← B2B Agility with Greg Kihlström™: MarTech, E-Commerce, & Customer Success
B2B Agility with Greg Kihlström™: MarTech, E-Commerce, & Customer Success
#32: The Amazonification of B2B ecommerce with Alex Sayyah at Aleran
00:30:55
Is your B2B buying experience stuck in the past?
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- [00:02]
Alex Saya
The agile brand.
- [00:08]
Greg Kilstrom
Welcome to the B2B Agility Podcast where we look at the factors that drive success in B2B marketing with a focus on the people, processes, data and platforms that make B2B brands stand out and thrive in a competitive marketplace. I'm your host, Greg Kilstrom, advising Fortune 1000 brands on MarTech marketing operations and CX, bestselling author and speaker. Now let's get onto the show.
- [00:35]
Is your B2B buying experience stuck in the past? If you're making your customer's email for a quote, while competitors offer seamless online purchasing, you could be losing the next generation of buyers. Today we're discussing the Amazonification of B2B commerce with Alex Saya, CEO of Alaron Software. We're going to talk about how B2B companies are adopting B2C principles in E commerce and why Gen Z and millennial buyers are pushing for a shift to seamless online purchasing, even for complex products. Alex, welcome to the show.
- [01:07]
Alex Saya
Thank you very much. Thanks for having me.
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Greg Kilstrom
Yeah, looking forward to talking about this with you. Before we dive in though, why don't we start give have you give a brief intro and a little background and your role at Allureon.
- [01:20]
Alex Saya
Sure, sure. So I'm, I'm the CEO of Alaron Software and I've been with the company for over four years. And prior to Alron, I worked at some large companies like Transdab which was a 8 billion euro company where I led up their B2B and B2C commerce teams as well as worked at little companies like IBM and some other companies like Nomadix as well as Nero Burning Rom. If you've ever burned a dvd, chances are use the Eros technology. And I was head of E commerce for that organization as well, globally. So extensive experience in commerce, extensive experience on both the B2B and B2C side. So I took that, took that life experience and probably the last 10 or so years of experience prior to joining Alron and kind of came to solve the salesperson's problem because I've always, you know, led teams that were in marketing and sales and I have affinity for salespeople and the whole reason for us being the reason for Al Ron is to really solve the salesperson's problem.
- [02:38]
Greg Kilstrom
Yeah, let's, let's dive in here and we're going to talk about a few things, but I wanted to start with talking about this trend of B2B companies adopting B2C principles in their e commerce approaches. So, you know, it could be called the Amazonification of B2B commerce. Can you talk a little bit about, you know, what's, what's driving this shift towards a more seamless consumer like online experience and why is it happening now?
- [03:05]
Alex Saya
Well, I think two things, right? One factor is the fact that, you know, we are all consumers at the end of the day as well in our personal lives. We're used to shopping on Amazon, you know, buying a 50 pound bag of dog food for $8 and getting shipped to us for free tomorrow. So we have those really outlandish expectations from our, you know, from the, from the companies that we transact with personally. And I'm finding it that to be also true on the B2B side as well when we're in business as well. And you parlay that with the fact that every sale is an emotional sale, you need to feel good about it and you need to get a seamless experience kind of the self. The gratification you get at Amazon is amazing, right? You get a lot of information right at your fingertips. You know, what you've purchased in the past, you can go back, you can transact very easily. So we're used to that in our personal lives as well as, you know, the, you know, there's about 70% of all the buyers now are millennials. And you know, unlike myself, they're much younger and they're used to shopping online. And if they can avoid talking to anyone, they'd rather just do the research on their own. They'd rather purchase on their own and not get involved with salespeople. They'd rather just do that transaction seamlessly again, going back to what they're used to. They're comfortable buying online, they're comfortable researching. And when they don't have information readily available, they tend to go look elsewhere. And you know, our customers are telling the same thing. They have a lot of people that come onto their site and their sites aren't necessarily, you know, well positioned for an online transaction. And those buyers are leaving and they're going elsewhere. And you know, that's the goal. Alaron's whole reason for being is to make sure that our customers, the manufacturers are able to provide that seamless buying experience for their customers who are more and more going to be millennials.
- [05:12]
Yeah.
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Greg Kilstrom
And so for those B2B companies, you touched on a few, on a few things already, you know, the need for self service and just online in, in general. But you know what, for these B2B companies that are trying to adapt to stay competitive, you know, what are some of the principles that they should be looking at.
- [05:33]
Alex Saya
So B2B commerce is very different than B2C. Although at the cart level the transaction is similar. Right. You add things into your card and then you transact, you buy. But, but how you go about it is very, very different. You know, in B2B there's a lot more complexity. You're, you're selling configurable products that could be complex. You have multiple types of audiences, you have multiple price points, you have multiple types of products that you sell to different audiences. And you know, that creates a lot of challenges. So it's not just a simple cart anymore. You know, you need to have, you know, abilities to configure price quote, you know, provide information and deal with different audiences, with different price breaks, with different promotions, you know, with different types of customer types. And you've got to make sure that it's personalized for them. And we're seeing our customers are struggling with that. Right. You know, they said, okay, Well I need B2B commerce. So it's very similar to B2C. So they look at solutions like Shopify and they realize, well, that doesn't work for us. You know, we have a simple price list and one customer, we have different customer types, et cetera.
- [06:56]
Greg Kilstrom
Yeah. So I mean to kind of, to talk a little bit more about that. You know, when it's, when it, when a B2B company is selling some of these complex products. And right now it might be a lot of back and forth, maybe over email, maybe, you know, phone calls. Certainly, you know, you talked about some of the drawbacks of this approach as far as, you know, you're, they're losing people. But you know, how can E commerce work for, in these kinds of scenarios and ideally make it better?
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Alex Saya
That's a very good question. So a lot of what we try to do is automate, you know, time consuming daily sales tasks for our, for our customers. Right. And the cost of sales is about 60% of the revenues that they're generating. And the reason being is that they have a lot of FTEs, you know, they have a lot of road warriors, they have a lot of sales infrastructure to support their sales goals. And a lot of what we're trying to do is say, hey look, you know, you can do this in a more automated, seamless, seamless way. Not only are you going to be saving a lot of money, but you're also going to be opening up your employees to spend less time on mundane, you know, sales tasks and dealing with customer questions like, well, can you tell me What I've ordered in the past. Well, with our platform you have a capability, you have a portal where you can go online at any time and see what you've purchased in the past, what your price breaks are. You can reorder right away with just a click of a button. There's a lot of autonomy, provide our customers and that at the end of the day creates a better relationship with the customer. But most more so, it saves our customers a lot of dollars because, because they don't need as much staffing to support that sales effort. So again, you know, we try to close that sale faster. It's all about time to close or you know, efficiency.
- [08:56]
Greg Kilstrom
This makes a ton of sense as far as like the benefits and the rationale to do it. You know, what do you think is holding some of these companies back from embracing, you know, whether it's streamlined e commerce, just, you know, overcoming some of these barriers in general?
- [09:13]
Alex Saya
Sure. So I think that, you know, our customers are mainly mid market manufacturers, so they're doing anywhere from 50 to, you know, 500, $600 million in revenues every year, although we have some customers that do a lot more than that and some that are a little bit smaller. But in general that's the customer type that we sell to. And all of them's biggest IT investment or you know, tech stack expense has been their erp. Now I don't know if you've ever implemented an ERP solution, but it's really cumbersome, difficult, challenging, very, very scary. For these manufacturers who are entrepreneurs, they're experts at building whatever their products are. They're not great technology people, so they're very, they're, they're scared, to be honest, you know, and they're afraid that, you know, an, and implementation of a commerce platform is going to be similarly as difficult, costly and time consuming as an ERP implementation. And that's no longer the case. It can be actually very, very seamless. With our platform, for example, we require very minimal it, right. We enable our customer salespeoples to manage our platform on their own. And what they're used to is spending, you know, tens of thousands of dollars, hundreds of thousands of dollars to implement and then to maintain a platform that they now can't manage themselves, they'd have to create a ticket every time they want to make a change. Now they have to go back to the IT department that's underserved and under resourced themselves who are trying to do very many different things above and beyond just sales. And that's difficult for the company.
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Greg Kilstrom
So want to talk a little bit more about the generational changes and shifts going on too. So certainly we touched on this a bit as far as overall preferences are shifted and I would say that's, that spans multiple, even, even Gen Xers like myself probably spans, spans other generations as well. But you know, why, why does this become more and more important over time? As you know, now we've got Gen Z, you know, in a few years we'll be talking about Gen Alpha or whatever, I'm sure. So like, who knows what they're going to want. Maybe they'll, maybe they want to use the phone, I don't know. But probably not.
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Alex Saya
But you know, old school.
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Greg Kilstrom
Yeah, but like, you know, why, I guess, you know, how, how does a B2B company continue to adapt not only to today but you know, moving beyond as you know, generations coming up, they're going to, they're going to have, it's kind of a continuum, right?
- [12:12]
Alex Saya
What these companies aren't realizing is that, and these are some facts, 80% of all their sales interactions already are somehow online, right? The only thing that they haven't solved for is really like the last mile, right? It's the actual transaction or you know, that portion of it that goes back to, you know, a dial up, right. So they basically have a website, they have buyers that are doing research online. You know, they have catalogs in many cases that are PDFs, they're sending information via email, they're transacting, you know, so now they're doing all that, but then they're transacting over the phone or in person. And those two things are not consistent. Right? And so it's already, it's already there. And what they're realizing is that they're not capitalizing on getting the remaining 20% of that transaction. And they can simply do that by, you know, spending a little bit and putting together a platform that their customers are really, really demanding. I mean, 2/3 of the buyers today would prefer a web chat over, you know, talking to someone on the phone. We see that on our own website. You know, we have customers inquire and you know, they'd rather do a web chat with us, they'd rather ask information via text messaging than actually talking to one of our reps. And we're prepared for that. And you know, we want our customers to be prepared for that as well.
- [13:50]
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- [15:23]
Greg Kilstrom
Yeah. And you know, I think so. I mean it's more, I think it's more ubiquitous than some may think right it out there. But you know another thing that we've, we've circled around a bit as well but I want to talk a little bit more about is just you know, the complexity of some of like let's say industrial equipment and all of that. It's like is the, is the perception that some of these things are too complex for E commerce? Like is that, is it true? How do you get around that? Because I mean I do think there's there are some if 80% of the, of the purchase is already happening online. Is it really that, that complex to, to get the, that other or is the last 20% the complex part?
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Alex Saya
I think that the, the, the honest truth is that the last 20% of the complex part. Right. So you know, and, and, and one way that we're solving for that is that you know we, we, you know, product information management, we have the ability to do cpq which is configure, configure price quote and you know, a lot of our customers are engineered to order so they don't have something that's off the shelf. It's something that you have to configure and build. But customers want to be able to see that information in front of them. Right. And you could do that online. You could, they could research and do the research, then configure the product right there, get a quote online, not even have to talk to anyone and then review that quote and then approve that quote and then transact on that quote, you know, online. And so, you know, it is complex, right? It's also complex in other ways. It's complex in the fact that, you know, our customers demand multi storefronts. You know, they don't want just one user experience. They have value added resellers that they sell through and they have, you know, they have resellers as well as vars that they sell through. They also have customers that they sell through. And each of those channels requires a different subset of products because they, they may sell some of their products to one but not, not all of them to the other. And they all have different pricing requirements, right. And they also have different terms like some companies you have, you know, net 90 terms or your biggest customer. And some customers are, you know, pay, pay on order. Right. So it really depends and they need that flexibility and you know, our, our platform enables that. And it's something that the market demands, you know. Yeah, and that's kind of some of the complexities like you said, are in that 20%. And the way they're doing it now is they're solving it with throwing more bodies at the problem. And by throwing more bodies at, sometimes the more people you add, the more difficult to actually add to this solution as well. Just imagine this user experience, right? I now have a part that broke. I have a machine, let's say it's a fan. It's a very large industrial fan. And now one of these electrical components on my fan broke. I know the part that broke right after I call my sales rep who is my first line of defense. Well, my sales rep is not motivated to deal with my call because he doesn't want to replace a hundred dollar part. He wants to sell $100,000 fan. So he's not going to call me back. Then I have to call support. Then support has to create a ticket. Then I now have to go and order that to see if that part is available. So now my large industrial fan is not operating and that could actually end my business. It could stop my business for the time Being right. Whereas what we enable you to do is in many, many cases our customers have a diagram of their entire fan online and they know what part broke and they could just click right on that part and then add it to cart and transact right there. You know, everyone is happy. The sales guy is not wasting his time with $100 order, he can continue focusing on selling a hundred thousand dollar fans. The customer gets the part delivered to him the next day so his fan is operational support, doesn't have to really worry about do we have this inventory? Do we not have an inventory? And it just reduces a lot of the headache and a lot of the friction that is caused and also a lot of bad will that's caused with customers. And the thing that we really don't talk much about is the fact that, you know, now more, more and more millennials as well as all of us, we're not necessarily loyal to any brand. You know, we're loyal to the experience that we have. Right. And so if we can get the part that we need from the company that we bought it from. Right, the whole system, for example, buy from them because, you know, it's easy. But if they create any friction, we'll buy from their competitors, we'll buy from someone that sells it for less. You know, so the whole brand loyalty notion is out the window. Nowadays people are very well educated, very insightful consumers. They can, they Google everything, they verify everything, and if you're not right there where they are, you're going to lose the sale.
- [20:52]
Greg Kilstrom
Yeah, yeah, well, and I think you make a good point of they're loyal to the experience, not just the logo that's on their industrial fan or whatever.
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Alex Saya
Right?
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Greg Kilstrom
So it's like if you make that easy and you have the right platforms in place and all that kind of stuff, then yeah, you're going to, you're going to. Next time they need to buy a fan, they're going to go to the place that lets them click on the, on the area of the fan that's missing or needs to remember that.
- [21:18]
Alex Saya
The other thing that's also very, very important is that that positive sales experience also enables you to upsell as well, which is a huge thing that our customers are seeing. So customers or, sorry, our customers or manufacturers that basically have a commerce platform available for their customers end up seeing like a 20 plus, 25 plus percent lift in total order value. And the reason why is that, you know the guy that we talked about who now wanted to get this part for his fan, well, he knows that you know, he may need some other parts and throw up there in front of him. He goes, people that bought this part also bought this other part. And he wants to be proactive. He doesn't want to wait until something fails. So he may buy more of the same product, he may buy other products that are peripherally connected to that one product as well. And it just increases the, the order value. And that's a huge benefit for our customers as well. Love it.
- [22:21]
Greg Kilstrom
Well, so looking out a few years here or you know, where do you see B2B E commerce evolving? And you know, there's AI, there's other advancements in technology, perhaps more shifts in buyer expectations. You know, what do you see coming down the pike?
- [22:39]
Alex Saya
I mean, I think AI is going to be huge and I think that, you know, it's all about personalization and AI enables that. Right. So just imagine, you know, having an AI enriched platform that tells, provides the customer with a much more personalized buying experience on the things that they need as well as for our customers or the manufacturers, leveraging AI to do just in time, pricing, right. Understanding their inventory mix and how, what their turnovers are and what are some related products. What's the best pricing matrix that they need to provide by channel for each channel and what are the messages that each channel resonates with? Right. What do I show in that online forum to my customer? Are they interested in seeing more bells and whistles? Are they interested in seeing more imagery? Are they interested in seeing more how to guides and serving up the right content at the right time in that buying experience? So I think AI is going to just become ubiquitous and part of everything that we do. And you know, it's the future and people are going to be a lot more, we're going to be competing a lot more. We're all going to have more competitors than we know what to do with because AI is going to be so powerful and more people are going to come into your space. There's going to be more competition because the threshold gets lower. Right. And people just need to be attuned to providing a better user experience.
- [24:28]
Greg Kilstrom
Yeah, yeah. So, you know, to kind of recap here, you know, for those B2B companies out there that are not, you know, moving full speed ahead with, you know, improving their E commerce experience, you know, what would you say to them, you know, what are some of the key reasons they should consider investing more in this consumer, you know, consumer type approach?
- [24:53]
Alex Saya
Well, I mean, right now only about 13% of our customer, you know, our addressable Customers, right. Our disable, our addressable target market have, have e commerce capabilities, I mean only 30%. So we're relatively still the infancy. So back to your question of, you know, how are these guys going to need to move forward? Right? They need to adapt. They need to come up with the times. Their customers are only getting younger or not necessarily getting younger, but the old customers are kind of going away and retiring and their new customers are much more web savvy, tech savvy, impatient, more fickle, for lack of a better word. And they all want the best user experience. And it's really adapt or die. And it goes from. It's the old travel agency story, right. We're no longer going to travel agencies to book our travel. Right. But now there's opportunities to shop through big marketplaces like expedias of the world, et cetera. So I feel like what's happening in this space as well is that, you know, people are going to need to adapt their sales channels, adapt how they market to these customers in order for them to adapt. And consolidation is also something that's huge. Look what Amazon did to the mom and pop stores. Look what Walmart did to the corner store, right? These things are happening in this space as well. Not, not as profoundly, but it's still happening. And you know, it. They, you know, these manufacturers need to respond to the need of the customers.
- [26:50]
Greg Kilstrom
Well, Alex, thanks so much for joining today. Of course. Yeah. One last question before we wrap up here. I'd like to ask this to everybody. How do you stay agile in your role and how do you find a way to do it consistently?
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Alex Saya
Well, two things. One is I read a lot because I kind of have to keep my fingers on the pulse of what's happening in the market. The second thing I do is I hire much smarter people than myself. So if you're not smarter than me, I'm not hiring you. So I try to surround myself with very, very smart people. I've been very, very fortunate at Alaron to do so. And it's a pleasure to work with them. I learn something new every day. And just like my customers who need to adapt, you know, I'm in my 50s, I need to adapt and learn about new ways of selling our platform as well, marketing our platform as well. And you know, unlike this conversation, I spend a lot more time listening and probing and asking questions than talking. So I try to learn from my team as best as I can.
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Greg Kilstrom
Love it. That's great. Well, I'd like to thank Alex Saya, CEO of Alaron Software for joining us today and sharing as you can learn more about Alex and Allron by following the links in the show notes.
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Alex Saya
Awesome. Thank you Greg.
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Greg Kilstrom
Thank you.
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Thanks again for listening to the B2B Agility podcast. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show more easily. You can access more episodes of the show at www.b2b agility.com. that's b2b agility.com while you're there, check out my series of best selling agile brand guides covering a wide variety of marketing technology topics. Or you can search for Greg Kilstrom on Amazon. Until next time, stay focused and stay agile.