Many challenges are making it hard for companies that rely on B2B selling models to drive growth. However, with the following five e-commerce strategies, B2B commerce leaders can leverage technology to overcome these common B2B challenges.
Facing Major B2B Challenges
Commoditization of products. Complex manual processes for simple tasks. Growing customer expectations. These are a few of the common issues B2B organizations are dealing with, which make staying profitable even more challenging.
Additionally, the combination of the internet with globalization further exacerbates this challenge for B2B sellers as buyers can easily purchase products that are almost exactly the same, making differentiation even harder and putting vendors in a position where the only thing they have left to compete on is price.
But competing on price will not be a profitable long-term strategy. Instead, B2B sellers need to focus on how to distinguish their business from competitors, reduce time and money spent in manual processes, and meet customers’ rising expectations.
Tackling with B2B Commerce Strategies
The good news is that these challenges end up creating opportunities, through e-commerce strategies, to create new experiences for customers. Here are the five main strategic initiatives that B2B commerce leaders can leverage to overcome business challenges:
- Transforming Manual Processes
Manual processes are often too expensive, so digitalization and automation are strategies to reduce costs and take better profit margins. This is generally translated into a self-service site where customers can make a purchase through the store instead of calling a sales rep. Even though this is a great strategy and a necessary one, it is the first step almost all B2B commerce leaders will take. Soon, all competitors will have done it, and they’ll be back to competing on price, so it is important to go further and look at enhancing the customer experience.
- Improving Convenience for Customers After digitalizing processes, a B2B leader should look to improve convenience for customers, distinguishing themselves on the basis of customer experience. The goal is to become so valuable to customers that they’ll pay a premium for products or services, instead of demanding a lower price.
Customers have already shown that they’ll pay for convenience. The more one company can decrease the time customers spend on a simple activity, like reordering, the more those customers are able to spend time on things that actually matter to them. And that’s something that’s hard for the competition to copy. Delivering a customer experience that will take a while for the competition to catch up with will be a much more sustainable competitive advantage.
- Selling Directly to Consumers
One way to bypass the middlemen in the selling process and improve profit margins is to directly sell to end consumers. This strategy is becoming particularly popular with manufacturers who have traditionally sold through a distribution network, who then sells to resellers, who then sell to retailers that then actually sell to an end customer. Selling directly to consumers reserves more of the profit margin for manufacturers and allows them to have better control of their customers’ buying journey so they can ensure customers have a better experience.
This is a good strategy for manufacturers who have strong brand recognition among end consumers. For example, a Nike shoe can be sold directly to consumers by its manufacturer because Nike is a well-recognized brand, whereas an unbranded manufacturer who makes zippers on clothes consumer buy would find it very difficult to sell their product directly to end customers.
- Selling through Marketplaces For companies that determine that selling directly to consumers would not be the best strategy and that there’s not an opportunity to compete on experience, selling through a marketplace can be an alternative to reduce costs. Major marketplaces like Amazon or Ebay, for example, are already motivated to acquire customers on their own, which means that sellers can reach those audiences at lower cost by selling their products through the marketplace. On top of this, sellers do not have to worry about managing customer service, as these marketplaces will handle the entire customer experience, including returns, calls, etc. For sellers that have very slim margins, this opportunity to save on marketing and service costs may be a compelling offer. Increasingly, customers have also shown that they prefer buying everything from one place over visiting multiple sites. So instead of trying to build a direct-to-consumer site that compete with marketplaces like Amazon, it may be a better customer experience strategy to allow customers to purchase everything they need through one site rather than convincing them to come to a direct site for just one product line.
- Transitioning to Recurring Revenue Finally, B2B commerce leaders are putting together strategies to establish subscription models rather than depend only on one-off transactions. This strategy goes hand-in-hand with the previous ones listed and can vary in many ways but from a high-level standpoint, it helps companies guarantee future revenue.
Since customers will pay for convenience, getting them on a subscription model means that there’s less worry about winning them over every single time. This is especially useful for B2B manufacturers that can offer an automatic order service that tracks stock levels and automatically sends a reorder request, saving time for the customer.
By leveraging e-commerce technologies, B2B leaders can start to tackle common business challenges. However, most homegrown systems will not be capable of supporting these new strategic initiatives and instead, these leaders will need to consider other e-commerce technologies that will be able to help tackle these business challenges.