B2B's Digital Coming of Age

Ubiquitous Commerce

A Transformation for B2B Marketers

By 2020, B2B ecommerce sales will top $1.1 trillion, represent 12.1% of total sales, and be twice the size of B2C ecommerce (Reference: Forrester). As B2B marketers catch digital business fever, they are shifting from purely sales-based organizations to those with sophisticated brand managers that positively influence big buying decisions. In B2B marketing, digital has finally become a true competitive differentiator, making the days of saddling field sales teams with expensive print catalogs a thing of the past.

The trend

B2B marketing teams, which to date have been characterized as super-sales-support organizations, are growing substantially as they seize mandates to harness digital tools and techniques to generate demand, nurture leads, and plot the most cost effective sales channel for customers looking to finalize their transaction. As higher proportions of marketing budget are being put toward digital ambitions and initiatives, it begs the question, why the change, and why now? 

In this piece from Razorfish, we explore three big reasons — that must be integrated and managed in parallel to maximize business outcomes:

  • An evolving set of B2B purchasing behaviors and expectations
  • Emerging threats from new and existing partners
  • Opportunities to reduce costs by leveraging digital techniques to acquire, serve and retain customers 

Consumerization: Fact or Fiction?

Business buyers acquire consumer standards

Gartner predicts that by 2018, 25% of business and technology executives in large enterprises will have an explicit strategy to drive their organizations toward a consumer computing experience. Behind this movement is the growing use of smartphones and tablets, which has reached 1.91 billion people globally – trending towards 2.56 billion by 2018, illustrating that digital consumerism, driven by a preference for mobile is part of everyday life.  Then there’s the dual-window phenomenon - an observation that if a customer has a B2B site open on one window, they are also likely to have a B2C site open in another window, prompting the question  “Why does my work experience lag so far behind my consumer experience?” 

“By 2020, B2B ecommerce sales will top $1.1trillion, represent 12.1% of total sales, and be twice the size of B2C ecommerce”

In response, B2B marketers are realizing that their customer is not a faceless company, a segment or even a persona. It is an individual, buying with the same emotions and aspirations as any consumer, except that the stakes are far higher. As business buyers equip themselves with digital tools, their behavior -- and expectations of their suppliers dramatically change. But the consumerization of B2B buying and selling isn’t simply about deploying business apps on mobile devices. Rather, it is about applying the tactics of consumerization to the B2B marketing and sales environment, helping both customers and employees be agile, engaged and productive.

The B2B buying center grows more complex

Today, it’s easier than ever to collaborate across geographies and time zones, thanks to digital tools that facilitate both communication and teamwork. As a result, B2B marketers face larger customer buying centers that take longer to make a decision, particularly to ensure the success of major, well-funded initiatives. Further, there is often a separation between those that conduct the research and those that actually approve the purchase. CEB recently found that on average 5.4 people are involved in each B2B purchasing decision. Profiling customers in these complex buying cycles requires a framework to bring the key attributes of the different buyer types together. Each buyer expects a personalized experience that meets their individual needs – while addressing the requirements of the larger purchasing team.  

As a result, B2B marketing organizations are investing heavily in digital capabilities to appeal to the unique needs of each purchasing stakeholder - on the channels that they prefer and with the content that they need. For B2B, this investment has had to push beyond the typical digital ‘experiments’ they have pursued in the past, and moved to on-going budgets that are simply part of the evolved competition for customer attention.

 

Man Using Laptop.

Business buyers will pay more for a superior experience

Business buyers have grown to expect the exceptional digital experiences they enjoy as consumers, a trend that began over a decade ago, when the premiere of software-as-a-service migrated the complex, time consuming process of buying enterprise software to a much simpler transaction, often completed with a credit card. But the business buyer’s expectations haven’t stopped there. Now, they demand experiences that recognize their personal preferences along with their preferred buying channels. Many B2B marketers take the extra step of offering contextually relevant ratings, reviews and support options to help buyers make better, more informed purchase decisions. 

Such investments are the result of a buyer that has come to expect an experience that rivals those found in the consumer world. For example, in a recent Gartner study, 72% of business buyers expressed dissatisfaction with their sourcing and procurement software, with half citing that existing systems are time consuming and excessively complex. Fifty six percent of this same survey’s participants said they regularly pay more for the product or service that offers a customer experience that is superior to lower cost providers. In fact, the research shows that B2B buyers are paying, on average, 30 percent more for the product or service that offers the better customer experience. Hence, many B2B buyers are not just willing to pay for a better experience; they are going outside their usual procurement channels to get it.

“B2B buyers regularly pay 30 percent more to the provider offering a superior experience. ”

Retail Space.

The Frienemy Digital Arms Race

In 2012, Amazon launched it’s B2B offering (then called AmazonSupply). By 2016 (along with a name change to Amazon Business), this B2B eCommerce offering had generated over $1b in revenue and is currently growing at a pace of 20% month-over-month according to Bloomberg. Suppliers, distributors and more importantly, buyers are flocking to the marketplace to leverage an established digital business model that is facilitated by a trusted brand. Known as a category killer for any market it enters, should Amazon Business be considered a friend or foe? Yes.

The B2B sales and service ecosystem is a complex web of direct and indirect channels to the end customer. What we observe with our clients on both the supplier and distribution side, is an ever increasing pressure to develop digital capabilities to meet customer expectations while enabling partners and sales teams with better, more innovative sales tools. Leveraged properly, frienemy or co-optition companies can be a valuable new channel given their ability to reach a broader array of customers than those held captive to a specific provider. Such partners can also deliver a consistent, familiar experience that buyers already know how to navigate, while providing a level of proven service.

“ B2B buyers are willing to go outside their normal procurement channels to get a better experience”

On the flip side, these channels can also be counterproductive to B2B marketing organizations looking to build direct relationships with their customers. At a time where being ‘customer-centric’ is seen as being the only true way to build competitive advantage, the threat of intermediation by an outside party is terrifying. When your customers build a trusted bond with one of your partners, they also entrust a treasure-trove of data to that partner. This can relegate your role as supplier to selling on a single parameter, namely price. It is a race to the bottom, and a fate that that many companies are now aggressively looking to avoid by growing their own digital servicing components. 

Amazon Prime Packages.
Source: Digital Trends

Beyond the Long Tail

One of the allures of B2B digital marketing is its perceived low cost on which to manage prospects and customers. In a recent Forrester survey, 50 percent of B2B executives said that migrating customers online reduced their cost to acquire customers. Fifty two percent said it reduced their cost of support. Low cost, digital techniques become particularly attractive to acquire and support customers that either buy in smaller quantities, value or volume; otherwise known to businesses as the Long Tail. These customers are often too small for a dedicated account team but too large a segment for a company to ignore. The hope is that by providing an ecommerce option, these customers will be able to effectively self-serve their transaction online, and that any queries they may have, can be managed through a centralized customer care team that can be leveraged at scale to manage costs. 

Recently, we have been helping clients realize an additional driver of value; one that spans not only their smaller customers, but can add dramatic value to their largest accounts too: sales productivity. Historically, sales people have not only had to source, nurture and close deals, in many instances they are also in constant contact with customers to manage their inventory, book repetitive orders on an ad hoc basis, and deal with purchase or service issues. As companies automate their marketing, transactional and service processes, sales teams have the ability to spend a higher proportion of their time designing and developing solutions to their customer’s key needs, and less time on lower value activities.

Toyota Website.

We are also seeing large amounts of investments in sales enablement tools. KnowledgeTree found that B2B sales reps spend 30% of their time searching for or creating content to use as part of their sales process, and yet 70% of marketing content is never used by sales due to its irrelevance. Advanced integrations that link CRM systems with content, and display it through a well-designed user experience, have been shown to be very effective in assisting sales team pursue opportunities. When sales reps are required to be ‘off-the-grid’, mobile app based solutions are seen as an invaluable tool replacing the large, quickly outdated, print catalogs of the past. Companies that are more advanced in their digital capabilities are seeking to capture, analyze and optimize their sales processes as a result of the additional data that is spun off from these systems.

Putting Together the Game Plan

Mapping your customer experience journey

In today’s digital marketing environment, you need to truly understand your buyers as individuals: they are not a business, they are people. And they are not waiting for you to solve their problem; they have access to the information and testimonials from their peers to figure it out for themselves. As a B2B marketer, you need to guide buyers through your experience. Have you clearly mapped your buyer’s journey from the moment they indicate their need to their need for post-sales service? Such an exercise is a great start, but it must also include the other four to six people involved in the decision making process. Do you understand how the needs of a complex buying center align, where their independent pain points differ, and where competing decisions will create the most friction? If so, fantastic, you are ready to consider how to build an experience that meets these needs, and puts you in the best position to capture more business. If not, you had better get started.

Define the role of each channel

Each sales and service channel provides your business a different measure of coverage or control, and is provided at a different cost or complexity. For example, a sales account team gives you a high amount of control over who and where they target, is somewhat limited in its coverage of markets and products, but is costly to maintain due to staffing, and is relatively complex to the amount of training, monitoring and management required. On the other hand, distribution partners give you broad market coverage, at a relatively low cost, however control of your brand is ceded to the partner.  Moreover, managing this relationship can be both costly and complex. The role and mix of channel usage, whether they are already being used by your company, or are being considered for the future, need to be carefully defined to ensure maximum efficiency and effectiveness of your sales program. 

Focus on the outcomes

The term digital is broadly used, sometimes so much so that it creates a dilution or argument as to what we mean by it. At its core, it is simply a technological way to achieve an outcome. So first and foremost, decide what you want to achieve as a business, and then decide how digital can help you meet those objectives. Want to capture engineers at the time they are deciding on which products they should use in their prototype? Consider using Product Listing Ads associated with information aggregation sites and search engines. Want to be able to offer customers a way to more directly purchase through your company at a lower cost to serve? Online ordering and servicing capabilities may be a good approach. Want to define your brand through innovative experiences in your space? Build emerging experiences that are relevant to your business context such as virtual or augmented reality experiences that bring your brand, product or services to life. 

Digital in all of its forms is a big investment, however that is not an excuse to ruminate on your next steps. The pace of digital change in the B2B space is accelerating, not slowing. Get involved today, it doesn’t need to be perfect, it doesn’t need to be complete, but it does require a crystal clear strategy, roadmap and action plan.

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