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B2B Digital Commerce: Planning for 6 Complexities
Jun 01, 2022 • 7 Minute Read • Bill Cronin, Technical Director
As the "new normal" takes shape, many B2B companies are starting to rethink their go-to-market strategies. Chances are, if you haven’t been through a digital transformation or technology modernization recently, you’re probably due. A B2C-like experience is what’s expected by most B2B buyers today, however, the B2B commerce world has complexities the B2C world doesn’t. B2B buyers’ needs differ in many ways, and handling those needs on both the front end and back end requires meticulous planning, user experience expertise, and the right integrations.
What are Those B2B Complexities?
There are six complexities that B2B digital commerce projects often must account for, particularly if you’re a manufacturer or distributor:
- Customer Self-Service
- B2B Buyer Set-Up
- Shipping Costs
- Catalog Sales Restrictions
Taking these complexities and turning them into opportunities can result in considerable competitive advantages that result in revenue growth as well as operational efficiency gains.
To continue scaling up and maximizing customer experience, B2B companies need a web presence that allows customers to self-service for the simple things and more. For example, customers should be able to find the answers to common questions, like...Who is my sales rep? What is my current balance? Why can't this product be shipped to my state? Where is this product in stock near me? A robust web presence integrated with an Enterprise Resource Planning (ERP) system can help you provide this basic information, leaving customer service and sales reps to focus on providing higher-value services that translate to more revenue, or be repurposed as chat agents who can help several customers in parallel.
Additional enterprise architectural components can make the experience even better for you and your customers. A Customer Relationship Management (CRM) system like Salesforce can help organizations nurture leads and create workflow-driven web customer interactions – a step up from form data that gets emailed to a shared inbox. PIM (Product Information Management) software can be used to curate product information and keep it consistent across different data destinations like the website, the ERP, and marketplaces. A step up from that is MDM – Master Data Management. This brings customers, locations, and employees – all corporate data entities – into the fold.
B2B Buyer Set-Up
In B2C commerce, a user and a customer are typically the same things. Either anonymous shoppers (guests) or users who sign up for an account have a single customer account. They may have an address book for shipping to multiple destinations, but the "shopper" is shopping on behalf of a single entity – themselves – and they (or a gift recipient) are the end user of the product. With B2B commerce, while there may be guest shoppers, the primary use case is registered users who are operating on behalf of businesses. Those businesses may have more than one billing entity that the user is shopping for. Or there may be more than one user shopping for that business. Like a B2C commerce user, there could be multiple shipping addresses to choose from for that billing entity. When creating a user in B2C commerce, because you typically sell to anyone, you can create the user and the customer at the same time. B2B commerce is different because creating new users and customers typically entails a vetting process involving checking for an existing customer for the request, credit checks, business license checks, preferred freight carriers, etc. With larger organizations, the user requesting a new account may not realize that their organization already has a relationship with the business. Getting this wrong can result in duplicated customers in the ERP, tax problems, or worse.
Pricing is another example of where B2B and B2C digital commerce differ. In B2C commerce, all customers usually pay the same price for the same product. The exceptions are often a single tier, such as member pricing driven by a loyalty program. Minimum Advertised Price (MAP) rules can present a wrinkle, but it's usually a consistent wrinkle for all shoppers. In B2B, things are usually less consistent. Often, individual customers have negotiated contract pricing. We’ve seen cases where the seller could not guarantee that the price of a product would not be different for every customer. With a large number of customers and a large number of products, this can result in a huge number of customer/price combinations. It could be that there are too many customer/price records to load on a regular basis, particularly if pricing is subject to frequent changes. In cases like this, API-driven pricing for the website from the ERP becomes a necessary workaround. Fortunately, with the increased prevalence of cloud-based, API-friendly, always-on ERPs, this is an increasingly viable and performant solution.
Some B2B sellers need to use a real-time pricing API because they have extensive customer-specific contract pricing that changes throughout the day. They would like to have an option to sort search results by price. This would, however, be quite difficult unless the ERP could push pricing changes in real-time to the website. Data that is necessary to manipulate the entire list (counts, sorting, paging, etc.) must be available at indexing time. It would not be performant to gather, say, 2500 search results – call the pricing API for all of them (slow) - sort the results by price – then take the right products to show on page 76 of 100 at 10 per page. This is another area where proper architecting of the system is critical to ensuring the performance you need from your site.
Inventory is an example of where the evolution of B2C commerce is driving expectations of B2B commerce. In both paradigms, accurate inventory positions are essential to the end user. When shopping as a business, understanding the availability of a product is every bit as important as it is for B2C shoppers - perhaps more so. For example, the ability to complete a job is often based on the ability to obtain the raw materials necessary to do the job. Think about an HVAC business ordering parts for a compressor repair – they can't complete the job until they have the parts. Here again, API-friendly ERP systems are a great way to make this possible, especially in environments where inventory velocity is high and there are multiple channels competing for the same stock.
Most B2B customers would like to see shipping costs for an order in advance of actually placing the order. Full price transparency in the digital shopping cart is helpful in building trust and securing the sale. We see this requested all the time, and it's a logical request. However, there are many obstacles to this in B2B as the paradigms are different. For example, it's common to use nonstandard LDL carriers that don't have a rating service API, or to bill to the customer's carrier account. Most often the impediment to this is the product data itself. This is not specific to B2B commerce but is more prevalent there as B2C commerce usually deals with Packaged Units compared with B2B commerce, where raw materials are more the norm. While there may be weights, they are often inaccurate, and there are quite often no dimensions. This is very important for common carrier shipping calculations. Consider the implications of shipping 25 pounds of steel ball bearings vs. shipping 25 pounds of packing peanuts. One is a package the size of a large shoe box, and the other would not fit in a small car. The costs to ship these are very different. Integration with a shipping platform might be the solution, or custom-built back-end calculations that occur based on a set of defined business rules.
Catalog Sales Restrictions
In B2B, it’s often the case that certain products can only be made available to certain buyers, especially when selling internationally. Take for example a company that sells multiple brands of tools. Only some of its customers are authorized distributors of those tools. Those customers can see and purchase unbranded, commodity materials as well as those brands and product lines that they are authorized to distribute. This is a use case that doesn't come up often in B2C commerce since the model is generally unrestricted sales to anyone. In B2B commerce, however, this is a typical scenario.
Begin With the End in Mind: Business Objectives First, Technology Solutions Second
Technology needs to be put in place to support positive business outcomes. And while many of the latest and greatest technologies can certainly contribute to a great user experience, organizations won't realize the return on their investments in them unless it's clear how they will support the business. Therefore, the most important thing for your B2B agency partner to understand first is your business, then B2B commerce specifically, and finally commerce in general. Who are your customers? What are your markets? What are the operational pain points you currently have, and how will your B2B commerce website make them less painful? Also, do you have the data to enable the experience you want to bring to your customers?
These B2B examples we’ve shared are a small subset of the scenarios we face every day with our B2B clients. Understanding the ins and outs of B2B commerce, and what makes your business special, is the key to the successful implementation of a digital platform. B2B commerce is more complex than B2C commerce, particularly around user/customer relationships and pricing. The downstream implications of the architectural decisions that support them can be challenging, and expectations around "just making it work like Amazon" need to align.
At Verndale, we understand the unique challenges of B2B commerce because we've been through the journey with many businesses, including several we've been stakeholders in ourselves. We have the experience to bring your organization successful technical outcomes, as well as successful business outcomes. If you would like to hear more, contact us today.