A blog series covering where eCommerce platforms are failing B2B businesses.
B2B Commerce Platform Gaps
#2: Discounts, Customer Segments & Pricing
Trying to implement a B2B eCommerce solution using a commerce platform that’s been built to serve B2C or direct-to-consumer is likely to disappoint for many reasons. For the purposes of this article, the second in our series of B2B eCommerce Gaps, we’ll focus on pricing, discounts, and customer segments, how they’ve traditionally worked and why they’re a challenge to many B2B storefronts.
The Customer Buying Journey
As consumers, we’ve been conditioned to think of all the purchasing we do in much the same way. With pricing and discounts, it’s typically as simple as popping a discount code into the appropriate field, discount applied, click purchase, and done. Super simple.
Customers are now transferring those same purchase habits and expectations to their daily routines as B2B buyers. They still expect loyalty-based pricing and discounts specific to their account based on the relationship they’ve built up with sales representatives over time, but also expect the convenience and speed of an online transaction.
Given that traditional B2B sales processes are so different from B2C and historically relied so heavily on sales representatives, trade shows, printed catalogs, and the like to complete a purchase, these complexities result in inconsistent (and disappointing) customer experiences when a digital approach is adopted.
Specifically, with B2B customer pricing and discounts, disconnect often occurs when product pages and carts don’t reflect the personalized experience new and existing customers receive when working directly with a sales rep or account manager. Too often, businesses can’t deliver the same personalized experience and must resort to a compromise by hiding the pricing altogether.
Let’s face it, any business should try to avoid implementing a “Call for Price” button as part of their buying process.
B2B Pricing Challenges
Challenges often arise when B2B organizations attempt to translate live in-person interactions into digital transactions that require more data.
Creating personalized digital transactions requires a closer look at the traditional B2B selling relationship. We’ll cover more about the customer portal experience in a later article, but the purchase experience usually kicks off with the product selection and clicking an “Add to Cart” and right above that button – the price.
For eCommerce platform pricing, discounting and segmentation to match an offline purchase, two things must be true:
- The sales team exists in harmony with the backoffice and eCommerce functionality and each of these channels can make the same types of offers. For example, if the sales team is offering a 10% discount on 10+ items – can the ERP or eCommerce platforms offer that discount as well?
- Each system has access to the same data. For example, all systems should know that a user is assigned to a specific pricing group, have matching product classification and customer order data
Why do plugins and apps struggle?
Business-to-consumer (B2C) focused platforms offer many of the same types of pricing and discount configuration that a B2B organization might require, however, specific use cases within B2B create complexity that doesn’t exist in the B2C world.
Replacing the personal relationship and individualized pricing from traditional B2B selling isn’t easy. Unlike a retail experience, for example, where shoppers expect to pay a fixed price, B2B often has tailored pricing structures specific to each account or contract. So, what tools are required to make it happen? Frequency of purchase, repeat purchasing, segmentation and pricing groups are critical capabilities that can be used in combination to deliver that personalized pricing model to buyers.
So, given those expectations, where are the gaps?
Your data – it’s living in several systems across your business – ERP, accounting, warehouse, inventory and eCommerce to name a few. While each system has a clearly defined role, what isn’t clear is which systems “own” various critical data points. This is where pricing control and consistency becomes a challenge.
With product pricing being managed in external systems and services, the eCommerce platform may not be able to control, set or allow for the management of product pricing. A business can quickly find itself with multiple systems with different pricing set across the catalog. As a result, imagine a hypothetical scenario where a customer asks each of your systems “what’s the price of this item?” and getting back a different answer… not a great way to run a business.
Key pricing consistency capabilities:
- Flexibility to select which internal system will be the system of record for product pricing and management across all sales channels. For example, a legacy ERP may not be able to pull pricing from another system. Less flexible systems often require ownership – An “I’m in charge and that’s final” approach to data management that can’t sync with other services
- When reviewing platforms and services, which ones can support the pricing? What do you do if one system can’t support the other?
- Allow pricing combinations to be used or one system to overrule the other with additional offers or discounts
Here’s a scenario to consider: if the eCommerce platform sells an item at a discounted price with an online-only discount will the backoffice or ERP accept the order?
Volume & Tiered pricing
Business buying means buying in bulk. Distributors, wholesalers, or dealers – each expects that the companies they’re buying from will give better pricing if they buy more.
Creating pricing tiers with fixed static or dynamic pricing drives customers to make more of those bulk purchases and increase items-per-order on each purchase.
Key tiered pricing capabilities:
- Set specific tiers ($x per item when buying more than 50) on a product by product or sku by sku basis based on order item quantity
- Tiered pricing must be able to be configured by site or sales channel. You don’t want to offer tiered pricing where it shouldn’t be available – B2B vs DTC sales
- Global pricing tiers are a good starting point to be able to deliver to customers, but can those tiers be offered to specific customers or customer groups based on business rules or manual assignment?
Company based pricing
Customers who buy as a group means you might not always have the same “user” doing the buying. Giving users the opportunity to view order history, quotes, shopping carts, recurring deliveries as a company while maintaining their own account is critical to the user experience, but it also means that the pricing needs to be consistent for the entire company.
Allowing users to join a single company and access the benefits assigned to that company is critical to building the efficiency of the buying experience for the customer and reduces the new user onboarding process across the entire organization.
Key company-based pricing capabilities:
- A process to allow users to “join” a company group – through unique code, landing page, or search
- Assign customers into companies (or groups) that share pricing across the buying relationship for all or specific sales channels
- Assign pricing set(s) to a single company or multiple companies – reduces the burden of managing each company individually
Dynamic Customer Segments
How do you categorize your customers? Breaking down your customer and account database based on buying behavior, data attributes (location, business type, etc.) and delivering rewards, special pricing, quantity discounts and promotions to those customers can make them feel like they’re getting a personalized buying experience.
Key customer segmentation capabilities:
- Flexible customer group assignments that allow users to manually assign a customer to a group with sync/update happening automatically to other services (eCommerce to ERP, for example)
- Creating and managing customer segments as well as customer assignments can happen in one or multiple services (eCommerce? Backoffice?). Can those segments sync populate all systems?
- Manage multiple sets of customer groups that can overlap with each other. Customers can and should fall into multiple groups based on static (located in Wisconsin, USA) and dynamic data (20+ orders in last 6 months)
- Create and manage business rules that utilize workflows can dynamically move customers into other groups, but also choose when the internal team is notified of those movements – e.g. if a customer has fallen into the “Inactive” list, notify their sales rep
More and more companies are expanding their online selling to include more storefronts. B2B companies looking at connecting directly with direct-to-consumer selling or launching niche B2B selling opportunities are growing rapidly.
Of course, as soon as any B2B company begins to consider additional sales channels, the challenge of controlling and managing pricing across those channels appears.
Key multi-site pricing capabilities:
- Set fixed prices on an individual item/sku basis per site or sales channel. Managed through upload and import, sync with backoffice or manually in the admin
- Key feature, often overlooked, audit review capability to review history of pricing changes for reference
- Keep it simple – straight line discounts or pricing increases based on a formula that works across the business or business line. For example, using a list price or MSRP price as the basic for retail as opposed to a wholesale/dealer price for B2B
Any B2B company that can successfully manage pricing complexities across its sales channels will be rewarded with more efficient ordering and multi-channel customers who are, overall, happier with the buying process.
Customization over compromise.
What’s Missing In B2B eCommerce (Blog Series):
Article #2: Discounts, Customer Segmentation & Pricing
A new blog series about the critical eCommerce capabilities missing in most eCommerce platforms for B2B companies. #1: Quoting & Sales Support
A closer look from the Ultra perspective on what we really mean when we talk about headless commerce and why it may not be right for every company.