In this year’s B2B study, Scandinavian B2B Commerce 2020, we take a closer look at the driving forces that push Scandinavian B2B companies to make the leap into digital sales. There are a variety of reasons for the move towards increased digital sales, but our study shows that some reasons are more common than others. We will unpack the results of the study here and consider what might be behind them.
Simplified administration ranks as the top motivator
The results of the study clearly show that the end result of a company’s digital sales efforts go hand in hand with expectations, at almost all levels. But what are the market forces that are steering us towards an e-commerce segment based more and more on digital solutions? And why is this the case?
In our study, both B2B companies planning to digitize their sales (64%) and those already engaged in digital sales (61%) report that the primary motivator is a desire to ease their administrative burden and/or increase sales efficiency. The fact that a company may place a greater focus on reducing internal costs rather than, for example, increased sales, may seem a bit counterintuitive. But when we look more closely at the way B2B companies function and operate, this prioritization seems more logical.
In a B2B company, internal administrative processes are often more complex than they are in a B2C company. Therefore, any inefficiencies in internal processes put a strain on resources and drive costs. Improvements to these processes can save a company a lot of time and money, which can have a significant impact on a company's bottom line.
Higher level of service to meet the expectations of today’s customers
The second biggest motivator among respondents already engaged in digital sales (51%) and those planning to initiate digital sales (54%) is a desire to increase the level of service.
Compared to B2C sales, B2B sales cycles are long and order values are higher. Closing a deal is therefore rarely a simple matter of moving from one sales order to the next. It is about building trust and long-lasting relationships that grow over time. Therefore, a strong focus on the customer and a high level of service are essential to building successful relationships.
The digital transformation and all the benefits it brings has found its way into all aspects of our private lives and working lives. We should expect that clients have the same expectations of digital solutions as they do for traditional solutions. Therefore, a company’s established high level of service needs to find a home in a digital outlet. Digital sales offer an effective solution by improving accessibility and providing round-the-clock access to customers.
Focus on the existing customer base
Finally, the study shows us that B2B companies tend to focus more on increasing sales to existing customers than generating sales with new customers. Of the respondents, 46% of those already engaged in digital sales are motivated by the potential for increased sales to existing customers compared to 36% who are motivated by increased sales to new customers. The companies with plans to digitize their sales seem to be equally driven by sales to new customers and existing customers (40%).
Why then is there a greater incentive to focus on existing customers than sales to new customers? Well, one answer is that many B2B companies know their market well and often serve a limited number of customers within that market. These companies likely already have established contacts with the majority of these customers and therefore choose to focus on add-on sales and aftermarket sales, rather than looking for new customers. This is also in line with the ambition to elevate the level of service.
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If you would like to see the full results of the study, click here to download the Scandinavian B2B Commerce 2020 report! You can also contact us directly at curious@litium.com if you have any questions about the study or just want to learn more about Litium.