B2B E-Commerce Now Essential, Not Just Important
Most B2B companies have developed a customer-facing e-commerce strategy and some level of capability. However, digital transformation has accelerated given recent events. B2B executives must consider taking e-commerce to the next level sooner rather than later.
In a recent article, The B2B digital inflection point, McKinsey discusses the findings of its survey of B2B businesses across 11 countries and 7 industries and concludes, “Looking forward, B2B companies see digital interactions as two to three times more important to their customers than traditional sales interactions.”
Scoping An E-commerce Initiative
There is no one-size-fits-all for customer-facing e-commerce. Nearly all B2B companies compete in heterogeneous markets with different customer segments, multiple sales channels, and complex purchase processes. Thus, there are many possibilities for taking e-commerce to the next level.
To accomplish this cost-effectively…
- Start by conducting an audit of your current e-commerce strategy and capabilities to identify potential issues and opportunities.
- Then gain an in-depth understanding of customer needs and the marketplace to evaluate those issues and opportunities and discover any unmet needs.
For the customer/market research and analysis, your company must decide whether A) your e-commerce capabilities will just complement existing marketing programs and sales channels or B) you also want to establish a distinct e-commerce sales channel.
- Complementary capabilities include digital promotion, customer engagement tools, and automated channel management. All these capabilities support existing programs and channels.
- An e-commerce sales channel could be selling direct to customers via your own website and/or selling via a 3rd party marketplace or e-tailer like Alibaba, Amazon, 1000 Bulbs or Supply House .
Both approaches are major undertakings, but establishing a new sales channel is particularly challenging. Having an in-depth understanding of customer needs and the marketplace enables your company to drive change and successfully implement a new e-commerce strategy.
Evaluating E-Commerce Needs & Outcomes
To develop complementary capabilities, customer journey research and analysis is a commonly used methodology. By mapping and analyzing how the customer goes from awareness to purchase and ultimately loyalty, your company can understand the current – and potential – role of e-commerce in the customer experience and decision-making.
Also, you can conduct Voice-of-the-Customer research and analysis to drill down on a particular step within the customer journey. With these results you can determine how e-commerce can improve the customer experience and thereby influence the purchase decision and enhance loyalty.
- To learn more, read our thoughts on customer journey, Customer journey and digital marketing, and the McKinsey article on customer journey and its implications for the marketing mix, The customer journey decision.
Establishing e-commerce as a distinct sales channel is a classic channel strategy question updated for the digital age. A well-established framework exists to answer this strategic question, which can be applied as appropriate for your company’s needs. The ultimate goal is to determine what role e-commerce plays – or could play – as a sales channel in your market and, if it does/could play a significant role, what should your company do?
Once the customer/market evaluation has been done, your company goes into execution mode. There are three main phases of implementation, with multiple steps in each phase. The project team typically consists of cross-functional and global members. It can also include outside resources to help shepherd the process along, provide experience and offer a neutral perspective. In short, the team must define the requirements, build the capability and then launch.
Implementing e-commerce can be time-consuming and costly, but fast-track, lower-cost alternatives are possible. Different options can be evaluated, and we have definitely seen instances where a simpler, lower-cost approach works. Regardless of budget, we recommend going through these phases to assure selecting the e-commerce system that best fits your situation.
What’s involved with each implementation phase:
For the Requirements Definition Phase…
- The team needs to choose an e-commerce platform. This can require significant investigation, which may be augmented by research from companies like Gartner or Forrester. They will likely need to write an RFP, manage a review process and choose a vendor to assist with the technical build.
- Next, the team collaborates with the vendor on a Statement of Work (SOW) to outline the project deliverables. It is crucial to get the SOW right since it defines what the vendor will (or will not do) for the agreed-upon price.
- As part of the SOW, the team should specify connections the new e-commerce system will have with existing platforms, e.g., marketing automation for lead nurturing, CRM, financial payment systems and order fulfillment systems. Missing possible integration points in the up-front planning process can cost money and time.
For the Build Phase…
- First, the team and vendor draft a Business Requirements Document (BRD) during a brief planning period. The BRD incorporates results from the customer/market evaluation.
- From there, they create the e-commerce system and screens, beginning with wireframes (page blueprints) and leading to specific User Experience designs.
- Then they develop the back-end and front-end (what users will see) and upload the content into the completed shell. Allow for sufficient time to create the right content and to upload it into a new e-commerce site.
- Finally, the site goes through a User Acceptance Testing to ensure everything is working as envisioned.
For the Launch Phase…
- Companies must communicate, promote and manage their new e-commerce capabilities. Planning for launch typically takes months but can be done concurrently with the final building and testing.
- Many companies decide to launch a Minimally Viable Product (MVP) with limited functionality, rather than try to introduce all features at once. This reduces risk and also allows the team to “learn by doing.” Subsequent phases can be rolled out over time, making adjustments based upon usage and user feedback. Eric Reis’ book, Lean Startup, offers great advice for using the MVP approach.
We recommend communicating with end users and all sales channels through the implementation phase. This input often leads to real-time course corrections and helps frame communication and launch plans.
The Monitor Phase (post-installation)
After the e-commerce solution is in place, you must assure the system is fully operational and, if relevant, the planned supply chain is working. Every launch has hiccups, and so the early days involve managing issues on a daily basis.
During this phase, you will also track results, especially revenue and profit. The investment in e-commerce likely required a business plan with expense authorization and an estimated ROI. Not only will your company want to hit – or surpass – those ROI goals, but you may have market share goals, which also helped justify the project.
With e-commerce, you must consider many interconnected issues. “Winging it” with little customer/market insight or preparation can be risky. As with any major undertaking, great strategy, planning and implementation ensures success.
Are your company’s customer-facing e-commerce strategy and capabilities sufficient for today’s market? Can you gain a competitive advantage by taking e-commerce to the next level?
Most B2B companies have done something on e-commerce, and many certainly plan to do more, but given current trends, B2B marketers must consider taking e-commerce to the next level sooner rather than later.
RS Consulting USA and our marketing technology partner, Loomis Marketing, offer a unique blend of B2B experience and consulting skills. We enable your company to develop and implement a customer-centric strategy and capabilities cost-effectively.