Business to Individual (B2i): The New Imperative for B2B E-commerce Marketing?

October 15, 2013: Mike Ni CMO AvangateB2B buying behavior, specifically research and evaluation, is shifting more towards online mechanisms. This behavior is being fueled not only through Internet connectivity speed or access but device usage as well. Mobile device adoption brings information to the B2B buyer anytime and in almost any location.

Naturally, B2B marketers are looking at more ways to capitalize on the sales opportunities found online and look at e-commerce as an opportunity to build the sales and revenue funnel. B2B e-commerce extends far beyond traditional product purchases and into subscriptions, software add-ons, renewal services, and premium memberships, among other opportunities.

I had the opportunity to speak with Michael Ni, CMO/SVP, Marketing and Products, of Avangate, an e-commerce platform designed for the software and cloud service markets, about the evolution of B2B e-commerce and the need for B2B marketers to establish true business to individual (B2i) connections.

Here are questions and perspective from my phone interview with Michael.

Please explain what Business to Individual (B2i) means and how B2B marketers can shift their mindset.

Customers (B2B or B2C) are buying more like “prosumers”. They are searching and researching online, looking for solutions that fit their specific needs, and certainly trying before they are buying. Search is one access point, but B2B organizations also need to consider the information accessible through affiliates, publishers, distributors, analysts, other customers via social or other channels, not to mention competitors.

As I wrote in a recent blog post, the new business-to-individual (B2i) sales model puts a greater emphasis on understanding customer needs and building customer relationships that grow over time.

In fact, the whole buyer consideration process is changing – especially as you look at it from the customer buyer journey. The buying process is not only much more self-directed, but influence has fundamentally changed from just 5 years ago.  Research conducted by McKinsey and Harvard reflected how the traditional purchase funnel has now changed to customers not only dropping into the purchase funnel at any point, but are also constantly growing and not shrinking the number of brands they consider for purchase. For example, a network administrator is reading third party online forums in order to optimize their network layout for their latest equipment.

To be truly effective, all these new points of engagement and discovery, or additional points where your users are looking to optimize their value, have to become frictionless. These new moments of truth with your prospects and customers are diverse, numerous, and specific to certain situations and contexts – and how you respond to the points is how you establish trust to ultimately lead to deeper relationships.

How does content marketing play a part in the B2i experience?

The short answer is: critically! :-) In fact, I like to say that Marketing is the new Sales.  But to get into specifics, consider three different blocks of B2B customer scenarios and how marketing has become a critical coordinating point with content as a critical tool in their tool-bag.

  • Self-Service B2B E-commerce – With the drive to open new lines of revenue, even with existing products, we see marketers going after the SMBs and other markets with B2B eCommerce. And, they are fundamentally leveraging self-service to drive revenue. As mentioned above, content marketing takes on more of the sales cycle responsibility through forms such as introductory videos (for many, as good as the first sales handshake and elevator pitch), tutorials, FAQs, product descriptions, etc. The CEB recently released a statistic that “customers will contact a sales rep when they independently completed about 60% of the purchasing decision process.”  Essentially, the B2B organizations will close the sale with little direct communication to a sales rep, and only bring them in when appropriate, driving sales efficiency.
  • Commerce Enabled Sales – We are increasingly seeing Commerce used to complement direct sales. In this case, content marketing is even more important in gaining interest, supporting, and making it frictionless for customers to purchase add -on services and solutions (think software upgrades, subscriptions, or even service contracts), as well as manage the renewal process, where it’s automated when possible and engages the more expensive sales team only when necessary.
  • Value Added Resellers (VARs) – The tools that vendors use to match how customers increasingly want to discover, buy and manage – self-service, online, and in context to their specific problem – are the same tools that resellers and the channel need to manage your customers on your behalf. In this case, content marketing supports their ability to retain and renew client / customer relationships – often times, it would be the industry-specific and regional expertise, support and knowledge that the customers bought into when they purchased from resellers. More importantly, supporting channel content marketing as a vendor creates a more consistent message across distribution channels.

B2B marketers might be reluctant to invest in e-commerce solutions because of relationships they have with distributors and resellers. Would you provide thoughts on how B2B marketers can overcome this obstacle?

You ask a great question that pertains not just to reseller channels, but applies to organizational questions within a company between direct sales and online self-service teams.  That said, eCommerce and distributors / resellers seem at odds, but you have to segment the problem and look for the right tools to overcome what seems like an obstacle

The first step is segmenting the problem. Consider that the reliance on channels is actually increasing, not decreasing, especially as it relates to the mid-market:

  • Vendors expect channels to continue to be important – 50% of technology sales revenue is driven by resellers (according to a Forrester survey). In the same survey, Forrester expects the percentage of revenue to increase by 4–6%.
  • Vendors are segmenting their sales – A 2013 survey also showed that vendors were increasingly turning to E-commerce for B to small B (sell direct to smaller customers); while for mid-level and enterprise customers, vendors were actually increasingly relying up on reselling channels..

The implications are that marketers should be using the appropriate channels for each audience – leverage E-commerce for direct relationships with smaller vendors who already get little attention from reselling channels, and then leverage resellers where the contextual support and solution capabilities are most needed with the margins to support them.

Bottom-line though, there is going to be some give and take in these types of situations. Here are some of the ways we’ve seen B2B organizations learn how to “play nicely” when it comes to e-commerce, direct sales, and distributor relationships.

  • Define boundaries of revenue / lead opportunity – not surprisingly, size by geography is the simplest, and most oft used cut
  • Leverage each other’s strengths – resellers are often great at landing the first time sale but are weaker when it pertains to renewals, etc. A solid B2i relationship provides customer-nurturing solutions like email reminders and communications to make this process easier and more reliable. These reminders, online outreach and rich content often come from the vendor who has the margins and resources to carry it off.
  • Leverage the appropriate e-commerce tools to handle renewals directly (at the vendor level) while still providing appropriate attribution for the original sales agent / reseller, as well as to redirect customers to the channel for in-context support.

Lastly, would you provide any examples of how the B2i customer experience has led to stronger, more significant B2B sales opportunities?

Sure! Here are two examples:

  • First, a large software vendor. I can’t share the name, but they are one of the top 10 largest
 software companies in the world. They needed to move beyond just direct sales and strongly enter the mid-market with their offerings worldwide. They started with building around a major subscription billing solution – an approach that took them nine months, requiring custom development, and still only resulted in a basic online selling site for the US only. To add injury to insult, they had 20 other products to bring online, not to mention to release internationally. We came in and told them we could help get their product up and running in 30 days in over 100 countries… and we did.  This gave them the ability to not only begin providing a seamless way for individual IT buyers from around the world to easily engage with products priced and marketed to these individuals, but also serve as a rich lead pipeline to build on these individual relationships to penetrate the businesses these individuals represented.

    To deliver the right B2i experience, your whole commerce approach has to provide flexibility to experiment with products and pricing to address smaller and smaller segments, and be hyperlocal with support for the various payment methods different countries use. In addition, you need foreign currency support, tax and compliance built in, not to mention tools to test and optimize the acquisition of customers. In this case, we helped them rationalize the multiple systems to actually showcase, order, and fulfill on their products to become the standard for digital commerce for online sales, subscription, billing and global payments.

  • Second, we work with a cool company, Metaio, who is a worldwide leader in augmented reality. The opportunity they saw was to extend from creating branded experiences for some of the largest brands to establishing their platform into the worldwide developer community.  As a small company with limited product sales or tech support personnel, they were looking for an efficient way to reach new developer markets via channels and with minimal new headcount supporting the necessary changes to the revenue models to go for broad adoption, such as subscriptions.

    Avangate helped Metaio to address this market of literally thousands of individual developers by supporting the multiple revenue and business models needed by smaller businesses through to applications builders. The Commerce platform support resulted in thousands of new developers on-board, increase in online software sales globally by 300 percent, and expansion to over 60 new countries … one step closer to their dreams of ubiquity … one individual at a time.

Final Comments

We have seen example after example of companies embracing the new reality of selling to individuals – B2B being no exception.  This has not only increased their addressable markets, but added new revenue lines for existing products. What’s common across all is the recognition that it is about the individual (buyer at the center), the need to match the multiplying points of engagement with the ability to transact, optimize new business models on the fly and to hyper-localize and personalize—all this accomplished by fundamentally leveraging the new tools available now to automate all of this.

Thank you Mike, for your time and collaboration in developing this interview!

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