Earlier this year a noted business research organization, McKinsey and Company, published something that really got our attention. Titled “Busting the five biggest B2B e-commerce myths” the article struck a chord with both the KYKLO team as well as many of our clients. Affirmation is a thing of beauty as people continue to send this to us months after it was published!
What are the biggest myths?
- Most B2B companies don’t offer e-commerce.
- B2B buyers prefer face-to-face interactions.
- Just a basic e-commerce site can suffice.
- E-commerce is only for repeat or low-ticket purchases.
- A digital marketplace is a next-level “nice to have” element.
We could probably come up with a few more, but legendary radio personality Casey Kasem discovered some magic in touting his internationally famous Top 10, so we are going to stick with the Top 5. We decided it might be cool to dig a little further into each of these points and add a bit of our own spin.
Most B2B companies don’t offer e-commerce.
McKinsey states, “65 percent of B2B companies across all sectors are employing e-commerce.” The numbers somewhat mirror those of distributors. In a report published by the Distribution Strategy Group titled “2022 State of Distributor Sales: Rewriting the Distributor Sales Playbook for a New Era”, author Frank Hurtte of River Heights Consulting reports:
“More than half of the distributors interviewed said that they are using e-commerce as a sales channel. While we don’t have data indicating whether they are selling 1%, 20%, or 100% of their business offerings through e-commerce, the 58% number is significant. Thankfully, the price tag of becoming involved in e-commerce is shrinking, so we’re seeing more distributors, even smaller ones, moving into that space.”
We like the comment on “the price tag of becoming involved in e-commerce” because the work KYKLO does has certainly been one of the drivers of this cost reduction. Hurtte made a special mention in his report that e-commerce is not just for large distributors. Since day one, KYKLO has strived to level the playing field for small to mid-sized distributors.
Explore KYKLO's Distributor Solutions:
Another report published by Digital Commerce 360, chimes in with another interesting bit of information. Titled “B2B distributor ecommerce sales are poised to grow 25% in 2022” the report says:
“The distributors and wholesalers that are learning and living that lesson now will turn first-time digital buyers into loyal return customers. They’ll take e-commerce sales — and market share — away from competitors that aren’t changing with digital times.”
Experience across many KYKLO clients indicates the tables have been turned. Instead of distributors finding new customers, customers are finding them. Those who have developed a strategy for welcoming new customers are turning these buyers from one-time purchasers to full-time customers, often cementing the deal by offering value-add services to the customer’s repertoire of solutions.
B2B buyers prefer face-to-face interactions.
Over the course of the COVID Pandemic, customers shifted their decision-making methods. This is driven by two major shifts:
- Demographic shifts. Digital native Millennials have become a bigger part of the market. This group prefers not to be bothered by salespeople. Most of them are focused on work, but many refuse to work longer hours and feel sales visits are distracting.
- New patterns learned over COVID months. During the pandemic, sales visits were often prohibited by local regulations. Business continued, but rather than rely on salespeople for information, customers learned to find the right information online.
One Gartner Study points out:
“Your sales reps have roughly 5% of a customer’s time during their B2B buying journey. Lack of time with buyers coupled with rapidly shifting buying dynamics, fueled by digital buying behavior, is reshaping the strategic focus of sales organizations.”
The study goes on to point out that only 17% of the buying decision is tied to any type of sales interaction. That means 83% of the decisions are made without traditional sales visit availability.
Progressive companies realize this and provide the right kind of information for a customer to quickly and effectively make a decision that brings the customer to them versus their competitors.
Just a basic e-commerce site can suffice.
Just a few years ago, most distributors entering the e-commerce world provided information straight from their ERP system. That information typically included the manufacturer’s catalog number and a 25-character description. While the information might have sufficed for a customer entering an order for an often-purchased item, it certainly was not enough to allow the customer to make a buying decision.
Customers expect the same kind of experience in their B2B purchasing as they experience with Amazon or other high-traffic consumer-based sites. In November 2021, Madison O’Connell shared these thoughts in an article on Salesforce.com:
“The B2B e-commerce world still conjures up thoughts of that dusty website, checking its watch and wondering where everyone is. This is changing, though, as today’s B2B buyer is just as digitally savvy as their B2C counterpart — and they expect the same exceptional service. When it comes to B2B vs B2C e-commerce, the gap in service is narrowing.”
Here at KYKLO we have discovered that the most powerful features in a B2B website are product comparators and product drill-down algorithms. Both aid the customer in precisely finding the right product for the application. Customers save time and effort, and our clients end up making more sales.
Another Amazon feature, the ability to determine which products are in stock, has become a “must-have” in today’s environment of supply chain interruptions. One report done late last year told us customers often pay more attention to availability than price. This point is important for last-minute Christmas gifts on Amazon and equally important to industrial customers working to get a machine running quickly.
E-commerce is only for repeat or low-ticket purchases.
McKinsey answered this question in a survey of B2B customers in February 2021. They discovered 35% of potential customers are willing to spend up to $500,000 using digital means. Only 23% of these same customers limit e-commerce purchases to less than $50,000.
The size of purchase decisions continues to grow. The shocking statistic comes by way of a February 2022 report (again, from McKinsey):
“One in five B2B decision makers are now willing to spend between $500,000 and $5 million on a single interaction on remote or self-service channels. That’s a leap from the 16 percent who said the same earlier in 2021 (Exhibit 11). In addition, seven percent of buyers are willing to complete transactions valued at more than $5 million fully online.”
Paraphrasing the 1897 quote, “Yes Virginia there really is a Santa Claus” one might say, “Yes Virginia, customers really can and do place big orders using e-commerce.”
This brings us to the final item on our Top-5 list. A drum roll, please….
A digital marketplace is a next-level “nice-to-have” item
One of the cornerstones of sales is doing business the way your customers want/need to buy. In the old days, this probably referred to outside sales, a good customer service team on the inside, and the ability to receive orders in person, via phone, and by fax. Thankfully, things have changed. We liked the way the folks at B2B Online put it:
“B2B customers today expect to be able to interact with your brand through your website, visits to your physical location, and even social media. What's more, they expect the same level of consistency and convenience in their professional buying transactions...”
Summing all of this up
KYKLO can help you make your B2B e-commerce plan a success. Our clients will tell you it’s not just about our industry-leading library of enhanced SKUs. A KYKLO sale is never final. We constantly update your capabilities. We provide expert guidance. Our team of Customer Success Specialists continue to provide guidance and support long after every client’s system is up and running.
Since we are having fun providing links to other blogs, here is one from our own blog where one KYKLO client had this to say:
“Our Customer Success manager is like a part of our team. We have a standing meeting once a week to review issues and lay plans for improving our system. She knows our people and they know her even to the point of knowing about her cute little dog. We know how she works, and she understands us equally well. When we need to talk to KYKLO about anything, we call Siobhan… We brainstorm as a group. Our CSM is an active participant. In that type of setting, it’s hard to say precisely who had the original idea, but I will say, the outcome of our sessions is much better because of Siobhan’s participation.”
Give us a call, send an email, heck, shoot up a signal flare. We are here to help.
