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.”
“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.”
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.
“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.
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.”
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.
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.
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.