By Kurt Dressel, Commerce Lead, Liferay
Many businesses were already feeling a sense of urgency to launch a digital commerce initiative prior to the pandemic. The manual processes that businesses relied on in the past are typically too costly to manage and sustain. If a business is still taking orders over the phone or email, or if an employee has to manually enter order details somewhere, this represents a significant expense that is eating away at profit margins.
In addition, customer preferences for digital experiences are rising dramatically. This is a pattern that we have seen in all industries over the past five years; and it means B2B customers have higher expectations for how easy and efficient purchasing should be on a company’s website. B2B is not the same as B2C, where people have more time to browse and search online catalogs. If an employee is making a purchase on behalf of their company, this more than likely only represents 10% of their job.
The coronavirus impact
The coronavirus has had an effect on most businesses; whether they produce critical supplies and are experiencing unexpected spikes in demand, or whether they depend on offline channels and have to make a sudden switch to digital.
How should B2B sellers plan for the transition to digital-first commerce and ensure their company’s success?
- How do I find a budget?
Starting out with digital commerce does require an initial investment that includes implementation, cost of the software and the time you need to spend on research and evaluating vendors.
Part of the answer is to reallocate existing budget currently being spent on manual processes. Most sellers who work with slim profit margins already sell products for the maximum price, and there are set production costs that may or may not be optimised. By enabling self-service ordering on site, sales and service teams can spend less time on orders; and by automating the integration between all of the backend systems, streamlining workflow and bringing it into one platform, a business can significantly reduce their cost of selling and increase their profit margins without changing their price.
When you add all these cost savings together they easily present the budget to launch digital commerce. In addition, most customers prefer self-service options so, once you get past the initial launch, many opportunities open up for the business to continue expanding their strategy so that ROI grows over time.
- How do I increase orders?
One of the immediate benefits that many businesses see is that a digital commerce site allows them to reach more markets and potential customers.
By having their site discoverable online, businesses will see an increase in the number of visitors and prospects. By carefully optimising the customer journey and overall purchasing experience, it is possible to convert many of the new visitors to customers. Digital tools help to reduce the cost of finding new customers, while the efficiency of the digital ordering and service channel can improve profit margins.
- How do I compete on experience
As long as the purchasing experience offers convenience and value, most customers will pay a premium – this is especially true of B2B, which is focused on efficiency.
Focusing on customer experience also puts you in a much better position to weather unexpected changes. Many B2B sellers who were already focused on customer experience had some of the best responses to the coronavirus crisis.
- How do I sell more with a small marketing budget
Launching a new site, especially if it is a direct one, requires you to invest and promote it to existing customers. So, if a company relies on a fairly small marketing team and a fairly small marketing budget, this might not seem possible. For situations like these, more and more B2B sellers are taking on multi-channel marketplace approaches. At Liferay, we have also seen an increase in vertical marketplaces – a trend that will continue for the next few years.
Selling through a marketplace is a great option for B2B sellers as it can dramatically lower spend on both marketing and customer services, while increasing reach to potential customers. This is because it’s the job of the marketplace to drive traffic to the site and ensure that the right customers are making purchases. Usually, the marketplace will have marketing tools to use, such as ways to optimise your product page or a paid promotion offering which allows you to spend your advertising on a much more targeted audience.
One potential problem of a marketplace is that customers may end up having a relationship with that marketplace rather than the business itself. This means it can be difficult to contact customers directly, and the business has less control over the customer experience. Many sellers mitigate this by having a direct site and selling through marketplaces with a multi-channel strategy. For example, they may sell cheaper or simpler products through marketplaces, and reserve their more complex products for their own direct channel. This is a really neat way of blending these strategies because then you score the benefits of customer acquisition through the marketplace, whilst creating an opportunity to transition those customers on to your direct site and increase your orders through the channel over time.
Though B2B sellers face many new challenges in today’s market, many of them can still be addressed with a keenly-focused digital commerce initiative. Looking towards the new year, focusing on cost savings, keeping a customer-centric perspective in mind and understanding all of the digital channels that your customers prefer to use, you can help your organisation find success and long-term growth through digital commerce.