May 17, 2020

B2B can learn from B2C, say Zilliant and UnleashWD

Supply Chain
Freddie Pierce
4 min
B2B could take a leaf out of B2C's book
Written by Javier Aldrete, (pictured, right)SeniorDirector of Product Management at Zilliant, and Dirk Beveridge, (pictured below, right) Founder of Un...

Written by Javier Aldrete, (pictured, right) Senior Director of Product Management at Zilliant, and Dirk Beveridge, (pictured below, right) Founder of UnleashWD

Javier Aldrete (Zilliant).JPG

On the surface, it seems as if B2C and B2B operate from completely separate playbooks. Differences in business practices and customer profiles abound. It’s easy to dismiss business best practices in B2C as irrelevant to the reality of B2B. However, if we peek under the surface, it becomes quickly apparent that there’s quite a lot to be learned from consumer businesses. There’s even opportunity to significantly improve customer relationships in B2B by tearing a page from the playbooks of B2C. Several of the tenants of customer relationship management and customer satisfaction from the B2C world also hold true for B2B.

Zilliant and UnleashWD recently partnered to provide insights on how B2B can tear a page from the B2C playbook:

1.       Cross-sell based on previous purchases. Most consumer e-commerce websites, specifically, use statistical modeling techniques and algorithms to predict what customers should buy based on their past purchase histories. Such websites explicitly provide customer suggestions on what other products they might be interested in purchasing. B2B companies, particularly suppliers and distributors, also have customers with similar buying patterns and can use the same approach to make product suggestions to repeat customers. This has proven to be a successful approach whether B2B companies are selling through the web or more traditional means. Ultimately, the underlying method for predicting what a customer is likely to purchase based on previous purchases is very similar.

2.       Retain existing customers. It’s significantly more costly to acquire new customers than it is to retain current customers. When B2B companies can identify the early signs of customer defection, they have an opportunity to reverse that trend. However, that’s easier said than done for suppliers and distributors that have thousands of customers and tens of thousands of products. To keep up with top customers, distributors must become the “unofficial employees” for their customers. But with so many customers, that’s only feasible for the top 10 to 20 percent of accounts.

In the B2C world where customers spend in recurring amounts or have ongoing subscriptions, such as gym memberships, companies often rely on technology to provide an early warning system when customers begin to decrease their usage of a product, as in not going to the gym. That often triggers a special offer and an effort to retain those customers, but B2B companies aren’t presented with such opportunities. By leveraging data-driven, predictive analytics, B2B companies can automatically identify customer defection while notifying the appropriate sales rep without a manual process or intervention.

3.       Don’t compete on price alone. Many suppliers and distributors must compete with commodities and consider price as the only factor to win the deal. In reality, there are few, if any, true commodities in this world.

Dirk Beveridge (UnleashWD).JPG

In fact, there are a variety of factors that can determine what a customer is really willing to pay. Some of these factors may be product-related, but many factors have to do with the customer’s situation, a sales rep’s unique relationship and services, and the circumstances surrounding the specific deal at-hand.

B2C companies have long figured out how to differentiate supposed commodity products. Starbucks is a great example. The coffee market was largely commoditized, yet Starbucks found a way to differentiate its offering through a unique customer experience, and in doing so, can charge a premium for its products. Suppliers and distributors can also find ways to differentiate the customer experience by understanding the factors beyond price that affect customer buying behavior, such as the sense of urgency, distribution channel and special circumstances required. By understanding how these factors affect willingness-to-pay, B2B companies can differentiate their prices from so-called commodity prices.

Ultimately, by mirroring B2C best practices, B2B companies can begin to overcome the massive complexity in their business and build stronger relationships with their customers. B2B companies can enable data-driven pricing and sales decisions at the front line to predict what customers are likely to purchase, identify when customers are defecting and understand the factors that affect customer buying behaviour.

Javier Aldrete, senior director of product management at Zilliant, has more than 16 years of experience applying advanced business intelligence and predictive analytics to solve business problems in multiple industries.

Dirk Beveridge, founder of UnleashWD, is an expert in how wholesale distributors and manufacturers increase market share through examining and improving their relationship with customers.

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Jun 10, 2021

Will Public Procurement Budgets Increase in 2021?

3 min
Often overlooked, government procurement professionals will play a critical role in helping communities, and local businesses recover from the pandemic

Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less. 

According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”. 

Small, Local Suppliers Take Charge

Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals. 

These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects. 

Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity. 

Post-Pandemic Funding Swells Procurement Budgets 

And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns. 

Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.

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