The 4 +1 Ingredients of Success in B2B Commerce
Successful B2B commerce needs to focus on four pillars: effective customer segmentation, differentiation, clear objectives and the bundle of right people, processes & technology. Those who have this in order, belong to the top of the online salespeople, according to Forrester Research.
But digital sales are on the rise. According to Forrester, there are four issues that you need to think about carefully if you want to be successful in e-commerce as a B2B vendor:
- Effective customer segmentation
It is important to find out who your best online customers are and which offline customers are influenced online in their purchasing process. You do this by mapping out the interaction between the B2B buyer and your company. If you have a good knowledge of the customer journey across all touchpoints, you will discover whether there is friction in the process that stands in the way of conversion. Remove these barriers, as soon as you have identified them.
Then, determine which customer segments are most profitable to you. The RFM model, a model for the analysis of customer value, is a good starting point for this. Focus on the top 25 percent of your customers and then go and see how you can turn demand into conversion from other important segments.
- Differentiation is of vital importance
A regularly performed objective SWOT analysis gives insights into where you stand on the market, and in relation to your competitors.
If you excel in a certain area, stick to it. ERIKS, selling technical products, for example, has grown up with a high level of (offline) service. When they wanted to also serve a more self-service oriented clientele, it was decided to set up a separate company for this purpose: ZAMRO, with an online-dedicated business model. As a result, there was no friction among ERIKS' existing customer group, and new markets could be entered.
- Clear objectives (and measure whether you are achieving them)
Be realistic, but also dare to be ambitious. The KPIs you choose to measure whether you are on your way to achieving your objectives should highlight the different sides of your business. This has also been one of the most popular topics of the B2B digital commerce group. For example, you measure customer satisfaction with the NP score or by having social sentiment measured in relation to your brand. The sales side is highlighted using the average order value, total annual turnover and the amount of recurring orders. On the cost side, the KPIs are focused on, for example, the costs per order and the costs of customer service.
- The right people, processes & technology
Hire people with a digital DNA who are simultaneously obsessed with the customer, is the advice of Forrester. Of course, your existing employees must be part of the digitization process.
People need the freedom to apply best practices in e-commerce (an interesting source for this is this LinkedIN group and this YouTube channel of the B2B digital commerce group). What matters is that everyone has the same mindset and is focused on excelling.
Plan your budget for two years, with the flexibility to respond to changes. If suddenly expertise is needed in, say mobile commerce, then the budget needs to be shifted.
You also need an e-commerce solution which is able to integrate easily with an ERP, CRM, Order Management and Product Information Management system. If your business model requires extensive B2B-commerce functionality, a scalable and mobile-ready software is of highest importance. After all, you don't want to change platforms every time you grow or need to add a touchpoint, or expand internationally. If your organization is not so ambitious and/or you don't find it such a problem to change platforms after just a few years, then you might be suited well with a more basic commerce solution.
And a fifth bonus success ingredient: flexibility
What else you need is a long breath, says Forrester. Change takes time - consider a period of three to five years before the full potential is realized. In e-commerce, this is an entire era. Therefore, your commerce platform must have the flexibility to quickly and easily grow with you, respond to changes in buying behavior and adopt new technologies.