The B2B customer buying journey has been forever transformed by the internet, and this has major implications for manufacturers, brands, and distributors – are you acting to disrupt the B2B sales disruption?
The writing on the wall has become reality. B2B selling channels have forever changed in the age of the internet and mobile devices. Traditional selling models have shifted, and the central communication point for business value propositions has moved from physical to digital in most industries.
The brutal reality is that if you aren’t well represented on the web, you are dying.
Somehow, this trend has caught many manufacturers, brands, and distributors by surprise. Most remain ten years or more behind where they need to be in terms of digital transformation. A clear call to action is being sounded by B2B buyers (your customers) to meet expectations for digital interaction, research, order support, product service, and Ecommerce. B2B firms not acting now are jeopardizing their very existence.
Well, this story has played out before – in the retail landscape.
In the B2C marketplace, consumers have shifted buying, product research, and customer service preferences online.
As they did so, dozens of once-prominent but slow moving retailers have closed their doors forever. More than 9,000 and mortar retail stores are expected to close in 2017.
Major brands – including household names like Macy’s, Sears, and J.C. Penney – are on the ropes and continue to announce store closures. Even the mighty Walmart significantly trails Amazon in terms of e-commerce market share (though, to their credit, they have been making up ground more recently).
In similar fashion, sales channels are changing in B2B industries. Executives ignoring the same trends in B2B e-commerce have already put their companies at risk.
If you’re not embracing digital transformation, know that your competitors and big players like Amazon are, and this will all quickly pass you by and could very well put you out of business.
Find out how B2B industries like manufacturing and high tech transformed amid the pandemic. Manufacturers had an important realization: Your buying experience should be simple, even if your products aren’t. This is a valuable takeaway for every industry.
In the past, the B2B sales chain had three steps (in its simplest form):
As an example, consider a repair shop in the automotive industry. The shops servicing vehicles are the final business buyer and customer. Manufacturers of automotive components would produce aftermarket parts, which would be sold to distributors with a local presence close to the shops (often stocked by the distributor or available on short notice from the manufacturer).
The repair shop then would order the parts from the distributor when needed, and they would get delivered quickly (usually within a few hours) to the shop by a local delivery vehicle. Simple, right?
Well, traditional sales channels have evolved, driven by changes in buyer behavior. The disintermediation of channels is the result.
That auto repair shop is now using multiple ways to research and buy their products, with digital and e-commerce at the center of it all. As perhaps the biggest sign of change (and forthcoming disintermediation), Amazon recently announced a move into the B2B automotive aftermarkets industry, and the company is expected to become a large player in this sector.
Technology has changed how we shop for everything, including car buying. Find out how two companies are transforming the automotive industry.
Today’s B2B customers expect a broader selection, faster delivery, and more product information—all of which is accessible through multiple devices (e.g., mobile, desktop, mobile apps, marketplaces, and other channels).
They also expect to be able to buy the products and services they need through multiple channels, including:
Collectively, these trends are a part of a digital transformation taking place across industries. The landscape of selling channels has changed – which creates opportunity, and risks, for you.
Is your business accommodating these shifting preferences?
Digital transformation in distribution is growing as midmarket wholesale distributors realize the benefits of intelligent technologies.
After acknowledging these changes are happening, what should your company do next? Well, don’t panic. It isn’t too late – yet.
If you’re a manufacturer or a brand, confront the reality that your customers are researching and buying differently – and the definition of your customer may also have changed.
Resellers’ roles may be diminishing. Leveraging new distribution channels to sell directly to your customers can drive competitive advantage. My advice:
By making it easier to buy your products, you will generate more revenue by increasing your share of wallet from existing customers and gaining additional customers.
What it takes is breaking down traditional thinking. In many cases, capture these benefits is less about recognizing the digital opportunities for your company, and more about overcoming organizational inertia. Leadership is required here (calling all CEOs!).
B2B marketplaces are springing up across a variety of industries. What are they, and how do they impact traditional B2B sales?
So you might say, “I have existing channels that I need to pay attention to – I don’t want to make them angry!”
Yes. Most manufacturers and brands have existing relationships with resellers. And yes, these relationships are impacted by the channel shift. But that doesn’t mean the relationships themselves have to be adversely affected, as long as you have a plan.
Companies can utilize a number of different tactics to manage existing relationships. Distributors will still likely be a part of your sales channel mix for a long time – but, depending on the industry category, that mix will likely change.
I’ve seen numerous distributors and resellers take a hard look at their own value proposition to their customers in this age of digital centricity. Take a good hard look at this yourself as you think through this – and do it for each of your major resellers.
If you’re in an industry with highly complex products, the role of distributor and reseller will continue. The resellers that add value are the ones that are going to survive, at the expense of, I would suggest, their weaker (and possibly smaller) competitors.
Channel conflict over pricing, of course, is always a concern. Multiple approaches exist to manage this effectively. The most effective method is to require customers to have account access (e.g. a user name and password) to view pricing online, and then only showing contract pricing specific to each account once logged in. Publicly available pricing is at an MSRP (read: high) level.
I also recommend using digital to support and reinforce your traditional reseller channels. Distributors and resellers need information about your products in order to sell them through their own channels, including e-commerce.
Doing so ensures a stronger customer experience on your brand across all channels.
Everything you need to know about customer experience, including: CX meaning, tools, strategies, measurements, and real life examples.
Distributors and resellers need to be honest (really honest) about the value they add to their customers. Don’t just assume that you add value because you have been in business for 1,000 years and have great personal relationships with your customers. Ask your customers why they buy from you to figure out precisely how you add value to every transaction.
Figure out how to differentiate yourself from your competitors. Maybe it’s the fact that you provide better solutions, superior product application knowledge, faster delivery times, amazing customer support, proprietary products, or better content. Maybe you combine products in a unique way to meet customer needs.
Whatever it is, be honest with yourself. The traditional value components of distribution – price and selection – are those being impacted by digital trends (led by Amazon).
Let’s say you sell industrial HVAC equipment in what is typically a very consultative process. Maybe your sales process requires a lot of expertise to make a decision on the right mix of products for the customer’s application. For example, consultation with electricians, architects, and contractors are required, complex measurements are required for installation, and each installation is in a unique environment – and you help customers with each of these steps. This is real value. E-commerce is not going to replace every aspect of the selling solution.
As a traditional distributor or reseller, you should also be thinking about making digital shifts in your business model. If you are a sizable player and have your own proprietary products (as many distributors have introduced in recent years), think about doubling down in this area. You can capitalize on areas where you have deep knowledge and expertise, and your product can stand on its own. Acquiring one or more of your suppliers is another avenue that could be pursued to accelerate your positioning here.
The point is, find the areas where you can differentiate – and blend this with a digital and e-commerce approach – and you will be in reasonably good shape to compete.
Business is about buying things, selling things, and engaging with customers. CX is about providing experiences that make people want to engage with you, buy from you, and buy again.
The Internet has changed the way B2B buyers research and obtain the products they need. Your buyers have already moved beyond using only traditional channels to research and purchase. If your business doesn’t adapt, your competitors will, and you will be impacted. But this is also an opportunity.
Move now. It’s that simple.
