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Business-to-business customers are people too.
An obvious truism? Perhaps, but you wouldn’t know it from the digital customer experience in B2B markets. Few business websites deliver the efficient, insightful, and personalized service widely available on consumer websites.
Business-to-business vendors seem unaware that corporate purchasing decisions are made by human beings, who spend plenty of time on Amazon, Expedia, and other consumer e-commerce sites. Inevitably, these experiences shape their expectations for online transactions at work. Corporate buyers accustomed to easy, quick, and customized online transactions from sites targeting consumers now demand the same or better customer experience in digital business transactions.
For most B2B companies, meeting these customer expectations for consumer-level experiences will be difficult. Few business websites offer features that simplify transactions, create deep customer relationships, and drive sales growth. To succeed, they need to personalize and customize their online selling process through high-performance technology and customer-centered business models.
As customer expectations evolve and technological advances create new possibilities, the foundations of an efficient, responsive, personalized customer experience in B2B transactions must take shape. Like their counterparts in the consumer market, B2B companies will need to shift to a human-centered design model and make effective use of artificial intelligence, analytics, algorithms, and other tools to discern customer needs and predict buying behavior.
Three Driving Forces in B2B Markets
E-commerce continues to grow as a meaningful share of B2B revenues. Forrester reports that “nearly 15% of U.S. B2B sales are expected to be via digital channels by 2021, a 15% increase in just five years.”
Digital selling platforms are replacing traditional in-person and phone-based selling, and these platforms are more able to capitalize on omnichannel strategies to capture a greater share of sales. In order to capitalize on opportunities offered by meeting B2B customer expectations, companies need to understand three fundamental drivers of sales and customer experience trends in B2B markets.
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Consumerization of customer expectations. Widespread digital technology adoption and automation of many commercial interactions has affected the way businesses purchase products and services. Increasingly, they think and act like consumers — accustomed to fast, seamless online transactions, fulfillment, and account servicing tailored to their unique specifications. Yet according to Salesforce, less than 30% of B2B customers say suppliers provide excellent customer experience.
Another dimension of this reflects the rising generations in the workforce: As millennials ascend through the business ranks, they bring their digitized worldview to the workplace, where 61% of B2B transactions now start online, as reported by Salesforce. More than 80% of business purchasers surveyed by Salesforce want consumer-level customer experience, and two-thirds have switched vendors to get it.
Improving customer experience through better technology and automation represents a huge opportunity for most B2B businesses. A.T. Kearney data confirms that when companies provide a personalized, seamless experience, they generate average revenue growth of 8.1%, twice the rate of competitors with less-developed digital platforms. In some industries, converting a single-channel customer into an omnichannel buyer increases the buyer’s average spend by 21%.
Distinct characteristics of B2B purchasing. Business customers expect a customer experience on par with consumer e-commerce, but they don’t always act like consumers. Fundamental differences exist in their purchasing behavior, transaction processes, and decision-making dynamics.
Consumers can be emotional and spontaneous, and they often impulsively click the “buy” button. Business buyers, in contrast, take a rational, dispassionate approach to purchasing, guided by objective criteria and cool-headed analysis of options. Consumers typically base decisions on vaguely defined factors: price, perceived quality, or a product’s attractiveness. Business buyers have complex, specific requirements for product characteristics: price and payment terms, service levels, legal and tax considerations, and logistical needs.
B2B relationships are also more complex than those with consumers. A single consumer usually makes purchasing decisions, while B2B purchases often require input and approvals from stakeholders throughout the company. Consumer transactions typically are one-off, but B2B commerce takes place in the context of ongoing relationships between buyer and seller, and long-cycle purchasing patterns.
Evolving analytics and algorithms. Big data analytics, coupled with algorithmic decision-making, reshape both sides of B2B interactions. More corporate buyers use these tools to optimize purchasing, while sellers use them to predict purchasing trends and personalize products and services. Analytics gather, enrich, and synthesize customer data, revealing patterns in customer buying behavior and illuminating sales and service opportunities.
Algorithms turn insights into action, triggering automatic responses to customer needs highlighted by analytics platforms. An effective combination of analytics and algorithms helps sellers develop and present timely, highly customized offers in frictionless, automated customer experiences.
Four Pillars of Superior Digital Customer Experience
While the ideal approach to digital customer engagement varies across industries and companies, most successful models are built on the following four pillars:
Pillar 1: Comprehensive, Personalized Customer Experiences
Personalized, automated customer interaction extends beyond the “purchase funnel” to all activities involved in meeting customer needs. Functions ranging from fulfillment to customer support and billing should be designed to provide the best experience for buyers.
Pillar 2: Segmented Customer Needs
Segmenting customers by needs and buying behavior allows companies to create custom-tailored experiences for each group.
Customer requirements vary by type of business, from small companies with unpredictable purchasing patterns to multinational corporations with analytical, technology-enabled buying processes, as well as others with complex, specialized purchasing needs. Requirements will also vary by product type.
Despite these differences, B2B customers typically fall into one of three persona groups, each with key features to identify for building personalized experiences.
- “One-click” customers: These include smaller accounts that tend to transact business like consumers, are costly to serve at scale, and often lack technological sophistication.
- Analytical customers: Refers to sophisticated large accounts that gather market intelligence to inform purchasing decisions. These customers require highly personalized service from suppliers.
- Solutions customers: Typically large accounts that require even higher levels of customization than analytical buyers, because they face an array of noncommercial challenges, such as extensive regulation, stringent security standards, and significant liability risks.
Pillar 3: Facilitated Customer Interactions
The best B2B customer journey requires advanced digital capabilities, in four key areas:
- Insight-enriched relationships: Companies need to know who their buyers are, their purpose for each purchase, and the key factors driving buying decisions. Deep customer insights guide interactions at every stage, including product design, engineering, and marketing.
- Frictionless interaction: Companies need to make it easy for customers to buy, and should do so by facilitating seamless buyer and seller transactions with digital technologies to automate or even eliminate cumbersome interactions and processes, from ordering and payment through fulfillment, replenishment, customer service, and back-office functions.
- Omnichannel integration: Sellers need to increase customer choice for their preferred transaction channel — phone, online, mobile, and even machine-to-machine while also ensuring a consistent experience and view of the customer across all channels.
- Platform business models: Businesses need to explore business models and open platforms that facilitate integration and collaboration across the value chain, through new data-driven products and services (such as predictive and proactive field-service models based on connected devices).
Pillar 4: Customer-Centered Operating Models
For many companies, moving toward a consumer-centered B2B model signals a radical cultural shift, requiring new ways of working — and thinking — across the organization. B2B companies that consistently deliver consumer-level online service understand how marketing, sales, product development, IT, and other functions shape customers’ experience. They break down traditional silos and form cross-functional teams charged with optimizing every interaction between customers and the company.
Empowered with resources and autonomy, these teams conceptualize, test, refine, and deploy innovations aimed at creating frictionless experiences for customers. They use agile methods, developing minimum viable products (MVPs) that deliver quick, tangible customer benefits with little up-front investment. To keep on track, teams work toward clearly defined targets, such as improving website functionality or enhancing online pricing options. By focusing on outcomes, they can monitor and adjust KPIs that measure progress toward their organizational goals — such as better customer acquisition, satisfaction, and retention.
An Untapped Opportunity, for Now
Despite corporate buyers’ increased demand for better online experience, the four pillars of digitally optimized customer engagement are still rarely found in B2B markets. Few business websites offer basic features that simplify transactions, deepen customer relationships, and drive sales. Most lack one-click ordering, online order tracking, and insightful, personalized product recommendations and promotions based on customer needs and purchasing tendencies.
More fundamentally, companies in B2B markets rarely take a comprehensive, cross-functional approach to customer service. Only a handful use digital technologies to develop a broader understanding of their customers’ business imperatives and objectives.
But B2B companies that have improved the digital buying experience reap big returns. One such company is a medical technology manufacturer that sells a complex array of prosthetics and other products to orthopedic supply retailers.
E-commerce accounted for only about 4% to 5% of sales, but this manufacturer wanted to reduce selling costs by conducting more business online. Customers, however, preferred placing orders with sales representatives or by telephone. They saw the company’s site as cumbersome and less efficient than these traditional channels, because they had to type in detailed patient information that was already entered in their own ERP systems.
The company designed an open API to eliminate the duplicate data entry on the side of the customer, which linked the e-commerce site with a customer’s ERP system. For customers, ordering online became easier than picking up the phone or buying from competitors. The company’s share of each customer’s spending increased by 5% to 10% per transaction. Order frequency and order quantities rose, and e-commerce now represents 20% of the company’s North American sales.
When digital technology enables new levels of customer insight and seamless service, it can transform customer relationships.
This process, time consuming and multipronged, starts with three key steps:
- Segment customers into one-click, analytical, or solutions categories.
- Identify points across the customer journey that cause friction for buyers, and eliminate these through digital tools and automation.
- Embed customer insights into every stage of the cycle, from marketing to product support.
Humanizing the Customer Experience Pays Off
Investing in customer relationships is a solid strategic choice in the current economy. Sales growth has flatlined in many B2B markets. But Forrester reports year-over-year B2B e-commerce growth of 7%, anticipating that such sales will surpass $1 trillion in 2019, and as much as $9 trillion, including other digital commerce channels. Companies that offer B2B customers a consumerized online experience can capitalize on that growth. Frictionless, personalized interactions stand out in intensely competitive markets, boosting sales, enhancing efficiency, and strengthening customer relationships. An enhanced digital customer experience also expands markets by offering self-service options, allowing companies to profitably serve low-volume, infrequent purchasers.
In the long view, superior customer experience capabilities transform the basic dynamics of B2B markets. By making it easier for buyers to communicate their needs and make purchases, digitization transforms the seller-driven “push” commerce model into a customer-initiated “pull” model and takes the guesswork out of operational functions, from product design to procurement and production planning. As technology draws buyers and sellers closer, they discover new opportunities to create value by working together.
B2B customers have watched these possibilities come to fruition in consumer markets. Now, these customers are primed for and seeking a similar transformation of the commercial experience. In the end, the reward will go to those suppliers who deliver the personalized, frictionless, human-centered digital service customers have come to expect.