Monday, February 29, 2016

Early Indications February 2016: B2B e-Commerce update

While there has been substantial attention paid to consumer e-commerce (Black Friday numbers, for example), the state of both practice and understanding for online business-to-business commerce is less developed. There are some good reasons for this: B2B prices are often more complex than merely buttons in a shopping cart application, sales representatives still play a role in education and facilitation, and hybrids of call center, online, in-person, and even fax orders are hard to disentangle. For all of these obstacles, however, fundamental questions remain regarding for B2B e-commerce.

A current study attempts to answer some of these questions. Beginning with 100 sites and expanding to 250 later this year, I am collecting basic statistics for web/mobile presences. Preliminary results are in, with the caveat that the short list does not allow industry-level analysis given insufficient sample sizes. 16 industries are included, which means there are some apples (Deloitte) to oranges (Bobcat) to grapes (Dolby) comparisons implicit in the results.

Just glancing at the front pages of these sites, it’s apparent that the customer is not always the primary audience: some sites clearly addressed investors most prominently, while in other cases, recruiting appeared to be a higher priority. My colleague Ralph Oliva asked how often a customer value proposition is evident, and on this admittedly subjective yardstick, only 40% of sites successfully articulated why someone should buy from the company. Finally, commerce was rarely an option, outside the firewall: site logins were common, and I obviously could not see order, tracking, or content registration functionality behind the curtain. The one exception to the lack of e-commerce on B2B sites was branded merchandise: hats, sweatshirts, and jackets, along with die-cast model tractors and such, were widely available.

Social media activity was common: 75 sites linked to Twitter, and 93% of those feeds were current. Oracle displayed a staggering 70 distinct Twitter presences; I did not attempt to analyze the content on each of these relative to the others. Facebook and Twitter often featured identical content, the differences in audience notwithstanding. LinkedIn was also commonly employed, whether for sales or recruiting I did not analyze.

Especially as audiences use mobile devices for more of their access, many sites appear to be outdated. One company had a page copyrighted 1999, with the “Download Internet Explorer” logo still live. PDF product catalogs (sometimes separated into small page groupings, but often a massive single download) were common; web-native and mobile-native catalogs were the decided exception. Data sheets for chemical exposure and other risks were frequently available for download; this seems to be particularly low-hanging fruit to pick. Only 65 of the 100 sites were mobile-friendly, while only 12 offered smartphone apps, some of which were extremely well executed.

In sum, innovation was rare, basic execution (such as site loading time) was often uneven, and navigation often confused rather than enlightened. The good news is that there is so much upside, at so little cost. The bad news is needing to know where to start. When asked to summarize the top areas of opportunity, I can offer 3 Cs.

Many B2B purchases are complex, such as semiconductors, medical devices, or industrial adhesives for special purposes. In such instances of considered purchases, companies that better inform the customer will be at an advantage. I observed wide variation in the richness and depth of documentation; “contact your representative” was unfortunately the default solution on a large number of sites. The often-absent customer value proposition and/or branding can be considered as another content area.

Opportunities to improve this state of affairs abound. Only 21% of sites sampled offered a corporate blog, for example, a channel that interfaces nicely with social media, with trade shows, and with formal content such as white papers or customer case studies. An even richer opportunity lies with the use of online video. While 85% of sites offered some form of video, gauzy corporate overviews were often the first option. In contract, the really effective uses of video were rare: points of view, such as Corning’s “A Day Made of Glass” (with 25 million YouTube views); precise training and instruction (look at Yaskawa); and head-to-head product comparison (Bobcat stands out here), to name only three. Timken got almost 500,000 views for an instructional video about automobile wheel bearings. Haas Automation has a fine video library in support of their machine tools and associated processes. These are the exceptional few; most companies have substantial room for improvement, at low cost and free distribution (compared to the days of pressing DVDs). Social media, cheap in direct expense, does require dedicated headcount, but most companies in the sample had room for improvement in richness, relevance, and engagement.

While in some cases it makes sense to talk to a live salesperson or technician, there are still many opportunities to provide detailed configuration information and perhaps pricing. Such tools were used effectively at Texas Instruments, MRC Global (in an app), Kennametal, and NXP. There’s no reason they couldn’t be used at more businesses. Some configurators are deployed as lead generation tools rather than as customer information repositories: after doing all the work to select and option a Bobcat tractor, for instance, I had to contact a dealer for the actual price.

*Customer contact
The final C provided many examples of good, bad, and ugly options. A simple example lies with e-mail. According to the Direct Marketing Association, commercial opt-in e-mail generated $36.70 of sales per $1 of investment in 2014; it was the ROI champ, far outpacing Internet search (about $22.00), direct mail catalogs ($7.27), and internet display ads ($19.21). How many sites asked for my e-mail address to send me newsletters, product updates, point of view pieces, or other messages? Only 40 of 100. (Similarly, only 40 of 100 connected trade show information to the online presence.)

Contact information was often presented from the inside out: here’s how we are organized (by geographies, by industries, by dealerships, etc) and it’s up to you the customer to figure us out. A smaller number of sites organized contact by customer tasks: “How can we help you?” is a user-friendly way of organizing different product lines, industry solutions, or support functions from the outside in. These rubrics were, unfortunately, in the minority. Many sites offered multiple navigational paths, often on the same page (which can be good practice): Oracle’s pull-down menus were quite complicated and incredibly information-dense, but seemed to get the job done; Oracle’s direct competitor SAP opted for a very different, leaner user experience model. Simplest of all in this industry was Salesforce.

The other number that jumped out with regard to contact concerned live chat. With millennials often eschewing the telephone as a voice tool, “talk to a rep” often sounds unappealing, and “e-mail us for a quote” may take too long. Given these demographic trends, along with the reality that B2B customer support often occurs on customer premises or on noisy shop floors where voice communication is distracting or impossible, it was surprising to see only 13 of 100 sites offer a chat function.

There were many other surprises (such as how often basic execution failed: broken links, outdated posts, and improper server configurations were not uncommon), and the larger data set will deliver further insights. Some of my potential research questions concern proximity to B2B/C sites, especially Amazon and eBay: are companies that overlap these channels more likely to adopt similar site functionality, or should industrial distributors seek to look as little like Amazon as possible? (I saw both approaches in the sample.) Further work also needs to be done to compare like companies or divisions: how can the B2B universe best be segmented so that insights can cross domains at the same time that differences (in purchase frequency, in service/product hybridization, or in end use of the product) are recognized? Finally, getting insight into what’s behind the firewall would be revealing if it is feasible. Until then, I hope these preliminary results offer food for thought and I will be happy to share the entire presentation of findings upon request.