Experience is Everything: How B2B Companies Are Competing with Marketplaces

Evolving forces are reshaping the B2B landscape, leaving many marketing teams to rethink the way they talk to their customers. Forrester Research predicts B2B e-commerce sales in the United States will top $1.1 trillion by 2020, giving B2B companies more than a trillion reasons to embrace the trend toward consumerization.

There’s just one problem — online behemoths like Amazon Business and Alibaba make intimidating competitors because they have set the standard for creating trustworthy online experiences backed by great functionality and responsive customer service. But B2B companies can differentiate themselves from third-party players by delivering optimal customer experiences. That means learning how to leverage direct-to-customer platforms without negatively affecting existing distribution partners.

By investing in state-of-the art digital asset and content management technology, as well as analytics, targeting, and optimization solutions, your company can set itself apart from large third-party marketplaces, while giving your customers a reason to keep coming back to you. Putting the digital technology capable of delivering next-level customer experiences in place is precisely what will determine the survival of the fittest in the rapidly evolving B2B ecosystem.

Diversifying your B2B strategy.

It’s easy to think of Amazon Business and Alibaba as competition, but there may be some value in considering the old adage, “if you can’t beat ‘em, join ‘em.”

Going toe-to-toe with big marketplaces through your own online channel is as direct as it gets, but you can turn this competition into an opportunity.

“There are different ways you can experiment with B2B marketplaces,” says Tristan Saw, senior director of strategy and consulting at SapientRazorfish, Adobe Digital Marketing Partner of the Year in 2015 and 2016. “The first [step] is to use a site with a broad customer base, like Amazon Business or Alibaba, to test product demand before selling directly to customers through your own site.”

A company’s infrastructure and sales goals should determine how much it leverages third-party partners. Companies already profiting from a direct-to-customer framework may want to augment their existing online marketplace. But companies new to e-commerce might be better served by placing new products on a third-party marketplace to test the market opportunity before investing in the development of a direct channel of their own.

Several key factors play into developing the best strategy, all of which are unique to your brand and marketing. That’s why every company can find value in experimenting with direct channels and third-party marketplaces to see which dynamic works best in the context of their own digital transformation.

The path to a custom-branded marketplace.
Every enterprise-level company should be developing a strategy for competing with third-party marketplaces. If your sights are set on one-upping the heavy hitters, the secret sauce is to create a customer experience your visitors won’t soon forget. That means developing an environment that is simple, intuitive, personalized, and flexible — where B2B buyers can easily navigate from product searches through the purchasing process, and beyond, to aftermarket sales and service.
It also means creating an environment that rivals the purchasing experiences B2B buyers are already familiar with as consumers on state-of-the art retail platforms. After all, every B2B buyer who visits your site, whether you like it or not, is going to be judging each aspect of the purchasing process by comparing it to their own B2C experiences.

“If you’re serious about selling directly online, you will need to deliver a customer experience that drives sales,” says Tristan. “In order to compete, you need to invest in becoming an experience-led business, which means optimizing every digital customer touch point.”

In fact, many B2B companies can benefit from embracing a “frenemy-type” relationship with third-party marketplaces by leveraging them for testing and analytics, and ideas for the customization of your own site.

Use third-party marketplaces to test and analyze. Taking on the big guys isn’t for the faint of heart, and even well-established brands have fallen victim to their overwhelming influence in the marketplace. But there’s no denying the power of big, centralized marketplaces, so go ahead and take advantage of their reach.

Using third-party infrastructure provides a relatively low-risk test bed. By taking advantage of an established marketplace like Amazon Business, you can place your products alongside others to evaluate market demand, determine whether you can meet the needs of your buyers, and shape your own infrastructure development strategy. Once you start analyzing KPIs, such as purchasing history, demographics, and conversions, you’ll have data to help formulate a strategy that defines the best direct-to-customer channels for your business.

Select the best platform given the market opportunity. Should testing and analytics prove there is real value in using large marketplaces to your advantage, you easily can increase your presence, or know how best to build your own e-commerce platform that will meet the specific needs and expectations of your customer base. On the other hand, if demand is low, you’ll know not to invest heavily in your own e-commerce platform — or at least not until you can iterate and optimize your offering and approach to attract the market you need. Finally, there are times you’ll want to take a dual approach and determine how to align your third-party sales strategy with a direct-to-customer approach on your own site.

Weigh the pros and cons of a B2B exchange.
The need to evolve into an organization that can utilize digital tools and techniques to compete with industry rivals may cause some B2B marketers to rush the process. This is a mistake. While each approach to setting your company apart from third-party marketplace giants has its advantages, there are also caveats that must be considered before implementing your strategy.

For starters, there are financial considerations. Developing your own infrastructure requires an investment in time, staffing, and financial resources. “By selling through Amazon, they’re bringing a marketplace to you,” says Tristan. “They’re giving you access to infrastructure — like payment gateways, warehousing, and delivery systems.”

While services such as fulfillment, drop shipping, and distribution may sound like an excellent bargain, they don’t come without a price. Amazon fees vary by contract, but Tristan estimates they’re about 20 percent. “You’re giving up considerable margin to be able to sell through their channel,” he says. “That’s one element of the risk.”

Another risk factor of a shared platform is losing your customers to your competitors. If you’re going to utilize a third-party site, you’re not going to be the only brand on the page offering the same or similar products. That’s why setting yourself apart from the rest of the pack is an absolute necessity. Odds are, any third-party marketplace is going to be flooded with your competitors lurking in sidebars, banner ads, and “customers also viewed” sections — only a click away from your offer. “This dynamic could lead to customers being lost to the lowest bidder,” says Tristan. “If I’m a buyer on Amazon Business, I can shop not only for your products, but your competitors’ products too.”
Competition isn’t the only worry that comes along with using third-party sites. The lack of control you have over customer feedback and reviews means trusting your brand’s reputation to someone else. It’s not uncommon for customer-oriented sites to get the praise for easy returns, while manufacturers get the negative review for selling a subpar product. “That’s the worst-case scenario because you just hinder your brand,” says Tristan. “While reviews provide transparency and social proof for buyers, they can also lead to poor brand perception from negative feedback. You shouldn’t shy away from this though, as it can also be a key input for improving your products.”

Embracing third-party infrastructure is also going to have an effect on other partners, owned portals, and sales teams. Special pricing is difficult through third-party marketplaces, and the lack of price consistency could lead to customer confusion and attrition in the long run. “If I’m a huge conglomerate that can afford to buy in bulk then most companies will offer me a volume-based discount,” says Tristan. “On Amazon, it is often unclear if you will get a discount, and sometimes you have to actively request it from a seller.”

Historically, prices on many third-party sites have varied considerably, but Amazon Business, in particular, is working to implement consistent pricing — another improvement that’s destined to place further pressure on smaller competitors in the near future. For example, Amazon is already experimenting with a pricing structure that eliminates the need to speak with a sales rep.

And this is only the beginning. Other steps to consider when adding another layer of complexity to your sales strategy include maintaining consistency across channels, managing customer relationships, and managing costs specific to each channel.

**Adopt a digital foundation that will prioritize customer experience.
**While leveraging B2B marketplaces should be part of your marketing mix, if you’re serious about competing with third-party B2B exchanges, you need to invest in your own web infrastructure, in which optimizing customer experience should be the number one priority. That means maintaining a level of relevancy and consistency that follows a vast array of potential buyers across every step of the customer journey. To do that, you’ll need to deploy a digital foundation that collects and analyzes data, creates and publishes content, and helps manage it across digital and offline avenues — transforming how partners and customers engage with your company across every channel.

Few companies know this better than Constellation Energy, which is investing in its own B2B infrastructure in anticipation of a future that may well bring direct competition from B2B marketplace competitors.

Approximately 2.5 million residential, public sector, and business customers rely on Constellation Energy as their energy supplier, each with their own unique set of needs that must be catered to. “We wanted customer relationships to be long-lasting relationships based on value delivered by us,” says Michael Cammon, director of digital marketing at Constellation Energy. “It’s important to take those relationships a step further by truly understanding the problems our customers are trying to solve, and how best to solve them as they relate to energy.”

Any brand looking to set itself apart from larger competitors should take a cue from Constellation Energy by customizing a digital experience platform that will help their marketing teams deliver consistent and memorable messages at scale, no matter the medium.

The sheer size of the energy group at Constellation — with customers ranging from large commercial and industrial organizations to residential and small businesses — meant that any digital transformation effort would have to address problems inherent to large enterprises. “We were very aware that the internal content management system technology we were using in the past was too difficult for a lot of our non-technical content owners to handle,” says Karen Jennings, a digital marketer with Constellation Energy.

One of the challenges for Constellation was integrating legacy software with a digital platform that delivers the tools needed to achieve the company’s marketing goals. “For example, we wanted to look at a scalable system that was easy to use, had an easy to understand vocabulary, and made it easy to manage assets,” says Karen.

By choosing a module-based system with room to grow, Constellation Energy was able to future-proof its digital transformation, while expanding the tools available to content editors using the system. Karen says the company’s content management system choice was based on scalability and growth potential. It also provided a tool that was user-friendly in terms of helping content owners create web pages and manage content, without passing maintenance work downstream.

The result of Constellation’s dedication to its digital transformation takes the customer experience to a whole new level. “For example, we have a team that works in governmental aggregation,” explains Karen. “They work at the municipality level, securing an energy price for everyone that lives in a specific jurisdiction. Now, our team can easily set up landing pages for every community to provide accurate pricing, based on what was negotiated for that community.”

Constellation Energy’s use of an integrated digital asset manager helps the utility company manage content without relying on its IT department, while building highly personalized experiences, custom-fit to meet the needs of a wide array of customers. Whether you’re marketing across third-party sites or your own digital properties, you’ll need an integrated content management system of your own to succeed.

Customer experience is the differentiating factor.
There’s no doubt B2C experiences are influencing B2B design, with marketplaces such as Amazon and Alibaba already fully built to service the needs of the B2B buyer. While mega-exchanges pose a competitive threat for some established B2B companies, notes Tristan, they are vulnerable to companies that can deliver more personalized online experiences. That’s why succeeding in the context of this emerging dynamic means developing the right experience delivery framework for your business. In order to optimize marketing, sales, and support, B2B companies need to understand that optimizing customer experiences on their own websites is the key to remaining competitive.
Whether you’re leveraging a large third-party marketplace, your own B2B e-commerce site, or a hybrid solution, experience is everything. Determine the right digital strategy that will help you create the kind of memorable experiences that your customers will want to come back for, while making sure you’re not negatively affecting your existing distribution channels. With the right approach, you can set your company apart as a customer-centric enterprise, willing to go above and beyond to cater to your customers’ needs, regardless of where you interact with them.

Learn more about Razorshop B2B online, or explore how Adobe is facilitating fluid B2B experiences in high tech and manufacturing. Read more in our series with Sapient Razorfish.