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Business buyers today have higher expectations for B2B commerce experiences than ever before. Largely due to emerging technologies and changing shopping habits in their personal experiences, these B2B buyers want to engage with distributors and manufacturers in a streamlined, customized fashion.

This changing atmosphere presents a great opportunity for distributors that are ahead of the digital curve, as advanced commerce offerings increasingly drive loyalty and long-term sales through highly relevant and refined experiences. But organizations which fail to deliver on these evolving expectations will see it negatively impact the bottom line through higher attrition and decreasing share of wallet. With increasing access to attractive alternatives, business customers are quick to take their orders elsewhere if their needs are not met. To avoid losing business to competition, distributors must ask themselves: “how easy is my company to work with?”

To answer that question, distributors need to look at their current digital offerings. Those that are still operating with outdated technology and legacy systems should consider embracing cloud-based commerce to offer business customers the effortless shopping experience they’ve come to expect.

Digital solutions are now a crucial revenue driver

In the past, many distributors and manufacturers relied on the 80/20 rule, focusing their time and energy on 20 percent of customers who generated 80 percent of profit. They accomplished this often with long term contracts which locked in their most profitable customers, thereby creating a base of sustainable revenue. Improving the financial performance relied on one of two key options: gaining new customers through mergers and acquisitions, or reducing operating costs to increase marginal profit. These were easier paths to take, since they did not necessarily require new capabilities. Most distributors/manufacturers neglected a third option: penetrating the long-tail market to attract higher volume customers of lower value with unique operating models.

And that made sense. The traditional model of penetrating the long-tail required a vast amount of resources and was a process that could take years to develop, so many distributors preferred to focus on high-value existing clients. But now, advanced digital technology has enabled manufacturers to reach a market that was previously inaccessible without shouldering massive costs. 

But, how?

Forward-thinking distributors are using cloud-based commerce technology to give customers more self-service tools to access information, order products and request services, reducing the burden on sales representatives and other employees. Whether or not a customer portal is used to complete the transaction, it enriches relationships by providing speed and convenience to both customers and the distributor team.

These self-service platforms help businesses keep the customers they already have and make it easier to gain the ones they want. That’s because these tools save time for both the business and the customer, enabling faster, smoother purchases. And companies can invest less capital in the process.

For example, recently the CEO of a global chemicals manufacturer announced his intention to double their customer base by 2020, putting his team on notice to add 25,000 new customers in three years. Traditionally this would have required significant upfront capital investments in M&A activity to buy market share either from direct competitors or in adjacent markets. In this case, however the organization realized their opportunity was in acquiring and retaining the thousands of smaller volume customers who don’t purchase through long term contracts. 

Instead, they invested in marketing automation capabilities to nurture these customers into a more highly qualified lead before a sales person ever gets involved. They also built a customer portal to allow customer setup, order review, invoice management, and customer care issues all to be handled without burdening the customer service team. These investments, which were delivered in under six months, allow the organization the time and flexibility to attract and service a new customer profitably in a brand-new way.    

Cloud-based technology enables increased agility

Distributors and manufacturers cannot make the leap to improved customer service without cloud-based solutions that allow them to act rapidly. Traditional approaches that isolate issues (like upgrading a fulfilment or shop system) will limit new initiatives due to the additional resources they require. In the cloud, manufacturers are able to break down IT silos that make improvements slow and cumbersome. With this technology, distributors have the time and budget to address valuable feedback gained from the customer portal to further improve relationships and implement more efficient processes.

Cloud technology also enables small, iterative changes made over time to tweak systems for the better. Historically, organizations spent so much money and time launching new initiatives that they often did not have the budget or the organization commitment to nurture them effectively. Utilizing tools already built in the cloud, manufacturers waste less resources upfront and can devote energy to consistently improving solutions over time, based on customer feedback.

Scott Webb
Partner and President of Avionos

Agile, cloud-based technology that improves the customer experience has allowed manufacturers to double their customer base. With more efficient service, better offerings and more resources to constantly improve processes, these companies will always be ahead of those that rely on traditional models. Therefore, if distributors don’t integrate the right technology to perfect digital offerings soon, they’ll risk falling farther and farther behind to more innovative competitors.

 

Scott Webb is a Partner and President of Avionos. Scott has accountability for executive leadership and go-to-market strategy, including direct responsibility for managing all sales and business development efforts.

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