Bringing the B2B Channel Sales Model Into the 21st Century

b2b channel sales model

Channel

You decide to take a camping trip with some friends and realize your tent has a hole in the seam. So you jump online, spend a few minutes searching and reading reviews, pick a good option in your price range, and place an order. A few days later, the new tent is on your doorstep and you're on your way. This is retail ecommerce at its best: quick, easy, customer-friendly.

It is common knowledge that the way that consumers make purchases is changing, and has been changing for some time. Ecommerce continues to show year-over-year growth, accounting for 10% of all U.S. retail sales in 2016 (when factoring out items not normally bought online, such as fuel and cars), according to the U.S. Census Bureau.

But try asking a distributor or a reseller in a channel sales organization about their B2B purchasing process and you'll likely launch a 3-hour explanation. Most B2B organizations are years behind B2C when it comes to incorporating technology into the purchasing process. Traditional channel sales models persist across most B2B organizations, with inefficiencies built in throughout the channel. This is especially notable within the renewals business, when even low-value contracts can require two weeks or more of legwork to settle on a final acceptable renewal quote for the end user. Inefficiencies in the channel sales renewals process include:

  • Renewal quote review and revision process conducted via email between vendor, distributor, reseller and end customer
  • Manual processes to check, update, or confirm product SKUs
  • Manual processes to check, update, or confirm pricing
  • Manual updates to quote line items, which can number in the tens or hundreds

Surprisingly, B2B ecommerce is already twice as large as B2C ecommerce, and Forrester Research expects B2B ecommerce to exceed $1.1 trillion and comprise 12 percent of all U.S. B2B sales by 2020. However, the majority of those B2B ecommerce sales are limited to petroleum and pharmaceuticals. According to a 2015 study by Forrester Research, "B2B sellers are not prepared to deliver a seamless omni-channel experience… Creating a personalized and seamless experience involves integrating myriad people, processes, technology, and data to enable channels to share info in real time; B2B sellers just aren't there yet."

How Can More B2B Channel Sales Organizations Implement Ecommerce Models for Renewals?

When a vendor sends a batch of renewal quotes or opportunities to a distributor, the lack of an efficient system connecting the channel means that the distributor needs significant resources to process those opportunities. And from the reseller's perspective as they look back up the channel, they are working with five or more distributors and 15-20 vendors. By the time renewal opportunities make it down to the reseller, the time and effort needed to check pricing and product SKUs across 20 or more pricing books and product catalogs, coordinate reviews and changes with the end user, and run quote revisions back up and down the channel results in low closing percentages on those renewals and poor customer service.

The people who work for the distributor and the resellers – and the end customers – are also retail consumers. They are used to making quick purchases from their phones while they ride the train to the office, or from their iPad on the couch. Their expectations are for quick, responsive, and accurate turnaround on their purchase decisions. Yet at work, the experience within the B2B sales channel doesn't currently meet those expectations.

The reseller sits in front of the end user, and they manage the majority of the customer relationship. Their role is critical, and the easier and more satisfying vendors can make the renewals process for resellers, the more likely they are to prioritize those vendor relationships.

To simplify and speed up the renewals quoting process, a purpose-built software solution can enable self-service quote revisions and approvals for resellers and distributors. The result is a significantly more efficient process that reduces the quoting process from two or more weeks to literally seconds and dramatically increases the percentage of renewals sales closed. This creates incentives for resellers and distributors to prioritize the vendor that provides this more streamlined process, and delivers a more positive experience for the end user.

While the transition from manual multi-channel sales to omni-channel renewals will develop over the coming years and will represent a macro change in how the B2B world conducts sales and purchasing, the next step is an important one: to integrate automation technology into the sales channel.

Learn more about the benefits of renewal automation with a case study about how Fujitsu – one of the world's largest IT companies – consistently achieves 90%+ under-contract and monthly renewal rates.

 

Secure Your Annual Renewals

Back to Blog

Subscribe to our blog

Sign up to receive our monthly blog and other useful and relevant information. We promise not to email you too much!