Competing in an Omnichannel World
Buyers are mobile, weaving in and out of different sales channels and it’s up to you to deliver the right experiences that makes them want to engage and keep engaging with your brand. But that’s not easy. You have to manage different products sets, different channels, different price strategies, and more often than not, you might find yourself trying to keep up with the savvy buyers of today. You are not alone. In this coffee chat we sit down with John Bruno, VP of Commerce Strategy at PROS to discuss how you can successfully compete in an omnichannel world.
Highlights
[00:30]: What does omnichannel mean and how do you define it?
[2:19]: How do organizations manage multiple channels with today’s buyer?
[6:06]: Many businesses are looking to go direct to consumer. How will that engagement differ from engagements with another B2B organizations?
[9:16]: Many B2B businesses are having to accelerate their eCommerce strategies quickly. What do they need to think about as they develop this new digital channel?
[13:10]: How will AI impact the buyer journey as they go through an eCommerce site?
Full Transcript
Loretta Faluade: Welcome to Coffee Chats with the PROS. My name is Loretta Faluade and I'm a solutions strategy director here at PROS, and I'm so excited because I've got John Bruno, who is the VP of commerce strategy at PROS. Welcome, John....
John Bruno: Thanks for having me. I'm excited.
Loretta Faluade:Today we want to have a really interesting conversation all around how organizations can compete in an omni-channel world. Before we kind of jump into the guts of the conversation, I want to take some time to kind of define what omni-channel means, because it can mean a lot of different things, and you hear the term being thrown around by so many different vendors and [inaudible 00:00:38] organization. What does omni-channel really mean to you?
John Bruno: Well, I'm glad this is the starting point. It's a term that means everything and nothing all at the same time. What this means is specifically for B2B organizations is, as your dealing with, and working with a new and evolving buyer, their preferences are changing and they have different problems that they need to solve and different ways about solving those different problems. And so, what this means is, it's actually a question. Are you everywhere that your buyers want to be and want to interact? I mean, if you think about it from the root word, omni, you have a Latin meaning all. Do you need to be in all channels? No. You just need to be in all channels that your buyers care about. And so, historically speaking, many businesses have had their direct sales force, many businesses have scaled selling through an indirect channel, whether it's a partner, a reseller distributor. But increasingly as the world's move more and more digital, and as you know, in COVID, we are spending more and more times in front of our computer screens. More than I think certainly, certainly any of us had ever thought before, so now more buyers are interacting more through self service channels. Are you relevant for your audience and every channel that they're going to be interacting through?
Loretta Faluade: Yeah. I love how you phrase that and I think I'm going to steal that. Omni-channel, basically, you don't have to be in all the different channels, buy are you in the channels where your buyers actually are? And if you think about how traditional B2B companies have engaged over the years with having direct sales team, or maybe you having resellers, and now they're looking to stand up some of these eCommerce channels, how do they reconcile? How do they reconcile both? If their customers are going to them, but they're now being forced to digital channels, how do they think about managing these different channels?
John Bruno: Yeah. I think what it boils down to is the key experiences your B2B customers want. A lot of these customers have been long time customers. They're not just someone who showed up and knocked on your door saying, "I want to buy product or widget X." They've been around for awhile. There's established relationships that they expect you to honor. And where most B2B organizations start to fall down is, as they think about where they're interacting with their buyers, it tends to be quite different depending on what channel they're going through. And if I can poke a little bit of fun, I always try to equate it to the telecom industry. As a B2C consumer, you think about going online and trying to figure out, well, what cable package do I want? What internet speeds do I want? Do I want a home line? I guess if anyone still uses home landlines anymore. But what's really interesting is when you do that online, you get a particular offer. And if you choose not to accept that offer, you might call back and ask some more questions. And if you choose not to accept that, you probably are going to get a mailer in your mailbox. And what's interesting about that dynamic is every offer, every package and every set of prices is entirely different. And so, businesses start competing with themselves. It feels inconsistent for the buyer, and that's actually quite similar to what's happening in a lot of these B2B scenarios, where maybe I have mine negotiated pricing that I've developed over years of being a loyal customer, and that's what I get when I work with a sales person that I normally work with. But when I go online, I'm seeing something that's entirely different. And in some cases that is a bad for the buyer, meaning, why can't I just do this thing that I'm so used to doing in this self service channel? Sometimes it's good for the buyer, but bad for the business. Maybe you're giving them a better price than the other channel, and now you're competing with yourself unnecessarily. And so, really it's about taking the core of that relationship and delivering the same level of service, the same level of guidance and consultation, but honoring the relationship that's been developed over that period of time.
Loretta Faluade: Yeah, and you bring up a good point. And one of the things that I know I've experienced, and this was actually, I'm not going to say the company name, but I bought an electronic equipment, and when I went into the store, the pricing in the store was actually higher than the price that they had online. And while, they had to reconcile it, and sometimes you get into those scenarios where, like you said, where you're competing with yourself. Part of the challenge, if you cannot reconcile some of the prices and kind of harmonize your prices across all of the different channels, it introduces distressed, where it's like, I'm going to question you, and I'm going to do my due diligence because I've now seen two different prices, so I'm not sure which one ... I'm not sure what you're going to give me. And so, I'm always going to check the different channels before I actually make a purchase, and that elongates some of the sales cycle, the traditional sale cycles. There is that challenge that organizations have to kind of grapple with. But then the other thing that you and I have had sometimes talked about is, organizations that are looking to go direct to consumers. What would you say about how they manage those experiences versus the traditional B2B engagements that they've typically had?
John Bruno: Yeah, what I would say is, every business is a little bit different. And I think when we talk about B2B and B2C converging, many people talk about it coming from one direction, which is B2B organizations. And they're looking to go more direct. First of all, that is unequivocally happening. But what's also interesting is that you also have B2C organizations that are moving towards more B2B. Think of apparel manufacturers that are typically B2C, may have their own retail stores, but if they're providing their products so that someone could put their own branding on and sell them to their customers, that's very much a B2B interaction. The worlds are converging and they're converging from both directions. And so, really look at where the core of your business is. For most B2B organizations, the direct to consumer opportunity is huge. Buyers want to interact more with manufacturers. You talked about trust a minute ago. Manufacturers offer the best quality, data and information to help boost the confidence of a buyer, so it's natural that B2C consumers want to buy [inaudible 00:07:36] manufacturer, and it's natural that a manufacturer wants to sell to those consumers. They want to know who their customers are, and that often gets lost in an indirect channel. But if you are, let's say a brand manufacturer, that's predominantly B2B looking at the direct to consumer opportunity in front of you, you still have to realize that the vast majority of your business comes through your B2B channels. And so, really it's about putting that portion of your customer base on a pedestal, making sure that everything that's made you successful does not get artificially deteriorated, meaning you might have contract pricing for a B2B customer. The last thing that you would ever want to have happen is for a consumer to get a better deal and some of your most loyal B2B customers. And so, sometimes that means, maybe you don't roll out that direct to consumer promotion in the way that you wanted to. Or maybe you do, but on a certain assortment of products so that you're not conflicting with what you've already set up for a structure with your B2B buyers. And in some cases it might be actually reflecting that negotiated price that you have with your B2B buyers, and you might want to kick that down for the period of time where that direct to consumer promotion is available. There's a lot of nuances here, but it still shocks me, for all the craziness that's happened in 2020, Elon Musk can send a rocket into space and have it land on its own, and to barge in the ocean, yet a lot of businesses struggle to make sure they're showing the right products and the right prices to their customers.
Loretta Faluade: Yeah. You actually just brought up a good point because one of the things as you were talking, is if you think about how B2C has been, especially when it comes to e-commerce it's pretty far ahead, B2B traditional engagements. And you talk about some of the challenges in just showing a price, or showing the right products in an eCommerce space for a B2B organizations. But they are being forced to stand up these e-commerce presence, the eCommerce sites rapidly, what are some key things do they need to be thinking about when they look at their eCommerce strategy? Because their customers are going to want to have an experience, or just reflective of what their B2C experience is. What advice, or what things should they be thinking about when it comes to eCommerce strategy?
John Bruno: Yeah. I always like to think about these types of things in terms of human behavior. As a B2C buyer, I'm buying something that is for my personal use, occasionally it might be a gift. But I've got a pretty narrow scope as to what it is that I'm looking to buy, and for what purpose it is. Now in a B2B capacity, all of those elements start to shift. No longer buying necessarily for my personal needs. I could be buying for a particular business outcome that I'm trying to achieve in my business. If I'm selling through, or taking your product and adding it into a discreet, or assembled product at the end of the day, I need to know how it's going to function as part of that greater solution. And so, there's a lot more education that typically happens in B2B. It's one thing for me to be a B2C shopper and say, "I really like that pair of pants and I know what my pants size is." And I select that, add it to a cart, and checkout. In B2B, I need to understand is the product that I'm looking at going to fulfill the business need that I have, or the business need of a particular user, potentially in my organization, downstream in my manufacturing chain, or even a pass through customer that I might have. Is that going to be sufficient for them? And so, where a normal B2C shopping experience, they typically look pretty similar. Go to a site, standard top level navigation, select your category, maybe do some cool searching, what's facets. It's all pretty similar. In B2B, that kind of user experience doesn't necessarily get you to the appropriate product, service, offering, or package. And so, it's about taking the same kinds of processes that have been successful, the same kind of value driver questions that a sales person might ask their customer. How do you emulate that dialogue in a way that a B2B shopper can interact from a self service standpoint and still get those questions answered? Are you asking the right things that are going to lead the buyer to the optimal solution? Because at the end of the day, it's about one thing, and one thing pretty simply. You have a B2B buyer and they have their intent. They want to do something and eventually they'll do it. Are you good at shrinking the amount of time between their intent and their action? And if you're asking the right questions, guiding them to the right product, services, and offering the most relevant pricing and packages for that, you're going to have a real serious competitive advantage over the market.
Loretta Faluade: I love how you said, you basically have, they're looking for it, and their intent. And the purchasing is, it's looking about how you're shrinking the amount of time in getting them to actually making the purchase. One of the last question I'll ask, I'll throw you a little bit of a curve ball, because there's intent data. And there's a lot of talk about AI. How do you see AI really impacting the journey that a buyer, a potential buyer takes on the eCommerce site?
John Bruno: Yeah, well, that's the really awesome part about B2B. When you look at the B2C world, I might buy from a particular brand or retailer every so often. They're not building a whole world of data around the things that I'm doing. Yes, they're going to look at my click streams. They're going to look at the products that I've looked at, the things that I've added to wish list, and what I've actually purchased, and try to map me to other people. But what's great about B2B is there's so much more data and data about things that are most important. You know who the customer is, what that account is, what kind of industry and what kinds of applications they're looking to purchase products for, then you have the product data. How well aligned is a particular product to solving a particular problems? And lastly, the transaction data, and that's the really cool part about B2B, because there's so much of it. The relationships are longstanding, they're loyal, they're repeat. People come back and back and back. And so, the wealth of data that businesses have on the B2B side means that there's actually greater opportunity to take advantage of AI and B2B. If you're doing things like identifying similar customers in what they've purchased, well, they're similar because they're solving for similar problems, meaning the recommendations you have for the products that you might offer or suggest are going to be more relevant. But what's really interesting is looking at things like frequency. What is your transaction patterns? Are you buying the same things over and over again? Is that frequency increasing? Is it decreasing? Is the product makeup changing? All of those are signals that can help inform you when you might want to augment that buyer experience. If you're seeing frequency go down, or you're seeing the product makeup of those purchases really become sporadic, even if that customer prefers to interact via self service, that might tip off a few clues where you might want to actually inject a little bit of human touch, inject some sales person interaction, to make sure that that customer is satisfied, that they're not at risk of churn, that they're not evaluating competitor solutions. And so, the world of AI, specifically for B2B commerce is huge, and if I can, I'll go back to one other thing we talked about on the B2C side. We talked about the disparity of experiences, and what shown, and making sure that you don't want to offer a first time B2C customer a better deal than your longtime B2B customers. Those problems materialize every single day. And I think one of the things that people get wrong when I think about AI is, it's all about the recommendation. And intelligent recommendations are great, don't get me wrong, but it's the automation. I think we can all identify that these problems are going to materialize, but do we have the scale to solve each and every single one of them? And I think if we're being honest with ourselves, the answer there is, it's a hard note. We don't have the scale, and where we need to scale is leveraging technology and automation, artificial intelligence, to make sure that we're not making any of those egregious errors around the customer experience that could negatively impact my most loyal B2B customers.
Loretta Faluade: Yeah. Well, thank you so much, John. This was such a great conversation around competing in an omni-channel world. Thank you guys for joining us for this episode of Coffee Chats with the PROS. Just wanted to give you guys a quick update. John and I are going to be joined with by Joe Cicman of Forrester, and also Peter Sheldon of Adobe, and we're going to be continuing the conversation around the omni-channel buyer, and how you can really accelerate your B2B eCommerce channel as you focus on that buyer. It's going to be on September the 22nd at 11:00 AM. We hope to see you there. Until next time, thanks so much again, John, and we hope you guys have a fantastic rest of your day.