Years of disruption have transformed many B2B companies into digital-first sellers. Both leaders and late adopters understand that competitive pricing and dynamic eCommerce pricing are table stakes in the race to win business and grow profits. Read this post to learn why a successful B2B eCommerce strategy hinges on self-service, transparent and consistent pricing.
What is B2B eCommerce Trending Toward?
“The growth rate for B2B eCommerce in 2021 was significantly faster than the 15.2% growth rate for all U.S. manufacturing and distributor sales, which reached about $13.1 trillion in 2021” Digital Commerce 360
Digital B2B eCommerce has reached a critical mass. For pricing teams, the implications are clear. Every B2B pricing strategy must include eCommerce channels.
When deciding how they are going to execute online pricing, companies must look to customer experience as their North Star. B2B customers expect self-service, transparency, and consistency across channels. Hence, each price presented online must make sense for each specific customer relationship and/or the context of the order in progress, and it must be consistent or intentionally differentiated with pricing in other channels and often needs to be dynamic.
Watch: Creating a Seamless Digital Commerce Experience with Integrated Data and Solutions and Deliver a B2C-like eCommerce Experience – Dynamic Pricing and Personalization
How Do You Price Items to Sell Online?
Determining the right price to show online is a tricky proposition indeed. In traditional channels, the sales rep can offer better pricing on the spot when customers are dissatisfied. The digital channel removes the salesperson filter, and by doing so, risks losing sales when prices are misaligned with customer expectations. A majority of the prices available to B2B customers online are non-negotiated or previously agreed upon, but in advanced dynamic price optimization and management use cases, automated negotiation is available to buyers.
Regardless, the initial online pricing that is made available to customers for a given product is critical to winning business. In the case of existing customers, a lack of market-aligned pricing means they must call in to place an order, thus negating the purpose of the digital channel. In the case of new customers, eCommerce has presented unprecedented price transparency in B2B, and too-high pricing can result in an immediate bounce to lower-price competitors online.
Determining the right competitive pricing to present hinges on several key questions, many of which are unique to B2B. Specifically:
- Is this a known customer with a pre-negotiated price?
- Is this a new, unknown customer on the open web?
- If a known customer, is this new or existing business?
- Are the prices aligned to what salespeople are quoting?
- If online customers call sales reps for a quote, will pricing be aligned?
- Can customers counter pricing online? Can price negotiations be automated?
- If my costs change daily, can I update pricing immediately across systems?
- Do I have the right technology architecture in place to calculate and deliver the appropriate price in real time?
The right B2B eCommerce pricing strategy answers all of these questions simultaneously so that various customers’ needs are met. In addition to determining what price to show in different scenarios, getting pricing right in the digital channel requires the execution of a complex price build of fees and taxes or discounts based on a set of well-defined price rules within a pricing engine to arrive at the final price. Layer in the need to update pricing as quickly as the market, competition, inventory levels, or other factors necessitate, and the complexity can quickly overwhelm any pricing team with only manual tools at their disposal.
Watch: Power Real-Time Market Pricing for eCommerce
How Do You Keep Pace with the Speed and Volume of eCommerce?
Those who embark on the eCommerce path quickly learn that requests back to their pricing system of record increase exponentially. Not only does a higher quote volume tax the pricing engine, online buyers’ baked-in expectation for instant pricing further overheats the system. It’s not uncommon for the digital channel to request tens of thousands of prices per day from the pricing system of record. Additionally, complexities such as competitor price comparisons or current inventory levels cannot be factored into pricing decisions quickly enough to produce consistently rational and competitive prices.
Read more: Legacy Pricing is Harming B2B: Do This Instead
Simply put, most B2B companies are not equipped to dynamically service all requests coming in from eCommerce on top of other applications like CPQ and CRM. They need a real-time pricing engine that can house its pricing logic, calculate complex calculations, and easily scale to the high volume of pricing calls that the digital channel requires.
Read More: How a Real-Time Pricing Engine Soothes Dynamic Pricing Pains