The rapid evolution of B2B buying behavior and technology advancements has resulted in 65% of B2B companies conducting all transactions online, according to McKinsey. Despite this shift, the B2B purchasing process is often still flawed, with industrial suppliers requiring customers to contact a salesperson for quotes and manually process payments through checks or phone payments.
To meet the rising expectations of B2B buyers who hold ecommerce channels to the same standard as other channels, it is crucial for brands to upgrade their payments experience in the B2B buying process.
The B2B Ecommerce Buyer Report: An Exploration of Payment Preferences and Trends
At Balance, we've seen how merchants can drive conversions and sales by providing a frictionless checkout and payment experience in the B2B buying process.
Our latest report, published with MRM Commerce contains key insights on the important role of payments in the B2B purchasing journey. Balance surveyed over 400 B2B buyers to reveal the most importance considerations and expectations around the payment experience in the B2B buying process.
Read on for the main highlights and tips to help you adapt to increasingly sophisticated digital expectations.
Loyalty matters in B2B
In the B2B space, loyalty is likely to be built upon years of an established partnership between the customer and the sales team. Ecommerce is often misperceived as a channel that can jeopardize that relationship, when in fact it can be a compounding advantage as it provides seamless and self-serve ways for customers to make purchases.
Dan Saltzman, VP Client Services at MRM Commerce, adds, “Now more than ever, ecommerce will be about what else merchants can do from a loyalty perspective and from a value perspective to make the buying experience better.” When merchants deliver that, especially while addressing the complexities and nuances of their industry—it’s enough to keep customers coming back.
Take checks – the most familiar and traditional B2B payment method, with 40% of companies paying this way. Rather than incorporating a mix of digital payment methods, a lot of merchants have completely done away with the check-based option at checkout. This is a great example of the disconnect between B2B payment preferences and ecommerce offerings.
The cost? Losing a multi-decade relationship to a competitor that made the investments to provide customers with an experience that reflects their preferences. Not only that, but the potential impact of loyalty is even greater when considering that more than 50% of respondents said they would share their negative payment experience with colleagues and peers.
Outdated processes are creating friction
Since B2B is organizationally siloed and heavily calcified from a structural perspective, there are a lot of people who don't want to see things change. While change is hard, offline processes traditional to business payments are simply no longer fit for true digital adoption.
B2C brands have been able to move quickly to digital commerce and establish themselves, some for decades.. The same can’t be said for B2B and a lot of that is due to processes that don’t support agility and speed.
For instance, net terms, or trade credit, is a backbone of B2B buying. It’s how businesses have paid since the beginning of commerce. However, like any legacy process, there are inefficiencies that negatively impact the speed and ease of the user experience.
The process of applying for credit online today typically involves a lengthy PDF document that buyers need to submit and wait for feedback; sometimes this can take days or even weeks. And only then do buyers know if they were approved for net terms.
Poor payments experience can lead to cart abandonment
Some merchants might be too early in their digital transformation journey to expose the kind of ecommerce data that could reveal potential leaks in the path to conversion.
Others might think that issues like cart abandonment are not a real problem in B2B. And while B2B buyers do visit ecommerce sites with high intent, that doesn’t mean high conversion rates are a given.
According to our data, the checkout presents a major obstacle for customers who are ready to buy. 73% of respondents admitted they would likely abandon the purchase if they encountered friction during checkout.
“This idea that ‘buyers can only get the parts they need from me’, or ‘as long as we win on price we’ll be ok’, is fundamentally wrong,” says Saltzman. “No business can keep the status quo indefinitely.” This will be especially important as Gen Zs and Millennials become major stakeholders in procurement roles. Their standards are very different from those of generations prior. And the experience they’re demanding – traditional distribution greatly underserves.
Their demands are also not out of the question. All buyers want is to check out in a breeze, the same way they’ve done with modern consumer tools like PayPal, Rapyd, Apple and Google Pay. In B2B, convenience is even more important when the payment step is the last one before a buyer completes their often high-value and carefully selected order.
So you would think merchants would be investing even more in creating a streamlined checkout experience. Once customers stumble at payment, merchants can lose everything they’ve gained in the transaction thus far.
The digital experience is top of mind
A series of threads recently went viral in Hacker News. The topic? B2B ecommerce, specifically an industrial supply company, McMaster. One comment explained that many legacy organizations have failed to choose the path of building an online presence with the same standards they maintained when building their offline operations and McMaster did not make that mistake.
B2B companies know their customers—and that’s all they need in order to create a functional ecommerce site that focuses on what it is their customers really want. That’s what users explained McMaster does so well: an experience that understands its customers, one that focuses on making their jobs easier and saving them time.
And that can mean any number of things – whether that be easy product configuration or an intuitive checkout experience. The result? One buyer wrote that he would “gladly pay 2, 3, 5, even 10x the price to get it from McMaster.”
A lot of merchants can say that the digital experience is the stuff reserved for B2C. And that might be true if the digital experience is being measured by VR shopping, animations, or sleek fonts. But if we focus on the more meaningful definition of the experience, one that should ultimately be a reflection of understanding the customer, then B2B ecommerce has to follow in those steps.
And the payment stage isn’t left out of that.
B2B buyers want options
“There’s this idea that B2B needs to be this futuristic buying experience. And that couldn’t be more wrong. It just needs to service the end customer in a meaningful way,” explains Saltzman. While in B2C payments, merchants may add new digital wallets or QR Code payments, delivering a meaningful payment experience in B2B can be as simple as saving a customer as much as 20 minutes per order.
How can merchants do this? For starters, businesses can’t rely on one payment method to usher in the golden era of business payments being fully online. They need to go beyond the self-serve credit card offering that’s so common today and make it possible for buyers to get the same experience for more complex requirements.
For example, can buyers choose to pay upon delivery? In milestones? In installments? Can they be instantly approved for transaction financing, like net 30 or net 60?
Businesses can argue the consumerization of business transactions will take time. So why invest now?
Yes, it’s true that ecommerce payments are still an immature segment in B2B, but buyers aren’t cutting businesses any slack. Especially enterprise buyers. Not having the preferred payment methods at checkout is the number one reason enterprise buyers would switch to another ecommerce site. And it's no wonder when most B2B checkouts are limited to one or two payment options.
Want to dive deeper into this data?
To access the comprehensive analysis of the data set and additional survey findings, refer to the full report.
While B2B lags behind B2C in terms of adoption of new payment technologies, the arrival of more B2B payment providers presents an opportunity for businesses to leverage cutting-edge solutions to improve their customer service and gain a competitive edge.
Currently, only 7% of the $120 trillion B2B payment volume is conducted digitally, highlighting the need for streamlining the B2B buying process and eliminating the friction commonly associated with B2B purchasing to drive growth. By providing a fast and seamless buying experience, businesses can better serve their customers.
How we can help
Balance is a comprehensive B2B payments platform that offers a contemporary B2B buying experience with popular payment methods and digitized net terms of 30/60/90 days.
Plus, our pre-configured ecommerce integrations make it effortless to get started. If you're seeking a way to differentiate yourself in the B2B buying process, reach out to our team.
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