Channel Conflict: No Longer a Showstopper for B2B eCommerce
When it comes to B2B eCommerce, buyers are unquestionably in the driver’s seat. Customers act more like free agents, preferring to search and buy online with any computer or mobile device within reach. This trend is so pervasive that B2B companies will experience 25 to 50% more revenue risk if they can’t conduct commerce online, according to Forrester.
Unfortunately, such observations do not mean that establishing an eCommerce storefront is a guaranteed success. After careful consideration and discussion, executives often are paralyzed by the realization that online commerce could potentially upset – and even anger – the existing ecosystem of sales reps, distributors, retailers, and dealers. Once fear, doubt, and uncertainty enter the ROI equation, online store development is tabled until the time is perfect.
Here’s the problem: there will never be a truly perfect moment to dive into B2B eCommerce. With careful thought, planning, and collaboration, B2B businesses can overcome channel conflict by working through their differences to drive collaborative, mutually beneficial strategies that deliver long-term success.
Digitized Commerce: Is It Worth It?
Sales channels are the primary revenue drivers in the B2B ecosystem, so any change to the existing infrastructure appears to introduce a lot of risks. Executives are hyper-focused on giving customers the best experience possible while not upsetting the rest of the business, and this balance is never easy to maintain.
It’s readily apparent that an eCommerce platform increases competitiveness and enables the 24-7 service that customers crave. Still, though, the discussion always seems to focus back on channel conflict – and the status quo looks much better than the potential worst-case scenario.
As Laurence J. Peter, the Canadian educator best known for the Peter principle, once advised, “Bureaucracy defends the status quo long past the time when the quo has lost its status.” When it comes to B2B eCommerce, the status quo has just about lost its status.
The biggest threat B2B organizations face today is the market itself. Like it or not, customers and competitors are on the fast-track to digitized commerce. If companies don’t find a way to manage channel conflicts today, they are highly vulnerable to competitors that do, as well as customers who expect engaging, streamlined digital buying experiences.
Take heart, though. None of these challenges are insurmountable. The key is in rethinking the structure of the value chain between production and the customer.
Five B2B eCommerce Strategies for Managing Channel Conflict
Eliminating channel conflict is a tough task, even though some think it’s as easy as setting up a browsable website without an “Add to Cart” button. I refer to this approach as the “do nothing” plan. Why? Because nobody gets what they want. Your customers don’t get the level of service they need. Your business doesn’t grow and generate ROI. All this time, your sales channels are confused by an investment that benefits no one.
Instead of wasting your eCommerce opportunity, these tested strategies will minimize channel conflict and pave the way towards your business developing a mature eCommerce model for direct and channel-powered selling.
- Compensate Through Revenue Sharing: Give local channels a percentage of the revenue generated from online customers located in the sales partner’s immediate territory.
- Set a Recommended Price for Direct Sales: You can’t control the price point of every sales partner, but you can set a retail benchmark for eCommerce channels. By maintaining a minimum price for the online store, you aren’t undercutting your folks in the field.
- Offer Leads: An online presence inevitably helps to build brand awareness and brand loyalty. This is an excellent opportunity to allow your eCommerce site to play double-duty in the form of transactional purchases and lead generation. Credible referrals can then be shared with the relevant sales partner for further customer relationship building. Just make sure you have a clear way to track and credit those leads.
- Support BOPIS: “Buy online, pick-up in store” (BOPIS) is a widely successful B2C approach, so why not try it for B2B? With increased foot traffic, sales partners have a better chance to engage customers and sell more products to enhance the value of initial purchases.
- Promote Support Services: It’s important to remember that revenue opportunities don’t end with the transaction. Through offering complementary professional services, support, and upgrades, every sales channel can play a significant role in enhancing overall customer experience and retention, while increasing its own cash flow.
Bottom Line: Your Sales Channel Wins in B2B eCommerce
Whenever the eCommerce debate comes up in the boardroom, it’s important to remember whom you are serving. Yes, it’s the customer, but at the same time, you are also creating new sales opportunities for your channel partners.
Typically, salespeople who understand their business, customer, and market don’t like being told how to do their job. However, simple, incremental sales will not help them meet their annual sales goals. It’s the higher margin deals, and the acquisition of newly engaged buyers, that drive success. Investing in B2B eCommerce may be exactly the solution your business needs.