If the business drivers are the same for B2C and B2B, – why has there been such a lag for B2B companies to offer the same type of customer experience as B2B when the top line revenue opportunities are much greater?
Such was the question I had for our eCommerce technical guru who recently finished work for a global telecommunications provider (working for another now); when we talked about the differences between B2C and B2B since telcos encompass both; and are highly complex given their global footprint and security concerns.
A few differences that came up in conversation:
1. Real-time availability is required…or “available to promise date” if not in inventory. This is critical in the B2B environment.
2 . Payment terms – B2B transactions may or not be paid during checkout. Most of the transactions that we see are Purchase Order based.
3. Shipping terms and conditions – B2B customers more than FedX and UPS for their shipping suppliers.
4 . Invoice payments – B2B customers having numerous invoices aggregated for payment every month. Doing that online is a growing requirement.
5. Fast order entry – most B2B customers don’t like to “browse and shop”.
Digging a little deeper:
B2C e-commerce systems generally have a simplified structure that communicates a paralleled brand message and product catalogues across the same group of customers.
In B2B e-commerce, this requires a more advanced system in which products and prices are customized to different groups of customers. A high degree of personalization creates streamlined process flows, eliminating browsing for the needed product catalogue for order.
Differing customer relationship
The purpose of B2C e-commerce is not only to sell products and services online, but also to drive traffic, increase and strengthen brand awareness, and educate customers on catalogues and promotions. Generally, there is equal focus on customer retention and bringing in new ones.
In B2B e-commerce, the purpose is to increase and strengthen existing business relationships overtime, and cut costs of searching and dealing with new vendors. B2B e-commerce involves lower traffic, but higher AOV.
In B2C e-commerce, the purchase process is much less complex. The buyer is usually also the decision maker. Purchase power is often influenced by brand loyalty, consumer recommendations and reviews, and consumer preference and taste.
The purchase process in B2B goes much beyond a single buyer and one decision maker. Purchase processes in this type of commerce generally involves a number of highly knowledgeable buyers that consult numerous executive decision makers. Orders are made based on the needs of the company such as raw materials for a manufacturer.
B2C transactions are done at the point of sale on a web store via credit or debit cards, or even customer gift cards.
In B2B transactions, payment processes are set up on account-basis. Consumers place their orders electronically on the web store, and receive the invoice for the purchase to process the payment.
Something in the back of my head said there is more to this.
Since my conversation with our Director revolved around the telcos, I did some research and on what is driving eCommerce for this industry and it’s a familiar story.
I found a fascinating survey by Intershop. Visit the Intershop web site to learn more: ecommerce-manager.com.
What’s driving change in telco? – Sounds a lot like B2C to me
“In the telco sector, all of this potential change is driven by an average of nine factors:
- 83% of telecommunications companies said change was driven by customer demand and expectations
- Developing technologies and permitting what was impossible before (76%)
- Business buyers engaging through various offline and online touch points with their peers (71%)
- Using multiple information sources to make decisions (71%).
- The use of mobile devices (70%)
- Competitor activity and performance (68%)
- Corporate revenue/market share growth initiatives (63%)
- Web 2.0 technologies enabling new ways of collaboration and relationship building in the B2B environment (63%)
- Supplier and supply chain issues (63%)
For nearly half (48%), the biggest challenge is providing intuitive and user-friendly interfaces for multiple touch points such as the B2B online store or mobile apps. Two in five (41%) say they find it hard to manage complex organizational structures such as different user roles, multiple business models such as B2B, B2C, B2B2C, and B2X, multiple commerce touch points and multiple data domains. 40% find it difficult to deliver responsive and flexible customer service in order to respond quickly to any customer request.
Yet, over half (51%) agreed that bringing business buyers from offline to online could result in a higher overall bottom line and 48% said it could result in higher average basket values.
Of the telecommunications B2B organizations surveyed in Europe and the USA that already sell online, the average percentage of B2B revenue from online sales is 38%. Of these, 96% are planning to increase the percentage they sell online, by an average 22%.
When it comes to the features needed in a B2B store to offer B2C-like merchandising, over three quarters (76%) of telecommunications organizations understood the importance of intuitive search and navigation, as well as online store analytics/monitoring in real time (71%).
Keen to support their sales representatives and account managers, 70% of the telecommunications businesses interviewed would like to be able to view sales reports such as total sales, or sales value by cost center. Over two thirds (68%) would like to create and manage B2B accounts, cost centrers and budgets, and 68% would like to be able to allow account managers to negotiate quotes.
Mobile: Of those telecommunications organizations that say mobile commerce will be important in the next 12 months, a total of 58% are planning to create a mobile-optimized store version that allows business buyers to see products, to purchase, to access their account profile and to track orders. 47% plan to create a mobile app that allows business buyers to see products, to negotiate the price, to click and buy and to track orders.”
B2B eCommerce drivers for change are very similar to B2C, however, the underlying B2B complexity has been the inhibiting factor. Pretty obvious now that I break it down. It was a natural occurrence that the lesser complexity of the B2C space would lead the online charge for so many years. That momentum has been slowly changing over the recent past, and with the much larger revenue projections for B2B vs. B2C one should notice an enormous shift in the B2B experience.
This shift will happen much more quickly when marketing departments realize that labels affect their own perceptions of user experience. So let’s throw out the term B2B and replace it with P2P. People-to-People. People who go home and watch Game of Thrones; that put videos of their kids on Facebook; read in bed with an iPad.