The B2B buyer’s online shopping basket is increasingly seeing more action. Alex Blyth investigates the rise of ecommerce among businesses
If any reminder was needed about the importance of the Internet as a sales channel then it arrived recently in the shape of a report by The Boston Consulting Group. Entitled The Connected Kingdom: How the Internet Is Transforming the UK Economy, this report revealed that the UK Internet economy was worth £100 billion in 2009, 7.2 per cent of GDP. The sector is now bigger than construction, transport or utilities, and it is likely to grow by about 10 per cent a year, reaching 10 per cent of GDP by 2015.
The report also pointed out that approximately 60 per cent of this total is the amount that Internet users spend on online shopping. Indeed, the UK’s attitudes to buying online has been transformed in a decade, and ecommerce has become a key concern for B2B marketers.
The story so far
B2B marketers have tended to approach ecommerce cautiously. For example, Actinic has been selling its software and services to SMEs through the online channel for the last 14 years. However, as Bruce Townsend, marketing manager, says, “Our product is a technical product, so sales require a certain amount of consultation. The majority are closed over the phone. You can market online and they may order online, but make sure you also meet face-to-face, or at least talk on the phone. Businesses buy from people, not from robots.”
The complex nature of B2B sales blighted many early attempts at ecommerce. However, those B2B vendors who were unable to make their offers available online have now been bypassed by those who are adept at this new channel.
Eight challenges to overcome
While many B2B marketers have become more enthusiastic about ecommerce, and a good number are now highly savvy to it, most still wrestle almost daily with the following common problems:
1. Reliable hosting
“Website performance continues to be the main challenge for B2B marketers,” says Neil Barton, director of web hosting company Hostway. “Research carried out by TNS earlier this year found that online retailers were losing up to £5.65 billion per year in lost sales due to poorly performing websites, and this issue is equally applicable to the B2B market. Many of today’s websites contain much more multimedia content than ever before – such as images, videos and podcasts – in order to attract visitors to their site. However, this can also result in longer website loading times or even sites crashing. So B2B marketers need to make sure that their website infrastructures are able to cope with demand.”
2. Engaging site design
When it comes to online, B2B customers are just as fickle as consumers,” says Mark Simpson, founder and president of Maxymiser. “They’re just as easily bored by dull site layouts.” He argues that B2B brands should have as rigorous approach to usability, design and content testing as that routinely employed by B2C ecommerce providers. Furthermore, they should avoid unnecessary tinkering.
3. Easy check-out
B2B marketers can get carried away with the data capture possibilities of the Internet and make online checkouts too complex. Simon Black, MD at Sage Pay, says, “There is a clear need for B2B companies to offer their customers a wider and faster choice of business payment options that go beyond the usual BACS or invoice options, which tend to cost more. In a B2B environment, giving people choice on how they want to pay for goods online can have a significant impact in increasing conversion rates. We are seeing a move towards ‘tokenisation’ (using pre-purchased credits) which will speed up the process by providing users with a single click payment.”
4. Working with IT
To a great extent all of these technical issues can be resolved if the marketer is able to establish the right relationship with the IT department. The rise of ecommerce has certainly pushed marketers closer to their IT colleagues, but striking the right balance is difficult. B2B ecommerce is not an area of business that can be managed by IT – it must be set-up, maintained and managed by marketing – but marketers must be able to communicate their vision to IT and work with them to bring that strategy to fruition.
5. Quality customer service
It is not only with IT that marketers must work closely. Ecommerce removes the personal element from transactions with customers, and so it becomes even more essential that the supporting customer service is perfect. As Black puts it, “Business customers expect instant responses and round-the-clock customer service. Consumers may be prepared to wait until the morning for a response to their enquiries, but for business buyers if what they’ve bought is business critical then the fact they’re experiencing problems at 2am is irrelevant – they expect service.”
6. Integrating with other sales channels.
In most cases ecommerce is an addition to existing sales channels, not a replacement for them. So, they must integrate seamlessly with them. Etienne Viellard, marketing director at Neolane, says, “The big challenge is co-existence with other sales channels such as call centres, partners, and face-to-face. To some extent this is about identifying which of your products and services should be sold online and which through those traditional channels. Products that are less consultative and lower value are good candidates for the online channel. You then need to educate and incentivise your staff so they direct customers to the most suitable channel.”
7. Differentiate pricing
In the past your salespeople had a good idea of how valuable each lead was. They could do their desk research, they could size up reception, and they could check the quality of biscuits in the meeting. This allowed the good salespeople to pitch their sell at the right level. With online sales it is much more difficult to do that, and that makes the display of pricing online very difficult. As a result, many B2B ecommerce sites can appear very cagey about price.
Frank Lord, regional VP of EMEA at online commerce software provider, ATG, believes that B2B marketers can resolve this problem by using data to personalise their ecommerce sites.
He explains, “We recently worked with Deli XL, a large food distributor in Holland and the owner of 3663 in the UK. Some of their customers buy food as a commodity, while others look for value, so Deli XL created two different online routes for visitors to their sites.”
He continues, “It’s quite easy to do this if you use a platform that holds data on visitors and so can distinguish between high and low value customers. In many cases, this is data the customer has already given you in previous orders. If they are new to your site then you can still profile using clickstream data. Essentially this is allowing B2B marketers to act like retailers, tailoring their offers to whoever walks into their shop.”
8. Apps and social media
Indeed, many believe that increased personalisation will be the most important development in B2B ecommerce over the next year or two. Others point to mobile apps as the ecommerce development to watch. Phil Gault, client services director at mobile marketing agency Sponge, says, “B2B apps are all about saving people time. If you’re selling goods and materials to builders or tradesmen, they’re going to value a service that allows them to check stock availability and reserve it for collection.” He adds, “If you can help your customers improve productivity, they’ll pay you for it.”
An example of this is brick manufacturer Ibstock, which has just launched a brick app that allows its customers to order samples, view technical specs, and find the nearest stockist from their mobile phones. Andrew Halstead-Smith, marketing manager at Ibstock, says, “Through this app our customers will be able to quickly and easily order brick samples, and [view] thumbnail and full-size quality images and full technical specs for more than 450 Ibstock bricks. This online tool will save builders time, allowing them to stay on site for longer.”
Then, of course, there is the impact of social media to consider. Richard Jones, CEO of EngageSciences, says, “The social web is a firehose of opinion on every B2B product or service from people just like yourself – the most credible witness of all. Harnessing these comments, blog posts, tweets, Facebook wall posts, Flickr and YouTube posts, then selectively using the best bits to drive ecommerce, is an incredibly powerful technique and is the future of B2B ecommerce.”
There is much to consider, and a lot that can go wrong with B2B ecommerce, but it is no longer an area that can be ignored.
To give one final example of how seriously many B2B marketers are taking it, Screwfix is about to replace all its in-store POS units with ecommerce terminals. And with the abolition of the cheque scheduled for 2018, more and more buyers are going to expect to buy online. There seems little doubt that ecommerce is about to become an even more significant part of the life of the
B2B marketer.
