the number one digital challenge facing b2b today

IBM Commerce | #1 Digital Challenge Facing B2B Today

#1 Digital Challenge Facing B2B Today

IBM Commerce


Foreword

The world of Business to Business (B2B) is making strides to catch up with its Business to Consumer (B2C) counterpart. And the race is definitely on; Forrester’s latest B2B eCommerce report forecasts online sales of $780B in 2015 in the US, 12.7% growth Year-on-Year, with a growth propensity topping $1.13 trillion by 2020.

This rate of growth is reflected in the UK, as traditional B2B organisations are increasingly

engaging with both existing and new customers through digital and online sale channels.

IBM recently hosted an open round table here in London to discuss the temperament

and disruptors in UK B2B Commerce with a number of key industry influencers and subject

matter experts. We explored the challenges faced, but equally the opportunities

and notable success stories.

Our discussion centred on what the #1 Digital Challenge Facing B2B is today, and what

opportunities this may present to the new digital seller. We also explored the importance

of the user experience and the supporting infrastructure, as well as managing organisational

and cultural change in the implementation of a new digital B2B strategy.

It comes as no surprise that the dialogue of the session very quickly expanded into

the role of multi–Channel campaigns, technology, people, culture, and business change.

These facets were explored in great detail and we have summarised the highlights

and key insights in this report.

Imran Choudhary IBM Commerce Lead


Mark Adams

Founding Partner of eComp

eComp is an IT strategy & eCommerce

advisory business focused on technology

strategy and business transformation,

omni-channel technology evaluation and

project audit services for B2B and B2C.

www.ecomp.co.uk

Matt Mullen

Senior Analyst, The 451 Group

A preeminent information technology

research and advisory company. With

a core focus on technology innovation

and market disruption, providing essential

insight for leaders of the digital economy.

https://451research.com

David Burnand Director of Stein IAS

An-award winning global advertising and

B2B marketing agency. Stein IAS bring

together deep thinking, specialized

expertise, proven processes and advanced

technology to place clients at the vanguard

of global B2B marketing.

http://www.steinias.com

Steve Borges

CoFounder of Biglight

A creative ecommerce agency that helps

brands deliver excellent experiences

without compromising their ecommerce

ambitions. Biglight creates intuitive user

experiences, engaging creative and

compelling content to inspire customers

and drive sales.

http://www.biglight.co.uk

Meet the panel

Our round table comprised of the following experts:


Digital Strategy: Building the right platform

A lot can be learnt from the success B2C organisations having ‘gone digital’ over the past

ten years, although B2B organisations and vendors alike potentially face a more complex process.

In the knowledge of which B2C success traits are common to B2B and just as importantly those

which are not, the key is finding the right balance when starting on the digital journey.

The world of B2B is very different to the world of selling online as a B2C outfit, although this

isn’t stopping B2B brands taking B2C designed eCommerce platforms and trying to retrofit

them to adapt to the specific nature of their own B2B business model and processes. This

‘retrofit’ typically results in heavy customisation, lengthy deployment times, and inevitably,

higher cost.

When breaking down the core differences between a B2C and a B2B operating model,

there are several factors affecting this disparity; at the outset, a solely B2C focused

eCommerce platform does not align to the specific business processes of B2B.

The facets of this are outlined in the table below.

B2C Business Model E.g. High Street & Online fashion retailer

B2B Business Model E.g. Pharmaceuticals distributor

• Focus is on new customer acquisition• Same Terms for all customers• All customers generally treated the same • Standard payment options• Single unit sale• No approval process required• All customers have access to the same

assortment of product• Re-Order/Repeat orders not typical• The customer is the end-user

• Focus is on customer retention• Pre-Negotiated contract terms• Pre-Negotiated pricing for individual customers,

projects, and contracts• Personal relationships (Account & Service Teams)• Advanced and varied payment options (invoicing)• Bulk & Pack Sales• Approval processes & Authorisation Processes• Multiple stakeholders, departments,

and decision makers• Segmented product assortment based on customer,

project, department or contract with pre-determined terms)

• Re-Orders & Repeat Orders common• End user works in the customer enterprise

Versus


On this basis, and with the stark difference in business models, the importance of selecting

the right base commerce platform designed to adhere to the specific nature of B2B is key

to the success and on-going scalability of a B2B online sales channel.

The biggest challenge is around technology, most software providers started off as frameworks focused on retail areas rather than bespoke provisions for the B2B marketplace

— Mark Adams - eComp


Krannich Solar GmbH & Co. KG

Krannich Solar GmbH & Co. KG, a solar power wholesaler, realised this challenge when they

looked to transform their sales processes through using online commerce. The act of ‘going

online’ was based on the simple premise of improving the order-taking process with the added

challenge of managing not only a large catalogue of complicated products, but also managing

thousands of solar power installation companies, each with potentially different buying and

discount entitlements.

Before Krannich Solar launched their online sales channel, customers typically placed orders

via the phone. Staff then had to manually check stock levels and determine whether the

customer was eligible for any discounts before quoting or taking an order. This time-consuming

process would result in delays in providing quotes and taking orders. Furthermore, sales

found they where spending more time with administration and resolving customer problems

versus selling.

Fully cognizant of the opportunities to transform their sales processes and drive a competitive

advantage to acquire new logo business. Krannich Solar selected an online commerce

solution which was designed with B2B in mind, leveraging IBM’s B2B eCommerce Starter

Store. The end result being a platform that enables customers to see prices and stock levels

in real time, order goods around the clock on a self-service basis, and view and select from

available delivery slots - or choose to collect their purchases from a local branch - all without

sales assistance. The solution also allowed customers to track the status of their goods and

view order history. All key functionality not only critical to trading successfully online but also

aligning to the complexity of contract governance.

Business results came from a 30% increase in new customer acquisition

and shortened time from order to cash.


Common Interests

IBM’s recent Digital Benchmark Analytics survey saw mobile conversion rates rise to 1.3%,

with 2.7% on tablets in retail transactions There is no doubting that the mobile industry

is revitalising the way that organisations function and in-hand, how buyers behave.

B2B organisations are thus acting quickly and taking advantage of the wave of responsive

design methodologies and ‘lessons learnt’ from their B2C counterparts over the last five years.

Evidently within SME environments, where large buying departments and stringent

procurement processes don’t exist on the same scale, more and more transactions

are derived from mobile devices.

Mobile has become the ‘must have’ in the retail environment, and in B2B it serves as a game

changer and major source of competitive differentiation.

Further similarities between B2C and B2B companies exist in relation to customer

experience, personalisation, mechanisms for merchandising, and general good practise

of trading a successful online platform.

To meet the needs of today’s sophisticated customer, the user experience delivered by B2B websites needs to be as refined as that offered by the best B2C retailers

—Steve Borges, Biglight

In addition to the eCommerce aspect itself, organisations must also remember that the sales

process features a strong educational element; effective B2B platforms are there to educate

the customer to the point of sale, even if they don’t handle the transaction itself.


74% Studies have shown that 74% of the purchase research is done online before the buyer talks to the vendor – organisations need to ensure they are part of this journey

—Steve Borges, Biglight

Not all engagement with the customer via digital means should be related to a direct call

to transact. Building value through education, enriched product information and support

guides effect loyalty and return visits.

This is where a granular understanding of the buying journey is important and not every digital

interaction necessarily warrants a follow-up sales interaction – we have to remember that often,

end consumers are reticent to the perception of ‘being sold to’. An online sales platform plays

an important part here. Customers now expect and ordinarily have access to a wealth

of information before engaging in the face-to-face stage of the sales process

and potential purchase.


One B2B organisation that has taken a B2C approach to personalising the online customer

experience is Kemofarmacija d.d., a leading wholesaler of medical and healthcare products

and devices, with a range of more than 16,000 products and chemicals some of which are

highly regulated.

Kemofarmacija d.d realised they could drive more profitable sales through precision marketing

by gaining insights in to their customers online browsing, habits, and purchase behaviour.

Through integrating their content management and ERP systems they could ‘connect the dots’

with the insights they had collected on the customer, therefore personalising promotions and

recommended products based on really knowing the customer and performing the best next

action making every promotion and personalised experience – relevant vs. generic.

Major revenue benefits to Kemofarmacija d.d, increasing sale order lines by 30%

and diverting close to 90% of all sale orders through the web.


Sale Channel Alignment

Whilst the online channel in B2B in most cases does not replace personal selling and account

management, it offers customers the control and flexibility to browse and purchase at their own

convenience, and enables B2B sellers to focus on building stronger customer relationships

and new customer acquisition.

With advances in technology, delivering highly effective, cost-efficient multichannel campaigns that achieve outstanding results is crucial

—David Burnand – Stein IAS


The evolution of the digital buyer has fostered a shift in focus from a traditional sales

approach to an increasingly customer-centric paradigm. The insight given, for instance,

at lead handover point can provide more transparency of where digital interactions fit into

the buyer cycle. Sales professionals can detect buyer pain points if this content is mapped

correctly to the buyer cycle and provide a new perspective on what was traditionally classified

as a ‘lead’. Again, this may lead to cultural change as sales leads become more qualitative

and the focus lies in 20 qualified opportunities as opposed to 100 more standard alternatives.

The cycle continues as sales professionals, now more informed about their buyers, can work

to foster an experience of a higher quality and the role of marketing is to enable that process.

“It is about equipping sales people with genuine insight so they can approach every relationship and potential sale with all the information they need. Most systems now are able to give a lot of insight and analytics. They are able to offer a whole new perspective. Able to give sales teams a further role in marketing resulting in a high quality customer experience coming from the sales teams”

—David Hogg, IBM


Bringing all sales channels together and transforming the B2B organisation to be truly

multichannel is where significant business value can be gleaned. Over the past two years

Nucleus Research have analysed organisations which have leveraged IBM Commerce

as the core to building their multi-channel strategy and operations.

What is even more interesting is how this ROI has increased by 23% from previous studies

conducted by Nucleus for their 2013 report. This reiterates the continued growth in demands

of the B2B buyer, and equally the competitive advantage B2B organisations can take if they

take a lead and start to implement their multichannel capabilities ahead of their competition.

The return on investment is higher than any CRM or analytics investment,

with an average return of $14.79 to every dollar spent.


Final Remarks

Complete alignment across the business from the sales force to the leadership on the B2B

eCommerce strategy and vision is key. The prospect of implementing business change

can be daunting, but works best as a business philosophy driven from the board level.

The need for all teams and departments to understand that the customer’s path to purchase

is across multiple channels and not just dependent on one is critical to the business building

a multi-channel ethic into its core DNA of selling, operating, and managing the customer.

When the entire organisation takes ownership for the customer journey, this stretches beyond

the typical sales and marketing departments. IT involvement is therefore crucial and their value

must be communicated in helping the organisation become a digital leader.

Implementing such a change can seem large-scale and present stumbling blocks, cost and lengthy

timescales, but the most effective way of starting a new platform is to start with a particular territory

or to roll out the software platform around a specific campaign or product launch. From there it is

more practical to shape out the wider strategy, before reverse-engineering to define the ‘starter’

phases which are easier to consume and test return. The challenge is that most B2B organisations

are trying to start the journey with having everything on day one of launch. Start small but have

the bigger picture always in mind; selecting the right foundations and commerce platform is critical

to ensuring online channel and marketing can start small but accelerate quickly to cope with larger

demands and volumes as the business starts to pick up pace and maturity.

B2B Research Assets

B2B Commerce Effectiveness: 5 Key Components of Successful B2B Commerce https://ibm.biz/B2BSuccessTraits

IBM B2B Commerce http://www-03.ibm.com/software/products/en/category/b2b-commerce

Krannich Solar B2B Commerce Case Reference http://www-03.ibm.com/software/businesscasestudies/us/en/corp?synkey=T135685C33453N68

Kramp B2B Commerce Video Reference https://www.youtube.com/watch?v=yM1ey-DbQxo

the number one digital challenge facing b2b today

Internet