Just as it was for rappers Eric B and Rakim, getting paid in full is vitally important to any successful business.
So much innovation has come from that basic need of acquiring payment for goods or services rendered, whether it was the invention of paper money in 7th century China or the credit card in 1950s America. The same is true today for business-to-business (B2B) eCommerce and in fact if anything, innovation has sped up in the last 18 months, courtesy of the Covid-19 pandemic.
When the pandemic made in-person B2B transactions impossible across much of the world in 2020, buyers and sellers moved their interactions into the digital world, perhaps reluctantly at first. However, McKinsey researchers have found that “only about 20 percent of B2B buyers say they hope to return to in-person sales.” In addition, Salesforce research has indicated that B2B buyers want “empathetic, personalized, and digital-first engagement” when making B2B purchases, just as they do when shopping in their personal lives.
All this points to the growing need to offer B2B buyers similar flexible and simple payment processes available to business-to-consumer (B2C) customers, something which has traditionally been difficult to provide due to the complexity of many B2B purchases. The question is, just how do you give these customers what they want?
First things first, it’s helpful to look at the differences between B2B and B2C payments and from that, we can glean a few insights into how some characteristics of B2C payments can be used to improve B2B payments.
The biggest and most important difference is the person actually doing the purchase. With a B2C payment, the person buying the product is the one who will use it, either themselves or as a gift for someone else. However, with B2B purchases, the buyer putting the order in may never even touch what they’ve ordered. For example, someone who works in purchasing for a car company may sign deals for parts worth millions of dollars, but they won’t be responsible for actually installing them to make a finished car. This makes the B2B purchase process more complex, as the needs of a myriad number of people and departments have to be factored in when making a purchase.
Some B2B payments can be as complex as assembling a car.
Another key difference is what a B2B purchase is being used for. When a B2C buyer purchases a laptop, it’s for them to use, but when a B2B buyer places an order for laptop screens, it’s so they can be assembled into complete laptops and then sold to consumers. So the timing of delivery, accurate product specifications, and many other factors come into play, whereas the consumer’s needs are much easier to predict.
Finally, the actual process of making the payment is much more complex in B2B purchases. Will the buyer use a credit card, check or trade credit? Does the seller accept the payment method the buyer wants to use? How many people in the company need to sign off on invoices and purchase orders? For a consumer, the calculus is simple, not so for the B2B buyer.
So what can B2B eCommerce sellers take away from these differences? First, they show the importance of knowing who you’re selling to. If customer data is how B2C sellers better understand their customers and provide a personalized experience, then B2B sellers can do the same, taking care of the first two differences mentioned above. Finally, B2B sellers could learn from how easy it is to make a B2C purchase often with just a single click. Streamlining the complex payment process would go a long way to pleasing B2B buyers.
The most-cited example of embedded payments is one we should all be familiar with: ride-sharing apps. Whether you use Grab, GoJek, or Uber, you can link a credit or debit card to your account on these apps and when you book a ride or order food, you won’t have to do anything to pay for it. The entire payment process is embedded in the app, making it a smooth and frictionless experience. Effectively, Uber is offering financial services to the customer and the driver, acting almost like a bank.
So how can this work for B2B payments? Essentially, you can offer business buyers a pre-approved finance offer so they can make the purchase immediately, instead of having to through the lengthy process of offering trade credit, a purchase order, or another traditional form of B2B purchase. This method has several advantages, including increased customer loyalty due to the painless purchase process. Of course, you can’t just offer a one-click embedded payment to anyone without having some history or knowledge about them, so an onboarding process is typically required.
Embedded payments are crucial to this Uber Eats delivery driver's job.
US presidential hopeful Mitt Romney once infamously said “corporations are people” and while he wasn’t 100% right, B2B buyers are definitely people. As mentioned above, B2B buyers want the same personalized experience they get when they browse Amazon or Netflix in their personal lives, except they want it for buying things like industrial fridges and enterprise-level software.
B2C eCommerce sites offer a personalized experience by collecting and analyzing customer data to deliver customized recommendations, and B2B sites can do the same thing. As independent consultant Mark Baartse put it on the first edition of the Commerce Talk with SmartOSC podcast:
“Often the best personalization can be things you don't notice. I was chatting with the CMO of a large online lifestyle/fashion retailer and they were saying discovery is their biggest challenge. If you've got 50,000 items, how do you help people discover the right one? A lot of that is a personalization challenge.”
The same rings true for a B2B business and perhaps even more so when you consider the myriad options and specifications that make B2B buying more complex.
Our final tip to optimize your B2B buying experience is offering a subscription service. No, this doesn’t mean you have to start your paper round again, instead, you can make life easier for repeat customers by giving them the chance to set up a subscription.
This will help them by making the ordering process easier (even automated) and allow them to plan ahead better, while you will increase their loyalty and also have the benefit of improve forecasting.