B2C Lessons for B2B Sellers

Are business-to-business brands really that different from business-to-consumer brands? While one may point to longer buying cycles, more rational purchase decisions, and focuses on trust and long-term relationships as opposed to one-off transactions; the current reality is that with a younger workforce working from a wider variety of locations, the B2B buyer is seeking an enhanced purchasing experience similar to that of a traditional ecommerce purchase.

In a recent WEX Blog on the rise of B2B Ecommerce, we took a deeper look at an Accenture study which found that as B2C shopping is evolving, purchasers at B2B organizations are not only looking for a more consumerized purchasing experience, but are coming to expect it from their sellers.

The evolving B2B customer demands go beyond the idea of B2B ecommerce, expanding into the entire selling process and continuing to blur lines between B2B and B2C tactics and strategies.

Three B2C Tactics to Add to Your B2B Playbook

As the lines are blurred between B2B and B2C, CFO author John Oosterhouse took a look at what B2B sellers can learn from their B2C counterparts, noting three strategies—segmentation, price elasticity, and cross-selling—that can improve profitability for B2B sellers.

Segmentation

A one-size-fits-all approach leads to troublesome gaps in profitability, especially for sellers with a diverse or international customer base. Consumer-focused brands have long segmented their customers using data on demographics, income levels, location, and preferences.

Business-to-business sellers have the data available to segment their customers by region, industry, size, transaction type, and product line, but using it effectively is another challenge.

According to B2B International, one of the more effective yet complex B2B segmentation methods is through needs-based segmentation, noting the following four common types of B2B buyers:

• A price-focused segment, which has a transactional outlook toward doing business and does not seek any ‘extras’. Companies in this segment are often small, working to low margins, and regard the product/service in question as of low strategic importance to their business.
• A quality and brand-focused segment, which wants the best possible product and is prepared to pay for it. Companies in this segment often work to high margins, are medium-sized or large, and regard the product/service as of high strategic importance.
• A service-focused segment, which has high requirements in terms of product quality and range, but also in terms of aftersales, delivery, etc. These companies tend to work in time-critical industries and can be small, medium, or large. They are usually purchasing relatively high volumes.
• A partnership-focused segment, usually consisting of key accounts, which seeks trust and reliability and regards the supplier as a strategic partner. Such companies tend to be large, operate on relatively high margins, and regard the product or service in question as strategically important.

Pricing Elasticity and Optimization

For B2C sellers, even a small change in price can have a drastic effect on profitability and market share. However, with purchases in a B2B environment based on need, sellers implementing price optimization into a pricing strategy can better measure the impact of a price change on profitability and market share.

With price optimization, a company is able to identify target prices at the deal level to ensure the sales team is winning deals at the highest level of profitability. With deals based on trust in B2B environments, finding the right pricing mix can enable suppliers to discover the “sweet spot” that balances winning business at the maximum profit level.

CrossSelling

With the added visibility from segmentation and win-rate elasticity, B2B enterprises can leverage similar internal transaction analytics that speak to customer behavior. By marrying this data with competitive intelligence data, a company can have a comprehensive look at customers’ needs and options.

Like the average consumer, B2B buyers want to simplify their buying behavior to be efficient and cost effective. If you notice they are looking elsewhere for a supplemental part that adds value to your own product, fill the gap.

A Target Marketing Magazine article shared tips on informing your cross-selling strategy with data, recommending that organizations take a customer-centric view, working to break down departmental barriers and using data to understand who would be most likely to need additional products or services.

Bonus: Meeting the Payments Needs of Your Customers

Consumer-focused businesses strive to meet the needs of their customers, and B2B sellers should be no different. Just as the Diners Club card changed the way that customers did business with restaurants throughout the 50s and 60s, being able to adapt to the way that your customers pay in B2B is equally important.

With more and more customers evolving their own payments strategy, using virtual card numbers to pay suppliers, it pays to accept VCNs if you haven’t begun to do so already.

Organizations that accept VCNs are not only able to meet evolving needs of their customers, but also get paid faster, reduce paper waste, see improvements to payment security, get paid in their own currency without complex transfers, and receive better access into data.

Learn more on why it pays to receive virtual payments in the WEX Blog, 5 Reasons Suppliers Love Receiving Virtual Payments.