Marketing is key to B2B success

B2B e-commerce is still in its infancy, but it is likely to become huge. If today's experimentation continues at the same rate, this market will continue to grow and change the way business is done.

A key finding from a recent study by Accenture ("Was it an illusion? Putting more B in B2B") is that customer satisfaction with regard to business-to-business is lower than that for business-to-consumer, which is low to begin with.

More than 50 per cent of B2B buyers are not very satisfied with their online experience. Another finding is that a familiar, reputable brand is the single most important buyer preference, followed by service, price and variety.

In their effort to establish a B2B market presence, companies rushed to gain first-mover advantage without truly understanding what drives value in B2B brands. This suggests a blind spot on the part of executives concerning the importance of strategic marketing.

A brand is the sum total of customers' experiences with, and perceptions of, a product or service. Marketing is everything that touches your customer. It is not surprising, then, that it would be a key factor in succeeding in B2B.

By marketing I do not mean advertising, but rather the lost discipline of marketing: asking customers what they want and providing it at a profit.

The 4,000-plus B2B marketplaces and exchanges were among the hardest hit by the recent market meltdown because most could not attract buyers or sellers, having staked their success on securing lots of price-driven transactions - although a deal on price ranks fairly low on the list of what B2B customers value.

Another marketing miss was the "one-size-fits-all" approach. Without a clear understanding of the target customer, this approach was unlikely to satisfy the customers that matter.

The next biggest marketing miss was the assumption that online competition would be mainly about lower prices. Business buyers want the reliability, performance and service of a respected brand - and are willing to pay for them.

Therefore, improving brand or customer service will satisfy more customers than lowering prices will. Even for the most price-sensitive segment of B2B buyers, price only accounts for 12 per cent of measured online needs.

The implications are enormous: price is the single most powerful measure for raising (or lowering!) profit. B2B is still relatively small, largely due to a lack of marketing know-how among those driving the initiative.

This isn't to say that customers do not want to make transactions over the internet. Most B2B buyers want to transact business at some level through this channel - but only 18 per cent of B2B websites offer purchasing capability.

The majority are information-only sites and, sadly, many of these do not provide information that is organised to help customers make purchases.

The message to those struggling with B2B commerce is clear: your value proposition on the web needs to incorporate the right mix of traditional and internet benefits demanded by your customers.

Improving brand reputation presents the single largest opportunity for attracting customers. That is not a problem that advertising will solve, although it could help. Ironically, it is about improving the consistency of your execution in general, be it "e" or not.

Email Stephen F. Dull at stephen.f.dull@accenture.com