Differences between B2B and B2C eCommerce

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:

Infrastructure

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.

Purchase Process

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.

Payments     

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.

————————————————————————————————————————————————————————————————————————————

Since my conversation with our Director revolved around the telcos, I did some research and on what is driving eCommerce for this industry.

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:

1. 83% of telecommunications companies said change was driven by customer demand and expectations
2. Developing technologies and permitting what was impossible before (76%)
3. Business buyers engaging through various offline and online touch points with their peers (71%)
4. Using multiple information sources to make decisions (71%).
5. The use of mobile devices (70%)
6. Competitor activity and performance (68%)
7. Corporate revenue/market share growth initiatives (63%)
8. Web 2.0 technologies enabling new ways of collaboration and relationship building in the B2B environment (63%)
9. 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 organisations understood the importance of intuitive search and nagivation, 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 centre. Over two thirds (68%) would like to create and manage B2B accounts, cost centres and budgets, and 68% would like to be able to allow account managers to negotiate quotes.

Mobile: Of those telecommunications organisations that say mobile commerce will be important in the next 12 months, a total of 58% are planning to create a mobile-optimised 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.

Web Commerce (B2B) had better be as robust and B2C or you are loosing business

Customer Trend and the value of the B2B Commerce customer experience……

B2B commerce platforms have existed for several years now and most companies believe they are productive, for their intended purpose.  However, industry analyst(s) and vendors alike in talking to customers see a forthcoming trend as reality today.   That is that B2B e-Commerce is not competing well against a better and more robustly established B2C Commerce offering superior experience and functional standards.   Some basic facts to consider:

1. Fact:  Customers are customers (B2B or B2C makes no difference).
2. Globally B2B sales comprise nearly 50% of commerce.   (More than B2C!)

Now a few simple questions:

Is your B2B platform receiving as much spend and attention to the customer as your B2C?

Does your focus on growing sales have a robust vision for B2B?

Customer trend and value of the B2B Customer Experience

Now let’s think of this user or “customer” experience scenario.   They “the customer” has one window open to your B2B website, and then another window their favorite experience B2C site.  This site is almost always more visual, easier to navigate, more familiar to the individual thus my intentional use of the term “favorite”.   Maybe it provides reviews, better content, and easier navigation to find what they need.   Now answer this because your B2B agreements provides a possible savings of a few percentage points do you feel this alone will drive buying habits of all the individuals within your business “customer” base into transactions for your business?   My answer for many marketing and IT leader is simply B2B sites and platforms need to borrow the best practices, and functionality from the B2C world.   In the words of Walt Disney, “Do what you do so well that they want to see it again and bring their friends”.  Yes this applies to your commerce platform and there are dozens of studies which verify this.   One study’s survey identified a 380 Million sales improvement over a couple years.  This US Company in the fast food industry only identified a single major growth sector, and that being in their B2B business segments, and that their only major innovation was their B2B platform redesign and new functionality.   This Company also acknowledged they grew market share even though the number of marketplace competitor companies increased.   Other studies have also shown where the customer experience is similar to best practices in B2C platforms those companies with that advantage saw a nearly 20%  lead in customer loyalty ratings, higher reach via referral, and consistently overall improved commerce site worth, with some companies seeing 100’s of millions in increases.

Q: What to do?     A:  Evolve your B2B Commerce Platform…..

Which B2C playbook pages are most important in the B2B Commerce world?  This answer has a bit of a crystal ball aspect in terms of answer.  There are basic(s) to improve, but as B2C experiences continue to advance thus the competitive threat continues to evolve.   But, the starting points are generically, personalization , interactivity, advanced search, rich media, advanced security, self-service, additional functionality, and Integration to other B2B data sources or applications can make an incredible difference for B2B customers.   The challenge is does your underlying platform support such functionality.   All-to-often B2B platforms were done on the speed to deploy, low end of functional platforms, or were possibly custom built and silo’d systems.   It’s amazing when several companies look at this cost expenditure verses their B2C platform and then compare their percentages of revenue.   Yes an effective B2C platform can improve sales by 10 or 20% but when B2C represents less than half of most companies’ revenue; what do you think a stellar B2B commerce solution will drive to impact sales?   Forrester identifies that most B2B companies project that eCommerce will soon comprise better than 50% of total sales with better than half of those sales in B2B.

Here are a few real principals to remember

•  While B2B commerce is trying to catch up with B2C, those platforms continue to evolve.  The Customer (BorC) will have an expectation at this new level.
• Mobile or mCommerce is for all Customers B2B Customers will use effective mCommerce platforms.
• Advanced Analytic s benefit both B2B and B2C buying.
• E-Marketplaces are functional for all customers.
• B2B eCommerce will be the largest sales channel for most companies.
• This is a digital internet method of doing transactions and your experience for the customer regardless of their device needs to be as robust, and positive as they have buying a book or anything else for their own personal purposes.   I’ve seen an analyst claim that their surveys have identified that in a 2012 survey B2B professionals had an 80% response to strongly agree or agree that customer expectations will follow B2C experiences.
•  B2B web pages that can be personalized and customized to a customer’s individual buyer are buying habits will have a bigger impact than B2C personalized pages.
• Intelligent decision tools that can make important recommendations trends will be expected.
• User generated ratings and review content especially from within the customers own company or perhaps some other industry reliable source dramatically changes the value of any reference or referra
• Interactive Product Catalogs
• Price/Product Comparisons
• Immediacy and Convenience are expectations
• Self Help Tools and Guides, Customer Self Service Content including support
• Robust integration to customer support, and parts/maintenance components as well as warrantee, customer rewards/loyalty, and other data elements the customer cares about.  Give then a 360 degree view on what they care about.

What component of Commerce is growing at an 86% growth rate?

MCommerce is growing at 86%, according to a report from the Baymard Institute that tested 18 sites including Amazon,  Walmart, Best Buy, 1-800-Flowers and more.

But, give your target market some consideration.  Consider that 37% of RueLaLa  business is coming from mobile, going up to 50% in the next year, and roughly 85% of traffic comes from iOS (Apple) traffic with less than 5% from Android.

Does that mean you should focus on iOS?

Consider that Android market share is at 59% and Q1 2013 accounted for 75% of mobile market share growth.

As you might imagine, statistics might lead you down the wrong path if you do not know the source platform of your customer.

Or, maybe you should ask the customer to jump on iOS given given the amount of revenue iOS users spend. The iOS market is delivering 3 times more revenue than Android.

Continued…..

Agile for Geographically Distributed Teams

Agile is really become a standard approach for most companies, yet few if any have great success when distributed teams are involved (which is also a standard for any mid size or larger company).   One of the core foundation techniques that Agile employs is that in software development project teams collaborate across all disciplines of experience.   This collaboration is particularly important when we consider the practice of iterative planning and development.   For distributed teams this calls to question the effectiveness of the communications used to support the team’s collaboration, and tracking.   Documentation is not the strength of many (noticed I did avoid saying “Any”) organizations.  Additionally most Agile training and best practices include the use of things like “Scrum” meetings, often better facilitated in co-located facilities, and daily stand-up meetings, which all support the continuous integration of team efforts which place geographically distributed teams at a disadvantage.

So how can an organization that has realized the potential of collaborative, agile techniques maintain those benefits when the team becomes distributed?

 

In part this answer is done within the structure of the Agile approach itself.   In that the work for Software development projects are structured, and collaborative, with some use of tools to support collaboration, documentation, which may need to be an added specialization as part of the team, and development of collaborative culture across the distributed team as a primary goal.  This collaborative team culture, team consistency, and management of shared work products become focus areas.

How to foster a collaborative team culture?

This can be partially answered by some of the pointers I’ve done in a previous blog on my personal site in managing a distributed project team.  But in summary the culture needs to maintain parity for team member locally to the management of the team.    This means if there is a team event like out for a dinner, or recognition of members that these extra motivational events always include the remote / distributed team members.   additionally consider the use of tools to aid communications, things like a collaboration site, video conferencing, IM, all improve communication.   Make sure project documentation and communication plans are detailed beyone the typical project expectation.  Things like holiday schedule for (remote site’s need to include multi national and cultural holidays)   additionally things phone numbers which include instruction for making international phone calls should also be included.    I have an additional whitepaper on this subject directly and can be reached at 219.629.0662 should you need assistance locating this.

 

Maintaining consistency on approach and deliver with a collaborative team and culture of highly effective communications is the next challenge.   The value of the “Individual” and interactions of Individuals over the processes and tools is very important for Agile teams.   Defining processes, and frameworks, along with training and review’s which identify and teach greatly enable individuals and interactions for distributed teams.   RUP provides a process framework of software development, a basic standard notation with UML, and an approach to communicating the process practices to all team members.   Training along with review and demonstration based on the reviews in a positive re enforcement manner is always highly desired for this.    The use of assigned mentors is also another positive mechanism I’ve seen be extremely effective here.

 

But, how to Manage the development of shared work products?  Although a defined process with a common language and approach can assist determining the activities of a distributed team the volume and complexity of work to be performed can still be overwhelming.   This is complicated by the fact it’s almost impossible to have real-time collaboration on deliverable shared across the distributed team.  Focus efforts that ensure all outputs from any team member are accessible by any other team member at any given point in time.  One of the simplest methods of doing this is a simple repository of the central common files, documents, guides, plans, and code.  With simple governance structure on identification on when, who, what, for each item.   Just be sure to accommodate the budget need to publish, govern and track items in the repository for the project team.   This simple miss in terms of estimation will begin to result in people short cutting the process which is critical to the overall team effectiveness.

 

 

Searching Unstructured Data Reveals the Unknown but Critical Data

With unstructured data, knowing what questions to ask is often difficult, but with the help of structured data (the relational data), one may develop a better process.

Unstructured data, sometimes categorized into a subcategory of ‘Big Data’ is comprised of word files, email, social media, video, audio, HTML, XML, PDF, Excel, image files and more.
While unstructured data has great value, the real value of unstructured data is found when it is combined with the core structured data.

For example, the realization that customer sentiment is negative is even more valuable when combined with the recent sales transactions and customer information to understand how that sentiment has affected the demographics of the audience or the mix of products and services that was purchased.

A disjointed approach leads to a multi-stage process to handle and/or analyze data, making it virtually impossible to include rapidly changing data in an analysis.

Drive Mobile Revenue by 16+% with Improved Loyalty

User experience drives loyalty and revenue. Read Gordon’s blog.

Motorola Solutions saves an estimated $100,000 weekly with Sterlite.

Read the Sterlite Motorola Business Impact study to find out more.

SterliteUSA

Our solutions are designed to effectively manage the evolution of your enterprise. It starts with the people – without willing participants and stakeholders involved in the planning process of the direction of your organization, the probability of success for most projects will be limited. Additionally, a solution must be well planned and articulated by the stakeholders and managers to the operations team, to ensure there is no room for misunderstanding. Lastly, our solutions may leverage existing tools or technologies to create a repeatable and measurable processes as well as maximized efficiencies.

Our solutions do not come in One Size Fits All category, because of the tremendous number of unique factors relevant to your organization. Some of the unique factors that may influence the outcome of your initiative will include; personnel, geography, management, users, budgets, technology preferences, timing, and scope of the initiative.

So, do we have the right solutions for your business?

It depends – view some of our other pages or contact us to discuss your initiatives.

Solution Summary
People
Plan
Process
Communication
Technology