B2B Consumerization Challenges
The research team reviewed case studies and trends of B2B enterprises and large mid-market companies to identify the challenges faced by these companies as they find that consumerization and advanced digital tools (especially by digital natives) are changing the way they purchase products and services, gather client analytics, and transition to online platforms. The research team also worked to answer questions generated from the initial research, as well as locate additional reports (paywalled) that may contain valuable information. Complete details about the findings as well as the research strategy that led to these findings are provided below.
Are the changing demographics of B2B purchasers still affecting their buying and decision processes/expectations?
- Yes. In our initial research, the team located a 2015 report from McKinsey that highlighted the purchasing journey was changing for B2B companies. One example used in the report noted that rather than dealing only with the purchasing executives for a large chemical supplier, the B2B seller was responding to demands from manufacturing executives who were collaborating on the decision with the purchasing agent.
- A 2019 report noted that for many B2B sellers, the buying decision comes from multiple people in multiple departments; it “doesn’t come from one person in most cases.”
- It should also be noted that almost 50% of B2B buyers are millennials. According to Forbes in 2018, this was a growing trend.
- In this kind of environment with a changing customer base, B2B sellers have to be ready to change their content marketing tactics (millennials don’t tend to search for products or companies by name, instead they focus on the problem they are trying to solve).
- Also, with millennials at the helm, they are likely the buyers that drive up the rate of B2B buyers who watch a video at some point during the buying process (70%). This means that B2B sellers might benefit from including videos focused on how their products solve problems.
- A further point is that these sellers need to also be sure to optimize their websites for mobile as this is a preferred mechanism for many customers.
- The B2B buying process, overall, has not changed. B2B buyers recognize a problem, search for information and resources, evaluate and compare solutions, make a purchase that solves the issue, and evaluate the experience post-purchase.
- While the overall process has not changed, what has changed is the increased length of time and intensity involved in the process. This process has increased in length and intensity because more decision-makers are involved (6-10 people) who need to find consensus and often then need to get buy-in from organizational leaders.
- Technology has been a major driver of this change as B2B sellers have access to tools that help meet client needs, but clients then evolved their needs which means that B2B sellers have to continually innovate to stay ahead in the sales arena.
- According to survey results from 700 enterprise B2B decision-makers, it is the new technologies and the increasing digital expectations of customers that pose a top threat to B2B sellers (84% of respondents felt it was a top threat).
Who are the different roles/decisions makers described in the initial research, is it still occurring as a challenge for B2B sellers?
- The 2015 McKinsey report went further to describe that the different business models and company sizes (based on employee numbers and not so much on revenue) created different buying environments. For instance, large companies with a lot of employees heavily focused on cost had purchasing decisions that were made by the CFO and the finance team. Conversely, smaller companies that might be “owned and managed by technology experts” are more focused on the B2B seller’s product catalog and upcoming innovations.
- In both of these scenarios, rather than one person or a smaller ‘typical’ team of decision-makers making the buying decision, whole teams of different levels and departments were making the decision. Buying has become much more democratized.
- Harvard Business Review found that the decision-making unit is now made up of 6.8 people rather than the 5.4 that made the decisions “a couple of years ago.”
- Forbes suggests that B2B sellers take a hard look at their sales materials to ensure that all the people who make a buying decision have access to the right information, designed for them in mind. This can be done by ensuring that a potential buyer would not need to speak with a sales rep to make a decision. It is recommended to consider content pieces as an official sales representative by personalizing content for each potential buyer. This new "content rep needs to identify the right customer, qualify them, answer objections, deliver value, build trust and get the company invited to the final buying phase."
- An example of this in action can be observed with Berlin Packaging, a hybrid packaging company that supplies wholesale bottles, containers, etc. as well as financial and other supply chain services. In the highly competitive B2B purchasing environment, the company needed to deliver content the was relevant and keyword-search rich so that not only could customers with problems find them but all customers in the decision-making unit could get the information needed. The company created a blog that had “sections of content built out on their website featuring case studies, a ‘markets served’ section and well-thought-out content about the company’s mission and operations.” Berlin Packaging observed a 27% increase in conversions compared to the prior year (when those content changes had not yet been made).
CHALLENGE #1: Better Analytics
- Many B2B sellers focus on and are challenged by the need to “build a better analytics stack.” More than half (51%) of decision-makers in marketing, IT, operations, merchandising and retail believe that analytics and business intelligence “is their most-likely digital experience investment.”
- Integrous Marketing found that by choosing an integrated analytics platform, they were able to discontinue manually gathering info into Excel, they developed better data visualization tools and data storage repositories, and used employee time much better.
- After shoring up its client analytics capture and reporting functions, the team at Integrous was able to reduce the time spent on reports by 65%. The company also saw a 50% increase in revenue for their clients.
CHALLENGE #2: E-Commerce Transitions
- 72% of B2B enterprise decision-maker survey respondents believe that the majority of their company revenue (41% or more) will be derived from e-commerce sales. However, less than 50% of B2B sellers have an online store. This represents a clear challenge.
- BAUHAUS is a company that focuses on home improvement, gardening, and outdoor living. The company has a long history in B2C sales and started its B2B journey in 2015. Since taking the steps required to set up online commerce for its business clients, the company saw a 376% increase in conversion rates.
CHALLENGE #3: Personalization
- A 2019 report from Episerver that looked at B2B digital experiences and how companies are meeting B2B buyers rising expectations, found that only 51% of B2B sellers used web personalization (e.g., displaying a customer name upon logging in), only 36% planned to start personalizing content in the next year, and 82% planned to use AI to assist in personalization in the next 3 years. 60% of these decision-makers feel that this AI use will replace human workers.
- Personalization is challenging for B2B sellers. It is also an incredible trend as evidenced by 91% of B2B enterprise professionals feeling that a B2B seller “cares about their experience or are providing a better experience” when a website is digitized in such a way as to offer a personalized experience.
CHALLENGE #4: Educating Customers
- 68% of B2B customers prefer to research online and on their own before engaging with a company or sales representative. Worse still for B2B sellers that rely on charm and antiquated linear purchase journey sales processes that include deep wells of one-on-one client education about products is that “60% of buyers would rather not communicate with sales reps as their primary information source.”
- B2B buyers, when asked for the top “ways B2B companies can make it easier to do business with them online,” noted that they wanted pricing online (44%), self-service functionalities (41%), and easy scheduling with a salesperson (37%).
CHALLENGE #5: Complex Transactional Systems
- Many B2B sellers find that orders are accepted in various formats (e.g., email, documents, online forms) and they need to be integrated into capturing systems for invoicing, building a customer database, and accounting.
- Many companies (50%) lack the funds required to “execute digital transformation programs” which might be used to update overly complex transactional systems which is a major challenge for B2B sellers. In fact, “the top internal weakness holding back B2Bs from digital agility goals is legacy, in-house software according to 59% of B2B decision-makers.”
Relevant Paywalled Reports
- Frost & Sullivan published “US B2B eCommerce Platforms, 2018” which is an industry report focused on how “stakeholders changed the B2B sales procurement process and what it will now take for a sales representative to build and maintain a healthy business relationship with their customer.”
- The “Global B2B E-Commerce Market 2018” by yStats.com report focuses on top digital trends and includes top challenges in adopting B2B e-commerce tools.
- DuckerFrontier created a report focused on “Building a Customer-Centric B2B Company” that also discusses the unique challenges B2B companies might face when transitioning from their previous protocols to new ones.
*Please note that because we found this proprietary research using one of Wonder’s data partners, if you’d like us to purchase any of these reports on your behalf, just let us know!
Please note that while the research team was able to identify some top challenges through previously published reports (like those from McKinsey and Toolbox) most of the white papers and reports we reviewed did not go into specific success metrics as a result of the suggested solution to the challenges B2B sellers faced. While the team did conduct thorough research for updated examples and relevant case studies, the available details were not aligned with the top challenges reported. We were able, however, to find a few examples and have included them in the findings. Because of the dearth of information, the team has also identified paywalled reports that might hold valuable data as well as insights about additional challenges B2B sellers might face as a result of digitization and consumerization.