B2B sales has long been an offline, analog process, with a complex web of salespeople, distributors, and value-added resellers each playing a role. But buying is changing, becoming “consumerized” as business buyers seek more consumer-like purchasing experiences.
The result is a mass migration to online marketplaces. A global survey of business buyers across North America, Latin America, and Europe found that 87% of business buyers across all age ranges are already making business purchases on online marketplaces.
To meet buyers’ needs, B2B enterprises have to do much more than online dealer listings and e-procurement portals. In Think SKUs Not SOWs: How Marketplaces Will Shake Up Tech Selling1, Forrester Research details how B2B tech companies can use marketplaces to respond to the demands that their customers are already making for more buyer-friendly experiences.
Reckoning with the digital divide in B2B commerce
Outdated processes and shifting customer preferences are creating a digital divide between B2B tech businesses and the modern B2B buyer. These outdated processes are driven, in large part, by the complexity of B2B sales, which makes digitizing the sales process a challenge.
The gap between what buyers want and what B2B companies can provide is leading to friction in the B2B tech landscape. According to Forrester, this friction is causing two “mission-critical issues”:
Poor visibility into demand. Forrester says, “Many B2B merchants, especially those using older commerce technology, just don’t have the type of market insights that their consumer goods peers enjoy.”
Wasted marketing spend. As Forrester puts it, “Without a digital feedback loop, it can be nearly impossible to track or measure attribution — the Holy Grail for marketers.”
Enter the B2B online marketplace model
With the online marketplace model, B2B manufacturers are able to navigate the complexities of their sales process and actually deliver on the promise of B2B eCommerce – creating an online channel that buyers actually adopt. Forrester says:
Marketplaces aren’t new, but they will make technology buying and selling easier by reducing friction and increasing sales volume. Small businesses and motivated enterprise buyers (especially those buying indirect goods) will flock to a place that offers choice, makes comparisons easy and pricing visible, features reviews, and has add-ons just a click away.
Forrester details three categories of marketplaces that have been rising in the enterprise tech world for over a decade:
Leading software and infrastructure provider marketplaces
Retailer, distributor, and tech community provider marketplaces
Industry- or role-specific vertical marketplaces
Forrester further states, “Considering all the possible buyer types, industries, regions, customer segments, and tech categories, it’s not hard to imagine that vendors, distributors, retailers, and associations could run thousands of successful, sustainable B2B tech marketplaces in the next 10 years.”
Hewlett Packard Enterprise (HPE) is a leading example. In 2017, HPE launched the HPE Store, a marketplace that brings the tech manufacturer’s channel partners together as sellers and offers buyers the ability to make purchases online. It includes online configuration features, as well as price quotes for customized products and product-bundling capabilities.
The results speak for themselves. Since launch, HPE.com’s monthly visits and average order value have doubled, sales leads have tripled, and over the past six months, average monthly revenue has jumped four-fold from the same period a year earlier.
How businesses can embrace the marketplace approach
To be successful in this new marketplace-driven B2B selling environment, businesses are moving away from the traditional pipeline model, in which margin flows up the value chain and the end seller owns the relationship. Instead, they are embracing the platform model, in which a company builds an ecosystem of partners – like distributors and service providers – and everyone has the opportunity to develop a relationship with the end buyer.
The online marketplace is the platform business model that enable B2B companies to deliver the experience that their customers want. In this report, Forrester offers guidance on change management, and how to transform your company’s approach to selling, to become an enterprise with a marketplace-driven eCommerce strategy.
Central to that transformation: focusing on customer lifetime value, rather than “closing the deal”; embracing price transparency; and shifting from an acquisition-focused strategy to a customer success-focused one.
The consumerization of B2B selling is already here
In Think SKUs Not SOWs: How Marketplaces Will Shake Up Tech Selling, Forrester says, “Much of tech buying increasingly looks like a consumer exercise.” The message is the same whether you’re a software or infrastructure provider; a retailer, distributor, or tech community provider; or an enterprise selling to a specific industry or role. The faster you act on this knowledge and begin to embrace marketplace-driven thinking, the better-positioned you’ll be in the new tech selling landscape.
1Think SKUs, Not SOWs: How Marketplaces Will Shake Up Tech Selling, Forrester Research Inc., 12 November 2019, Allen Bonde.