Part 3: Complexity Management
This is multi-part series on the 3 biggest pains each B2B organization needs to overcome and the levers they can pull to be successful selling online. You can download the corresponding e-book here.
Disruption is Upon Us
The B2B market place is ripe for innovation. Now more than ever B2B sellers capabilities are misaligned with B2B buyers expectations. If, according to Frost and Sullivan, the online B2B market actually reaches $6.7 trillion dollars by 2020 then B2B sellers can expect both more opportunity to differentiate themselves and more competition. The companies who can pull these 9 levers most effectively will position themselves to capture more market share and succeed financially.
The 3 Biggest B2B Pains
If you evaluate all the different obstacles that face B2B organizations today they generally fall into the following 3 categories:
These issues can exist across channels but for the sake of this blog and in response to the online market opportunities we are going to focus on how these can be address via e-commerce. To visualize this we have created this wheel. The wheel shows the 3 main challenges facing online B2B sellers and the 3 levers that can be pulled to address each.
Of all the issues facing B2B companies today, the easiest one to grasp from a business point of view is poor revenue growth. It's easiest to grasp because the levers to effect change in this area have been fixed for quite some time. If you want to grow online revenue you have to get more people to your site, increase the percentage of people that buy from you, or increase how much each buyer spends with you.
While identifying which levers exist to address revenue related issues is easy, pulling those levers has proven difficult for many B2B companies.
B2B E-Commerce Site Traffic
The overwhelming majority of B2B sites I see still have a very difficult time getting found organically for what they want to be found for. Part of this is because B2B product data can be unruly but some of it is because B2B sellers have only put forth a half hearted effort to execute the blocking and tackling of search engine optimization (SEO). It makes a lot of sense to have an online presence today since more than 90% of B2B buying research is done online. The key to success in this area is two fold. First, a company must get found for the products or services the buyer is researching. Second, the seller has to provide valuable information regarding those products and services. This can be accomplished with a variety of tools like URL beautification, well organized site maps, descriptive product data, and regular indexing of your site pages. The ultimate goal here is to ensure that you are communicating relevant and valuable information about your products in a way that ensures a search engine will rank you highly for. The details of each of these could be a blog post on their own but we won't dive into them any further now.
What happens when you fix your site traffic issue? What happens when customers actually start showing up at your site? Will they be able to find what they are looking for? Justin King from the B2B & E-Commerce Blog has a great post on the importance of on-site search. 60% of those buyers, according to Accenture, say on-site search is one of the most important features a site can offer while only 48% of other B2B sellers say it is a top technology priority. I see both a disconnect and an opportunity here. If a potential buyer visits your site and doesn't receive the proper search results, you have just blown a great opportunity. Very few other actions communicate intent as well as a search for a product on your site. The customer is literally saying "tell me about this product." Create a compelling experience that converts by getting buyers to right products as quickly as possible. To accomplish this you need not only good product data but robust technical capabilities like fuzzy search (synonyms, homonyms, misspelling), faceted navigation, advanced product recommendations and some search based merchandising features.
Average Order Value
I've mentioned growing revenue several times. I suppose its important to point out the while revenue is the metric e-commerce professionals care most about, profit is the real measure of businesses health. I am working under the assumption that all expenses are constant. If this assumption is true, revenue growth should be indicative of overall profit.
Lets revisit our initial equation: Revenue = Traffic x ConversionRate x AoV
Pulling any of the levers on right side of this equation will positively impact revenues but increasing average order value might be the most difficult. The end game is to convince someone who has already found what they want to either buy some other item or buy a more expensive alternative to what they originally intended. The selective usage of up-sells, cross sells and relevant product information can go a long way to accomplishing this goal.
A few weeks ago we posted a blog, 9 Ways To Increase You E-Commerce Site Revenues. In this post, the first tip addressed when to use cross sells verses up-sells. Lets use a B2B example. Imagine a potential buyer visits your site and searches generically for "pipe coupler." Because he used very generic and high level terms he is probably either doing category level research or has non-specific needs. In this case you may want to ensure this users gets to a dedicated landing page with plenty of educational material and rich content to up-sell him to buy the best possible coupler that meets his needs.
Let's assume a different shopper searches for "Latrobe Foundry 2in Coupler". This buyer obviously know what they want but in terms of brand and product specifics. It doesn't make sense to cross-sell them. If this person is willing to buy this product then let them buy it. In this case you should cross-sell accessories to go along with his "2 inch coupler" like "pipe cement" or "plumbers tape." The principle here is up-sell buyers who browse categories and cross-sell buyers who focus on specific products.
This is just an example of how selectively using basic merchandising capabilities can effect top line growth. More advanced strategies rely upon you ability to present targeted content based on either existing knowledge of customer or their demonstrated online buying behavior. Either way, relevance is the key.
Get in the Game
There is no reason a B2B seller with and online presence can't begin to effect their revenue growth. If you are interested in learning more about how Oracle addresses each of these issues, keep coming back for the rest of this series or go check out our home page: https://www.oracle.com/applications/customer-experience/commerce/index.html or