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March - 2011 - issue > Technology
e-Commerce 2.0
Nitin Mittal
Wednesday, March 2, 2011
As businesses emerge from the economic downturn, they have increased their focus on making the most of customer insights and digital channels to transform the customer experience, open up new markets and reduce organizational complexities.

Traditionally, B2B firms have used the Internet “in silo” to expose their product catalog for order taking. But the successes in the business-to-consumer (B2C) e-commerce world—and the rapid adoption of Internet technologies like Rich Internet Applications and Web 2.0—has prompted B2B firms to rethink e-business strategy. As a result, many of the leading B2B firms are embracing the Internet as foundation platform for all sales and marketing efforts by following the best practices from the B2C world.

On the other hand, B2B buyers are consumers too; the buyers also expect B2B sites to provide the similar experience, content and community collaboration that they get in a B2C site. The desire by the B2B firms to adopt B2C-like techniques and an increase in customer expectations has started driving a B2C/B2B convergence phenomenon.
This article highlights B2B e-commerce market drivers, strategies and best practices for adopting the Internet and web channel for sales and marketing efforts.

Defining B2B e-commerce
B2B e-commerce is an overloaded term. It could mean different things to different people. For the purposes of this article, I define B2B e-commerce as the use of the Internet technologies by the seller to market and sell products and/or services to other businesses while the buyer uses the Internet to research, browse, compare and buy those products or services. In other words, from the seller’s point of view, B2B e-commerce is the automation and replacement of face-to-face sales and marketing processes with a self-service solution that makes it possible for sales personnel to focus on high-value selling.

Key drivers
Over the last decade, B2B e-commerce has evolved dramatically from basic communications and transactions to the incorporation of retail-like concepts including personalized offers, targeted promotions and customer communities as part of the buying experience. This increased focus on the customer is driven by key trends including B2C/B2B convergence and the transformation from product-centered to buyer centric.

While improving operational efficiency has always been one of the fundamental drivers for B2B e-commerce, B2B companies are increasingly using the web channel to improve top-line growth, open new markets and build loyalty and community around the brand.

* Improve operational efficiency
* Deliver an experience that is B2C-like: Rich and customer-centric
* Innovate business model to open new markets
* Increase sales through marketing and merchandising
* Build loyalty and community around the brand

Next-generation B2B e-commerce strategy
Next-generation B2B e-commerce is about delivering a streamlined, buyer-centric and engaging online experience that enables buyers to efficiently interact and transact with the brand and at the same time makes it possible for sellers to reduce administrative costs, increase sales and improve brand loyalty.

There are three key elements in the next-generation B2B e-commerce strategy: Operational automation, buyer-centric marketing and rich customer experience. These three elements come together to deliver next-generation B2B e-commerce that is efficient, personalized and offer a rich, engaging experience.

Operational automation
The primary goal of operational automation is to reduce cost-per-transaction and optimize quote-to-cash cycle time; this improves the bottom line by capturing a zero-touch, perfect order in an efficient manner. The key to achieving this objective is to replace phone-, fax- and email-based manual processes with a web-based, self-service solution that delivers a customer-specific catalog and product pricing. Research has shown that the cost of an average web self-service session is less than one dollar, compared to $10 for an email response and $33 for a telephone call. In addition to helping reduce order errors, automated operations may improve turnaround time and reduce contact center call volume—which could provide significant cost savings.

Buyer-centric marketing
Unlike mass marketing, buyer-centric marketing is focused on a deep understanding of customer needs, segments and behavior. The intent: Deliver targeted and contextual marketing messages to help influence the decision makers. Examples of buyer-centric marketing include cross-sell, up-sell, quantity based promotions (such as 10 percent off when ordering 100 widgets), incentives for placing orders online and new product offers. These marketing tactics, similar to a B2C site, may enable B2B firms to transition from “order takers to demand generation,” increase customer wallet share and achieve higher retention rate.

Buyer-centric marketing may also help build brand loyalty and community for both company and products. Research indicates that B2B marketers are increasingly relying on interactive marketing tactics such as email, branded micro-sites, search marketing and rich media to help promote their brand and attract customers.

Rich customer experience
Delivering a rich experience is fundamentally about becoming easy to do business with, which includes delivering a rich online experience, providing access to information such as entitled price or stock availability to aid in purchasing decisions and offering online communities to support customers post purchase.

The challenge is that B2B sites typically tend not to focus on site experience, which results in lack of online self-service adoption and thereby increases call center volume and lowers customer satisfaction. By adopting some of the proven technologies and concepts from the B2C world such as Rich Internet Application (RIA), Web 2.0 technologies, and social commerce capabilities, including ratings, reviews, and communities can help streamline buying experiences and accelerate the online self-service transformation.

Four steps to implementing B2B 2.0
As it requires human behavioral changes in both seller and buyer side, implementing next-generation B2B e-commerce is a true organizational and business transformation. This section will discuss four steps to progressively implement the strategy.

The four steps are:

1. Online order taking—The first step is to replace manual order taking processes with an online self-service channel to reduce administrative costs, reduce errors and improve turnaround time. Transition to the online channel could be significant shift for certain industries; hence rich online experience and ease-of-use becomes critical. Businesses can also offer incentives, discounts, and training to motivate buyers to use the online channel.

2. One-to-one marketing—After automating order-capture processes, the next step is to take advantage of web marketing techniques to serve various buyer personas by delivering targeted information in an effort to influence the purchasing process. For example, an engineer visiting the site will be interested in viewing product specifications to understand technical details, while a procurement manager might be looking for product promotions.

3. Online order making—This step turns your site into a best virtual salesperson by offering relevant product promotions and marketing campaigns based on buyer profile, order history and online/offline behavior. The key is to nurture an ongoing dialogue with the buyer by capturing triggers (such as page views/clicks, abandoned shopping cart or any time-based events) and responding with actions (such as promotional offer, customer landing page or a mobile SMS message). An example of a trigger would be a customer viewing a specific product review or forum. And the responding action would be display of a related promotion, either in the same session or during the next visit, offering an incentive to the buyer to complete the purchase.

4. Community marketing—Online communities and social networks provide a huge opportunity for B2B firms to turn their site into “a destination” by fostering collaboration with and among end customers, providing a forum to gather product feedback, elicit new product ideas and address any product related issues. For example, a leading industrial supply firm uses social networks to discuss how they are serving the market by making a connection to the current news events to drive traffic to the website and to build credibility.

The author is Consultant, Saviance Technologies
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