EP094 Scaling B2B with Digital Channels - Reaching the SMB Market Efficiently
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[00:00:06] DARIN: Well, good day and welcome to Commerce Today. My name is Darin Newbold and Josh is here with me as always. And, Josh, we're going to be talking about, small to midsize businesses and, and how they can be reached through this crazy thing called digital channels. So I know you got some really good stuff coming for us.

[00:00:24] DARIN: So Let's just kick it off and get right to it.

[00:00:27] JOSH: Yeah. So actually we're talking about businesses of all sizes because we're, we're mainly talking about big businesses selling to small businesses. So that's going to be fun today, but yeah, really just wanted to dig in. I've had some interesting conversations recently with different brands that are kind of realizing the opportunity they have as a B2B company in selling to small businesses, but also there's a lot of challenges that come to, especially trying to scale up selling to small businesses.

[00:00:53] DARIN: definitely. And we know obviously that the SMB market is [00:01:00] huge and there's a lot to it. what's that look like? How do they deal with it?

[00:01:04] JOSH: Yeah. So the SMB market, that opportunity is huge. so, we've got some statistics. We'll link to the source and the show notes as we always do, but SMBs globally are about 90 percent of all businesses.

[00:01:17] JOSH: The U S our economy is really focused on small businesses. 99. 9 percent of businesses in America are small businesses. and that works out to about 33. 2 million possible customers. If you're targeting all small businesses in America,

[00:01:33] DARIN: How do they calculate that, that 99 percent of all businesses are small

[00:01:39] JOSH: you will have to ask the national association of women, business owners, whose, statistics I'm using for that. That's why we linked to it in the show notes, but I don't know. there's some places that will define it by number of employees. Some places will define it by revenue. So one interesting thing I did see is that it works out to, because [00:02:00] they also share the stats on the number of employees at those businesses.

[00:02:04] JOSH: And it's an average of about two employees per business. So very small businesses. It's 

[00:02:10] DARIN: that's got to be, that's got to be interesting and amazing in and of itself. So I guess, kind of looking at how a B2B company or, or why even a B2B company would want to go after this market, that's kind of a big duh, I'm sure. So maybe help me understand what that next step might be or.

[00:02:32] DARIN: What they would be going after or how best they can take a look at all of

[00:02:36] JOSH: well, first of all, so we talked just very briefly about the size of that market, but there are a lot of challenges in reaching that, market. So. Traditional B2B sales, it's usually very focused on outbound. It's kind of a one to one relationship between a salesperson and the brand they're selling to.

[00:02:53] JOSH: there's a lot of relationship building. and that's just not very scalable whenever you're dealing with [00:03:00] much smaller deal sizes, lower margins, things like that. using this direct sales approach that works really well for B2B companies when they're going after the larger companies. That, has just such a higher cost of customer acquisition.

[00:03:14] JOSH: So you, again, really hard to scale that down into small businesses. an example I like to give is if you're a restaurant supply B2B company, you sell to Starbucks. You have one sales rep that has a relationship with someone at Starbucks. You've just sold restaurant supplies into hundreds of locations.

[00:03:31] JOSH: You want to sell to the local coffee shop on the corner. Yeah. You have to have a relationship with that one local coffee shop. So now all of a sudden you're trying to maintain relationships with thousands of local coffee shops all around the U S doesn't really scale. 

[00:03:46] DARIN: I totally get it. And that's, that's going to be virtually impossible because you can't have enough salespeople to cover all of that, to, to get there and have those relationships.

[00:03:55] DARIN: So obviously that digital experience becomes kind of that relationship that they can [00:04:00] have. Tell us about that and the value around that.

[00:04:04] JOSH: Yeah. So SMBs really like that digital relationship. I mean, I think at this point all B2B buyers do, but especially, SMBs, you know, a lot of smaller companies, they're not going to have a dedicated person that's just responsible for placing orders with you.

[00:04:17] JOSH: Like it's going to be someone that's doing two or three other things. so usually limited headcount, limited resources. They need to move fast. They're probably doing all of this from their phone while doing something else. So they really need a lot of self service options. again, small businesses, person placing the orders.

[00:04:35] JOSH: They may not be able to get to it till 6 PM, 7 PM, 10 PM. When your sales reps are gone home, your office is closed. So they want to be able to self onboard, view their pricing. it really, and again, all B2B has shifted to a more consumer like experience online, but especially when you're dealing with SMBs, they really want, a very almost B2C consumer e commerce [00:05:00] grade experience.

[00:05:01] DARIN: Yeah, that's what I was going to at least kind of ask you about and I think kind of coming up next here in our, in our show is that's got to be a, a really Important and key kind of building that relationship through this online experience. So obviously there's a lot of tools that are available to leverage to, to do this.

[00:05:22] DARIN: Maybe kind of, let's start with that and see where that takes

[00:05:26] JOSH: Yeah. So kind of recapping where we've been, there's a whole lot of small businesses out there. It's hard to scale up selling to them using a sales led approach and they don't want a sales led approach anyway.

[00:05:38] JOSH: They want the digital first interactions. That gives a huge opportunity for these B2B brands. But yes, they have to know how to leverage these digital tools well. And so when I say digital tools, this could be an e commerce platform. This could be a marketplace. This could be a portal. There's so many different ways to do this.

[00:05:58] JOSH: I think the best, B2B [00:06:00] solutions when you're selling into an SMB market. really combine all of those things. So you might have one e commerce platform that you centralize all this on, but you're also providing portals. you're providing punch outs, you're selling on marketplaces. and so lately it seems like there are three different ways, maybe four different ways that, platform wise, people are going when they're building a B2B site, selling into SMB, and that is, big commerce, which they've made a big play in a B2B.

[00:06:30] JOSH: Magento and Adobe Commerce, they have been, I mean, they have a B2B module. They've been very B2B focused for some time. And more and more often now, custom built composable platforms. So Commerce Tools has been around for a while, but then also there's, new emerging platforms we've talked about a few times.

[00:06:46] JOSH: Medusa is a big one. but basically all of that, all those platforms, what they have in common is they allow you to have a self service e commerce experience. For your B2B customers that works really well for SMBs.

[00:06:59] DARIN: Yeah, they've got to be [00:07:00] able to do virtually anything and everything from that site and definitely would remind our listeners that several, gosh, months ago now, but we did talk a lot about composable and, and have a lot of that. So something to definitely go back and, and review.

[00:07:16] DARIN: So having a great self service portal. For these, it seems like there's about three kind of key areas that they need to hit. Tell us about those, Josh.

[00:07:25] JOSH: So onboarding is the biggest one. And that's where I see a lot of B2B brands really struggle because they might have, you know, if you're usually selling to the government or usually selling to fortune 100s, you have a very heavy procurement focused process.

[00:07:40] JOSH: So even to establish your online account, there's probably multiple documents that need to be verified. There's, it's a lot of manual processes that doesn't work well for SMBs and SMB hears about your company, lands on your website, wants to place an order from you. They want to be able to just do it. And so being able to have automated support, [00:08:00] chatbots, guided product tours, as much information to allow them to self onboard and purchase as possible is really critical.

[00:08:08] JOSH: also having a very clear value prop. like I mentioned earlier, your, your SMB buyers, half the time, they're not even actually buyers. They won't have buyer in their job title. They're a general manager. There's someone that's doing seven other things. They may not know exactly how your industry typically sells their products.

[00:08:27] JOSH: When they glance at one of your product pages, if it doesn't have a very clear, simplified message of this is the problem that you have, that this product solves, they're going to go somewhere else, or they're not going to see the value in your products. And then finally, just having A very user friendly design.

[00:08:42] JOSH: Again, this is becoming a must for all B2B and all of e commerce, but especially when you're selling into SMB, you have to have, a very mobile friendly, mobile first design that is very lightweight, easy to use. and that's not the typical B2B experience on most sites [00:09:00] right

[00:09:00] DARIN: And I would comment on that just a little bit on that user friendly design.

[00:09:03] DARIN: Small businesses will be very loyal, so they'll stick with something even if it might be a little clunky for a little while, but there is a point when enough is enough. let's share a couple of success stories. I think you had a couple that you wanted to highlight of where this is working and, and where it's coming together well.

[00:09:22] JOSH: Yeah, so the two companies that I've seen doing the best in targeting SMBs, first one probably won't surprise you. That's Amazon. So Amazon business, they have made it so easy for SMBs to buy from them with a Amazon like experience.

[00:09:36] JOSH: Imagine that. And just really nailing the, the self onboarding self, kind of purchase process. but also Grainger and they're kind of on the opposite side of Grainger historically wasn't known for having an amazing e commerce experience. but they have made some big strides and really simplifying the process of establishing an account with them, managing that account, placing orders online.

[00:09:59] JOSH: And that's been a [00:10:00] huge growth area for them because they didn't have great penetration into the smallest businesses before. And now they do. 

[00:10:07] DARIN: That's

[00:10:07] DARIN: awesome. That's awesome. Well, I guess the big thing is, is how can, how come the, the other companies can emulate these successes and be able to, to do these things? So there's ultimately a shift in this process from being sales led to a more marketing led type of, approach and growth. Tell me about that.

[00:10:30] DARIN: Yeah,

[00:10:30] JOSH: So again, the old school B2B model is very salesperson focused and I'm not saying, don't worry salespeople, I'm not saying fire your sales team.

[00:10:39] JOSH: As we'll see later in the episode, the sales team plays a big part in this, but In the approach to selling like a fortune 100, you have target accounts. You divvy those accounts out to your sales reps. They either call or in a lot of cases travel to those companies, and they sell in person and they sell face to face one on one.

[00:10:59] JOSH: And that is [00:11:00] how you're generating new accounts and new orders. Marketing led though is all about letting people find you thanks to the marketing efforts you're putting out there. And so this reduces the amount of, individual salesperson time needed to acquire each new customer to make that customer acquisition cost a little bit lower and this whole process a little bit more scalable.

[00:11:24] JOSH: So this is things like content marketing, search engine optimization. online paid ads, influencer marketing, which I'm seeing even in the B2B

[00:11:33] DARIN: More and more of that.

[00:11:35] JOSH: that's been interesting. 

[00:11:37] DARIN: that's that's got to be so important in that secret sauce of the content marketing SEO and paid ads. All of that is so critical to this and being able to drive it. There's another piece that's the automation as well as self center.

[00:11:53] DARIN: I'm sorry, self center, self service process that's involved here. Tell me, tell us a little bit more about that.

[00:11:59] JOSH: So [00:12:00] again, we're looking at, doing everything we can to lower the customer acquisition cost. And so automation can really help there.

[00:12:06] JOSH: So I mentioned chatbots. AI has been a big, improvement in this area. automated email sequences, and then also just different, marketing automation platforms, HubSpot, Marketo, et cetera. all of these things can nurture the small business accounts or small business leads into new accounts for your business without needing that, heavy involvement from a salesperson.

[00:12:32] JOSH: And then you mentioned, Self centered service and, self service portals that basically if I'm getting your emails and I'm a small business owner and I'm getting your automated emails and I click, I don't want to then click something and say, all right, have a salesperson call me to set up my account.

[00:12:51] JOSH: I want to click something to say, here's all my information. I want to complete the entire buying journey right now. And so you have to have some type of [00:13:00] self service portal, typically an e commerce platform that allows that person who's responding to your marketing led efforts to complete the account setup process and then actually complete a purchase with you.

[00:13:11] DARIN: Well, you kind of lead us obviously into the big next step here is kind of creating that whole digital first SMB customer journey.

[00:13:21] DARIN: So how does that play out? And it's so important in this whole process.

[00:13:26] JOSH: It is, and it's very different. And this is where I see a lot of companies get tripped up, is they think, oh, the buying journey, it's going to be exactly the same as our current buying journey.

[00:13:34] JOSH: They're going to want the same things. We're going to do them the same order. We're just going to replace the salesperson with a website. it's not at all how it

[00:13:40] DARIN: Doesn't work like

[00:13:41] JOSH: Exactly. So you really have to almost start from scratch and build some new personas around these SMB buyers and think, okay, what are their pain points?

[00:13:51] JOSH: What are they really looking to acquire? What kind of relationship are they looking to have with our company? Realizing it is going to be digital first. So they're not going to [00:14:00] have a salesperson visit them and then they start buying from you. They are going to hear about you online and then start purchasing from you online.

[00:14:07] JOSH: And so. You have to have that, that lead generation. I mentioned earlier, you have to have, product education to help them understand. And again, it's going to be different product education than you have for your, your bigger companies that are buying from you. and then really walk them all the way through to not just making the buying decision, but placing the purchase.

[00:14:27] JOSH: All without needing a salesperson to intervene. And it is good to have ways that if they get off the path, if they have trouble, they could reach out to a salesperson, but allow them to ideally on that, you know, happy path, make it all the way from sign up to purchase without a salesperson being involved.

[00:14:45] DARIN: And isn't this a great place where, I know we've mentioned it in other episodes, we haven't done it a lot, and maybe we could do an episode on this, but kind of those really smart chatbots with AI there that can help answer a lot of those main and [00:15:00] basic questions.

[00:15:00] DARIN: I just had to deal with that with a, with a bank and I was. I was pleasantly surprised because my question I thought was relatively, wasn't straightforward, but what, but a little bit off and, and the chatbot got it and even started point pointing me in the right path. So I was shocked at 

[00:15:16] JOSH: you can start a point when you write that. Make all this available on your website and make it all available to that chat bot.

[00:15:33] JOSH: So that when this buyer has a question, if you've ever covered it in one of your blog posts and white paper and a webinar, that chat bot can pull it from that. and that basically serves two functions then, because that's bringing new people into the top of the, the sales funnel, but then it's also answering the questions of those that are kind of further into the process.

[00:15:52] DARIN: That's awesome. That's awesome. Well, that was kind of something that came up and I know we've got some other challenges and considerations to think about.

[00:15:59] DARIN: I mean, [00:16:00] how do you balance the automation versus personalization? We've talked about this with, with other sites and all of it. So how does this differ? 

[00:16:14] JOSH: You really, you want to be able to, to automate as much as possible, but everyone these days is so afraid of, Oh, that's just AI. That's not, I want a human touch. I want some human interaction. And you realistically can't offer that to every single SMB in America. It just doesn't scale. So you really have to think about how do you personalize at scale using this automation?

[00:16:37] JOSH: But then having ways to qualify these, SMB customers where while they're a small business, they might have a big need for your product. They might actually become a larger customer of yours. And that's the point at which you can say, okay, if they're not really responding to the personalization efforts, but we feel like they are a potential large customer, Let's actually direct them to a [00:17:00] salesperson, provide them more of that, that human touch, human communication.

[00:17:04] DARIN: Always important. Well, this is kind of interesting that you put this here. Overcoming internal resistance to digital transformation. I always find this interesting. And so I really want to hear from you on this.

[00:17:17] DARIN: I hadn't thought of this one on the, for this

[00:17:20] JOSH: I love this one. When we're talking B2B, I always think of the TV show, The Office, the U. S. version. When Dwight decides he's going to outsell the new website. and that happens, like there are people, there are salespeople that will view this as a threat to their job, a threat, an existential threat to the way the company operates and they will fight it and they will push back against it.

[00:17:41] JOSH: And the best answer I have to that is. What we were just talking about where your website can help identify those customers that you would never reach otherwise, because they're the random coffee shop on the corner, but it turns out that coffee shop needs a whole new set of espresso machines. They're going to place a 30, 000 order with you [00:18:00] all because they were able to discover you on the website.

[00:18:02] JOSH: So being able to take those people and maybe pop them out of the fully automated buying journey, route them to a salesperson on the website. that can be the best way to overcome that, that internal resistance, but also just training, letting people know that, Hey, we're not doing this because we want to replace our salespeople.

[00:18:25] JOSH: We're doing this because we're expanding into a whole new market and identifying some new opportunities for those salespeople.

[00:18:31] DARIN: can be a great opportunity for a salesperson or for maybe a, a junior salesperson to then suddenly have these new leads that can just be fostered a little bit more to grow and become even bigger.

[00:18:43] DARIN: So, it can be a great opportunity. Well, Wanted to kind of wrap this up in a bow. We've, we've really talked about how lucrative this market can be. It needs some key pieces to it. It needs some automation. It needs a good, customer [00:19:00] journey that's going to, take people to the right place and bring that all together in a, in a relatively seamless way or as seamless as humanly possible.

[00:19:09] DARIN: So this is really a, really a great opportunity for those very, very large custom companies that they want to reach that SMB market and do some great things. Your last thoughts here, Josh. So I have been working on both the B2C and B2B e commerce strategy guide to help you build and kind of summarize your e commerce strategy for the next year.

[00:19:30] JOSH: that ties in great to this. I've been helping some companies, on the B2B side specifically look at one of their strategies for next year being targeting SMBs. If you're interested in that, it is not quite ready for public consumption yet. I have shared it one on one with a few companies though. So if you'd like a copy, find me on LinkedIn and send me a message there and just say, you want that e commerce strategy,

[00:19:53] DARIN: Perfect. And your Joshua Warren on LinkedIn has a yellow background in case you find other Joshuas there. So it is Joshua Warren on [00:20:00] LinkedIn. Definitely reach out. We'd love to hear from you. Throw us a question or two. We'd love to grab that for you and tell us about your experience. And thanks again for tuning in to Commerce Today.

[00:20:10] DARIN: Take care.

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