here’s the truth: E-commerce isn’t going to replace your sales team. In fact, your sales team and your e-commerce platform work together to make each other more effective.
Your secret weapon: Digitally enabled sales team
Business is and forever will be about relationships, and your sales team is the main touch-point with your customers. Placing sales teams at the center of a company’s digital transformation brings the customers’ needs into the forefront and amplifies your teams’ capabilities to manage relationships.
For example, my firm recently worked with a leading commercial paper manufacturer and distributor. In the paper industry, buying decisions are made based on instant access to critical product data, such as inventory availability. Our client, which is a multi-billion-dollar company, built and deployed an in-house mobile app for their sales force that enables their sales teams to see real-time information about products, including what is in stock, how long delivery will take, detailed product specifications, and other data essential to their customers’ purchasing decision. In the past, much of this information was available only from the back office—through phone calls, emails, and in-person follow-ups—and sales reps couldn’t close deals on the spot. But now, with this information at their fingertips, they close more sales faster because they are able to add value to their customer’s decision-making process instead of waiting around for someone in the back office to tell them if their customer can get their order on time.
The results? The company’s proprietary app now accounts for almost half of their e-commerce revenue, and it does so at a markedly higher gross margin. Speed and accurate information outweigh price in the buying decision, and by providing critical data the instant it is needed, the company wins more business, more profitably. The key to their success (and eventually yours): Our client involved their sales team early in the process of developing the mobile app, listened to their needs and challenges, and then deployed a digital tool that amplifies their strengths and lets them operate more efficiently.
Getting it right: Aligning tools, sales, structure, and process
So, what will it take to undergo a digital transformation? In my work with dozens of B2B firms, I’ve found there are essentially four stages to aligning the tools with the organization and the sales team:
- Stage 1 – Develop online content sites: Be they internally or externally facing, your business requires a digital presence that provides your sales team and customers with the information they need to do their jobs, including product data, application/user guides, and support information.
- Stage 2 – Deploy e-commerce platform: At the minimum, this is a basic shopping cart and payment gateway to enable online transactions. Today’s B2B buyer expects to transact on your website.
- Stage 3 – Align selling channels/omni-channel: This is where things get fun and you start to see some efficiencies. In this stage, you fully empower your sales team with the digital tools they need, you provide your customers with the online self-service capabilities, and you offer advanced mobile capabilities.
- Stage 4 – Complete digital transformation: Digital is at the center of all customer interactions, and your organization reaps the most financial and operational benefits.
Some organizations are already on their way, while others are lagging behind. The key, of course, is to get your sales team involved early in the process and throughout each phase, and to develop incentives for them to use the system, such as paying commissions on non-assisted sales that occur in their territory. Sales enablement tools are also becoming more prominently available and more cost-effective. These solutions tie content together with customer relationship management to provide direct and instantaneous support to sales teams in the field.
More to come on this in a future post!
No matter where you find yourself in this journey, if you would like to learn more about how you can leverage B2B e-commerce for your business and capture the enormous revenue and efficiency benefits available, reach out to me! I’m a quick email away at email@example.com.