How a B2C Mindset Can Dramatically Improve B2B Customer Experience

B2B buying preferences have dramatically shifted towards digitally dominant experiences as Millennials and Gen Z have entered the workforce. However, the B2B world has been slow to adapt even though, as we have pointed out before, older Millennials are over 40 and older Gen-Z are over 25.

Simply put, B2B suppliers still aren't selling in the ways that meet modern customer expectations. People now expect B2B brands to offer the same robust, advanced digital buying experiences found in B2C. However, many B2B companies haven’t gone beyond a basic website where users can find a distributor or request a sales call.

This unwillingness to meet modern buyer preferences puts businesses at risk, especially during times of uncertainty. Customers are becoming ever more selective. Competitors that find new and creative ways to bridge the gap and provide the positive customer experiences buyers want will win through. 

Forwarding-thinking B2B marketers recognise the danger and are embracing the opportunities afforded by digital sales and fulfilment models. Acknowledging the limitations of their existing commercial functions, these brands are exploring alternative business models that better match modern customer preferences. In doing so, they are positioning themselves to succeed in today’s rapidly changing digital commercial landscape.

Creating Partnerships with B2B2C

On the surface, the business-to-business-to-consumer (B2B2C) model looks very similar to a channel partnership. One company creates products or services (the B2B element), and the other business handles distribution and customer interactions (the B2C part). However, a key difference is that it isn’t a one-way relationship. Instead, the two companies work together to provide complementary goods or services to end-consumers.

B2B2C provides two keys elements that help speed up growth and scale for manufacturers and distributors alike: 

1. The partnering companies share data. Producers get valuable end-user insights to help improve the quality of their products/services. Meanwhile, distributors have up-to-date information about relevant inventory from the producer. Data exchange also helps in the development of exclusive service/product bundles.

2. B2B2C relationships mask nothing through white labelling, which helps drive brand recognition for both partners. Consumers know they are buying a service/product made by one brand and delivered through another.

There are several ways a partnership can work, depending on the industries of both businesses.

Volvo is a great example of how manufacturers and distributors can work together to improve CX. Volvo's connected cars help them stay in touch with customers and pass on important information to dealers. For example, they send service reminders to both customers and their local dealer, and the car can even show available slots at the dealer’s repair shop.

There are also B2B2C service relationships where the distributor offers capabilities the producer normally could not provide. For example, how Deliveroo provides online ordering and delivery services for restaurant and grocery partners.

Buy now, pay later (BNPL) services like ClearPay and Klarna are another popular B2B2C partnership type. These services allow consumers to buy goods online or in-store immediately and pay in instalments. Partnering vendors benefit from an improved checkout for their customers, and credit and fraud protection. BNPL providers have proliferated thanks to increased brand awareness from working with popular brands, drawing consumers in to use their service and leaving regulators in the dust.

B2B2C Pros

• Manufacturers and producers can extend their reach without overtaxing their current resources. For example, they can outsource storage and shipping logistics which helps reduce overhead costs.

• Distributors can offer a wider variety of products and services without the investment of designing or creating them, resulting in a wider customer reach.

• Combined data helps improve products and offers a good customer experience, leading to increased sales and brand growth for both parties.

B2B2C Cons

• There can be technical and legal hurdles with data sharing between partners. There are also more stakeholders involved, which can slow the decision-making processes.

• Manufacturers depend on an intermediary to represent them. This can put their brand at risk if the intermediary fails to uphold their end of the agreement.

• Distributors don’t have any inventory of their own, making them vulnerable to breaks in the supply chain/local regulations that limit their services.

Building a Stronger Brand with D2C

In traditional B2B channel sales, suppliers only interact with business buyers and have no relationship with the end consumer. However, this model is being challenged by D2C (direct-to-consumer or DTC), which is quickly becoming essential for consumer brand manufacturers and service providers.

Ongoing digital transformation means B2B brands now have the analytic and logistical capabilities to better control their value chain. Businesses are no longer entirely dependent on distributors, wholesalers, and service providers to sell their products/services.

Connecting directly with end-users can yield more predictable (and profitable) revenue streams. Companies have the user data to create better products and to elevate the customer experience. They can also create more targeted marketing campaigns to build a powerful brand that independent of retailers. 

Professional services firms might think that they’re immune to the type of disruption being created by D2C, but that’s not the case. Lemonade is a great example of how D2C is transforming the insurance industry. It simplifies the insurance process by removing the need for third-party agents. Instead, people can directly manage their policy through the brand’s website/app.

And it's not just customer facing brands that benefit from having a direct connection with consumers. Understanding and influencing end-consumers can help industrial suppliers create a business demand for their products indirectly. Meanwhile, B2B providers can better serve their clients by understanding the client's own customers.

B2B brands that want to adopt a D2C model must be able to provide a B2C-level customer experience.

They need to build online marketing, sales, and customer service plans focused on the consumer market instead of B2B buying teams. They need strong content marketing and product data enrichment to assist consumers in selecting the right product for their needs. Blog posts and social media marketing channels can offer both customer education and market research opportunities.

They also need an e-commerce/digital service platform that integrates with their existing business management software. Finally, brands must have a strong go-to-market strategy to introduce their D2C site to end consumers.

D2C Pros

• Businesses don’t have to rely entirely on intermediary providers, wholesalers or retail stores to represent and sell their products/services to consumers

• Allows B2B companies to have a direct relationship with end-users and collect relevant business and consumer data. Meanwhile, end-users can go straight to the source with questions or problems they encounter using a product or service. 

• Companies manage manufacturing, marketing, selling, and order fulfilment themselves, giving them complete control of their customer experience.

D2C Cons

• It depends on building strong brand recognition among the public. If consumers don’t know who you are, the D2C model won’t do you any good. 

• You must have a robust infrastructure in place to handle all aspects of manufacturing, marketing, sales, and order fulfilment.

• The D2C model is mostly limited to businesses/industries with products or services that can be legally distributed directly to consumers. 

• If you want to adopt a hybrid model, you must carefully balance your D2C operations and your channel partner relationships. With D2C, you’ll essentially become a competitor to your distribution partners, so communication is key. 

Value Creation with B2B Online Marketplaces

The B2B marketplace model creates a centralised business ecosystem allowing suppliers and buyers to effectively and efficiently transact.

Buyers enjoy a simplified purchasing journey with intuitive comparison tools, pricing transparency, and payment system integrations. Procurement teams can easily consolidate their preferred vendor rosters and track ordering and fulfilment history from a single platform.

Meanwhile, suppliers gain access to an extensive distribution channel for their products and other value-added services. Marketplaces also provide an integrated network of partners with whom brands can co-develop solution packages for customers across different industry verticals.

The way a B2B marketplace operates will depend on the industry structure and needs of participants. Some common models include:

• Vertical marketplaces that specialise in a single category of products or a particular industry (e.g. ThomasNet).

• Horizontal marketplaces that sell commodities across a variety of segments or sectors (Amazon Business and Alibaba fall into this category).

• Time-and-materials marketplaces that offer facilities management, freight services, IT support, and other temporary labour (a well-known example is SAP Fieldglass).

• Scope-of-work marketplaces that focus on professional services like marketing, legal, insurance, and other specialised roles (à la Field Engineer).

Rather than relying on a third-party marketplace, some B2B companies are choosing to develop their own platforms. While building an independent marketplace might require more time and money upfront, it can be a valuable long-term investment. Besides collecting fees from participating suppliers, marketplace operators control user data capture, onboarding requirements, and collaboration guidelines. Making their platform a space where other companies come to do business is also great for increasing brand visibility.

Online Marketplace Pros

• B2B online marketplaces provide smaller manufacturers and new businesses with a platform to establish a much larger customer base. They also manage the entire shipping and delivery process, as well as the logistics for returns and exchanges.

• Marketplaces have the technical infrastructure necessary to handle large-scale e-commerce. This is especially beneficial for smaller B2B businesses that don’t have the means to support an independent online store.

• Marketplaces are popular with B2B buyers as they offer a convenient way to find and compare products and vendors on a single site.

Online Marketplace Cons

• Selling on a marketplace means lower vendor margins and less (or no) access to user behaviour data.

• The marketplace experience focuses customer attention on products instead of vendors. They are less helpful for building brand image unless you’re the marketplace itself (in which case it’s fantastic for branding).

• Marketplace operators must have the advanced IT, analytics, and logistics capabilities necessary to handle large-scale e-commerce. They must also provide a great customer experience, exceeding what B2B buyers get from dealing with individual vendors.

Innovative B2B Sales & Marketing Solutions

In ‘How to Future-Proof Your B2B Marketing Strategy’ we discussed the importance of value creation (through platforms), value capture (through presence), and value realisation (through productivity). Investing in alternative e-commerce models can achieve all three.

It’s not just about developing digital-first sales models. It’s also about using automated and AI-powered solutions to improve business operations, delivery, and customer experience. Digital transformation offers the opportunity for manufacturers and professionals to provide a higher level of service to clients and end-consumers.

In our article on innovation in professional services, we also looked at the example of a growing number of law firms who use digital service platforms to automate basic legal tasks. Their customers can complete services such as NDAs, service contracts, and will writing without ever needing to meet with a solicitor, freeing up the firm's time to address more complex needs. Firms like Allen & Overy are disrupting the industry even more by creating digital solutions for larger, complex legal matters.

Despite what many futurists may claim, traditional B2B sales and delivery models are not, in fact, dead. Rather, they are no longer the ONLY option. Some buyers prefer meeting with sales reps for a facilitated buying experience, while others want to go the full self-service route. Some customers like the convenience offered by marketplaces, while others want to cut out the intermediary and buy direct.

The point is B2B brands should use a variety of sales and fulfilment models to help support an omnichannel buying experience. Rather than forcing customers into interacting with sales reps, let them purchase goods and services however they prefer. Explore the exciting commercial opportunities opened up by technical innovation while still honouring and perfecting legacy routes to market.

The rise of digital-first B2B business models requires a fresh approach towards B2B marketing and sales strategy. One that combines automation technology and human interaction to create a flexible, omnichannel experience. Reach out to 1827 Marketing and learn how we can support a modern, successful marketing strategy for your business.