E-commerce has hit the business-to-business world by storm. Most B2B businesses today, regardless of industry, are in the early stages of digital commerce or plan to invest in it in the near future. On average, global B2B enterprises drive about 35% of their sales from e-commerce, but many of these companies hope to see that number increase to more than 50%, according to a report by Forrester Consulting, a unit of Forrester Research Inc.
A digital revolution is much needed within the B2B space. Today’s business buyers want to conduct research, compare prices and make purchases online. In fact, 68% of B2B buyers prefer to conduct initial research online on their own, according to Forrester Research’s 2017 Death of a Salesman study—up from 53% in 2015.
Unfortunately, many B2B businesses assume this digital shift should mirror business-to-consumer e-commerce exactly. The flaw in this thinking is that B2B products often require multiple configurations and customized price quotes, making the entire purchase journey, from discovery to conversion, much more complex than a typical transaction on Amazon.com.
Thus, the strategies and technologies that B2B companies use to support e-commerce can’t be the same as what’s common for B2C retailers. B2B businesses need enterprise-wide solutions that streamline a complex buying journey.
The B2B e-commerce evolution
In the early days of B2B e-commerce, customer interactions were mostly transactional. Sellers digitized their catalogs to let buyers browse and buy high-volume, low-margin products online (think: office supplies). With products like these, it was easy to replicate the B2C paradigm.
W.W. Grainger Inc. was one of the first companies to pull off this Amazon-like experience. In the ‘90s, the company simply created an online store for basic products like safety glasses with a checkout process that involved a purchase order number instead of a credit card. At the time, this was the gold standard of B2B digitization.
But then B2B hit a wall. Grainger, like many others, had really only digitized a catalog of easy-to-buy, replenishment products. While this approach worked well in B2C, it failed to consider the complexity of the B2B buying journey.
Just imagine a fleet owner looking to order several commercial trucks. The fleet owner may have different modifications for each truck in that fleet, which requires a multitude of different price quotes and configurations. On top of that, IT and mechanical engineering departments must make sure that each part and configuration works together, sometimes incorporating thousands of unique business rules.
In other words, digitizing a product catalog just isn’t enough for B2B buyers. The industry is ripe for innovation, and businesses that enhance their digital offerings will gain a competitive edge.
An outside-in approach
When trying to facilitate a new era of B2B e-commerce, businesses often digitize siloed aspects of their businesses to solve specific functional problems. The flaw in doing so is that it doesn’t account for growing expectations around more intuitive customer journeys.
Businesses that want to digitize direct sales often start with a quote-to-cash tool built inside a CRM system. This might bring value to the business in automating a manual process, but it doesn’t serve the customer all that well. The customer still has to complete manual steps, such as calling the seller and waiting days or weeks for personalized quotes.
But by taking an outside-in approach—which means emphasizing the customer perspective in new technologies—businesses can create the buying experiences that B2B customers crave. To get there, businesses need to shift their way of thinking. That means taking digital conversations out of I.T. and opening up a more strategic, company-wide discussion.
Cue enterprise CPQ
Businesses also must expand their definition of e-commerce beyond B2C-like paradigms. They should ask for more than a quote-to-cash tool for direct sellers inside a CRM application. They should demand an enterprise-wide solution that streamlines the buyer experience.
That’s where enterprise configure-price-quote software comes into play. Effective CPQ solutions deliver accurate order configurations, offer real-time price optimization, enable guided buying and selling and, above all, enhance the end user’s experience. Smart sellers know that an engaging buyer experience offers a leg up over the competition.
In manual configurations and quoting processes, the workflow is lengthy and convoluted, and that’s even before introducing human error. However, with the right CPQ tool, salespeople can close deals faster and without that error. Because the buyer experience is so frictionless, from discovery to quote, the salesperson is able to offer more strategic advice along the way, and work with each buyer to co-create the solution that delivers the best outcome—instead of wasting time configuring products and prices manually.
That’s ultimately what B2B e-commerce systems should be designed to do. And this new standard is already taking shape. For companies to stay competitive in today’s market, they need to adopt new technologies and practices. Commerce is evolving from B2C-style parts catalogs toward consultative co-creation of complex solutions, and this is part of the evolution of how B2B buyers and sellers interact and engage with one other. If leading businesses start to deliver this upgraded experience, the new era of B2B e-commerce will be here.
Mark Bartlett is chief experience officer of FPX, a provider of CPQ technology and related products and services. Prior to FPX, he guided customer experience and commerce practices for such digital agencies as IconNicholson (Digitas LBi), Sapient and Razorfish. (Sapient and Razorfish have since merged into SapientRazorfish.)