Too many B2B organizations still hold fast to the idea that they can bring a knife to a gunfight. Everyone knows what Amazon is, and many have heard of AliBaba, but they fail to make the connection between what these B2C organizations do. They also overlook the fact that B2B customers are demanding similar features and functions when they make business purchases as they enjoy when they make consumer purchases from home.
Many B2B companies are not sufficiently forward thinking.They are missing the major opportunity of our times and consequently they continue business-as-usual, making slow, lurching strides across a shifting landscape. They tend to build their whole stack on one business line, evolving it slowly and organically over time. Catalogs are a great example of this lack of foresight in action.
Traditional B2B companies remain comfortable in their silos, deaf to the message that they must transform.
A catalog is no longer just a listing of products and prices. A loyal customer of Company A will still turn to the catalog of Companies B and C when doing price comparisons and research, but they may do so now from their smartphone. This presents a huge opportunity for Company B to win this customer over, once they envision the catalog as a strategic tool and not merely a price list.
This customer brings data, preferences and analytics to the table. A smartphone-optimized catalog becomes a marketing tool, a data collector, and an experience driver, if designed and built accordingly. A catalog is not just a catalog in the omni-channel world.
A 2015 Forrester report highlights three prime influences that have forced a change in behavior among B2B buyers:
- First is the Amazon-style B2C experience, with its “real-time interaction, extensive price/inventory transparency, and robust guided selling.”
- Second, there is internal and external channel conflict. “Many distributors are now becoming de facto manufacturers by selling via private label, and many manufacturers are becoming de facto distributors by selling direct to customers. This reordering of the players in many industries has caused channel complexity regarding pricing and assortments that many B2B companies are ill prepared to handle.”
- Third, the marketplace is becoming far more crowded, with startups and pop-ups competing against established businesses, and a greater degree of expansion of existing suppliers, such as Staples, into niche markets such as medical devices.
The B2B Industry is transforming from a product-based transaction to one based on recurring revenue with subscription. It is an industry moving towards services and business outcomes. This brings a range of new concepts into play. For example:
- Disruptive monetization challenges traditional approaches to commerce, making brands available on any touchpoint, on any channel, on any device at any moment. This happens when a copier company stops selling copiers and instead sells a printing and copying subscription service. The copier company is selling the business outcome called document management.
- Contextual service uses data to customize the experience to every individual buyer, capitalizing on input from a variety of sources to shape a transaction that is unique and relevant, and in which “value” plays a greater role from the start.
- Innovation beats inertia: Greater opportunity lies in observing the broad range of new activities within an economy, and analyzing them to granular detail to uncover new value creation opportunities. The cost of innovation is decreasing, and the cycle time between initial design and customer purchase is far shorter, which allows businesses to become more nimble and agile. Innovation is not a single project, but a new way of doing business.
- Consistency beats singularity: Customers expect consistency of experience. This means placing editorial and catalog content, commerce capabilities, and real-time offers on all channels – web properties, customer service, in-store capabilities, wearables, smartphones, and smart TVs.
- Commerce becomes frictionless. This means the transaction becomes as easy as possible. Studies have shown that every additional step require for checkout reduces online sales revenue by 30%. For omni-channel commerce, this means enabling a customer to transact between channels, such as relocating a movie from a PC screen to a phone screen. Frictionless can also exist between products, allowing a customer to upgrade easily from a freemium to a paid service, or from a basic add-on service to an upsold premium service.
B2B companies must evolve and start thinking like B2C.
Just because a company currently has customers is not enough to guarantee its future. It is crucial to identify the right people, market to them, and explore ways to expand the relationship. Then there’s the usage data: how the customer uses the products, what their budgets are, who the decision-makers are. The data is the real treasure.