Direct-to-Customer (D2C): B2B direct sales

For a long time, brand manufacturers had no way around multi-level distribution structures or retail. Valuable B2B customer relationships and margin shares were left to middlemen. However, market developments, especially from the B2C sector, have for some time now made it possible for manufacturers to enter into direct customer relationships. However, not all companies are yet taking advantage of the benefits that arise from direct contact. We will explain to you from our project experience how opportunities from D2C can be profitably exploited for manufacturers and what challenges there are.

Initial situation: New challenges in B2B sales

Current market challenges such as raw material shortages, supply bottlenecks and rising prices are putting a strain on the relationships between manufacturers of complex, consultancy-intensive products and their customers. Added to this is greater competition between manufacturers in difficult times. Current sales structures do not allow manufacturers to engage directly with their customers and strengthen relationships. Any problems are instead intercepted by intermediaries and may not be resolved to the satisfaction of the manufacturers, as intermediaries usually represent multiple suppliers and interests.

At the same time, the requirements of customers in the B2B sector are changing. Trustworthy business relationships are becoming increasingly important; the customer wants advice directly from the manufacturer in order to have concerns and possible solutions heard there. An optimal buying and customer experience, which is already the most important objective in commerce in the B2C sector, is gaining immense importance for success in B2B sales as well. The simplification of handling processes is also becoming increasingly important. Everything should be as fast, flexible and efficient as possible - and of course digital.

The B2B direct sales model offers a solution. With a D2C strategy in sales and marketing, manufacturers can enter into direct exchange with their customers and meet the new challenges and requirements. However, there are also hurdles, such as a lack of know-how, inappropriate processes or infrastructure.

What is Direct-to-Consumer or -Customer (D2C)?

Direct-to-customer or consumer (D2C) or direct sales is the direct sale of a product or service by the manufacturer to its end customer, i.e. without an intermediary.

D2C influences the complete strategic orientation of a company, especially in sales and marketing.

For the manufacturer, this means:

It needs new, own sales channels and structures
The customer journey must be thought holistically
Infrastructures and communication channels for direct customer communication must be established

A survey of executives in B2B companies revealed that proprietary sales platforms will become much more relevant in the next 5 years. There are different forms for brand manufacturers for direct sales. Commerce can take place directly via the company's own store online or the manufacturer can sell its products via platforms such as marketplaces. It is important to define the right form for the respective company, depending on strategy, product and customers.

Advantages for brands in B2B direct sales without intermediaries

1. gaining customer insights

By collecting first-hand customer data (first-party data), the manufacturer gains more transparency about its customers, their satisfaction and their customer journey. The findings can be used to derive courses of action for future products, strategies in sales, and adapted marketing measures for the brand. Individual customers can be offered products that are tailored to their needs.

2. build and maintain customer relationship

Through D2C, the manufacturer finally has the opportunity to establish a direct customer relationship and develop it into long-term partnerships. Problems such as rising prices can be addressed individually and tailored solutions found for the individual customer. This in turn leads to strengthened customer loyalty based on trust and thus to higher customer satisfaction.

3. economic advantage and an independent, uniform pricing policy.

The manufacturer can set the price of its products for the end customer itself and avoids price increases by middlemen who want to increase their own margins. This in turn makes itself felt through lower prices for the end customer and an economic advantage for the manufacturer.

4. sharpening the brand

In D2C, the manufacturer has full control over marketing and communication concerning his product or brand. He decides how the product and brand are presented, thus ensuring a consistent brand presence online and offline. The brand image and external appearance are not diluted by the middleman. Through direct end customer contact, the manufacturer also has sovereignty over how to deal with complaints or customers who need advice. He alone shapes how his product or brand is perceived and sharpens the external image of his company.

Challenges for manufacturers and brands in direct sales

A strategic rethinking and breaking down of internal structures and processes is necessary. In the process, companies in the SME sector often have very specific challenges. However, most of them arise in the following areas:

Customer centricity: Customer insights and data need to be harnessed and the customer journey must be understood and optimized (online and offline).
Customer relationship: Existing marketing strategies must be supplemented with new customer communication approaches and channels (e.g., social media, customer service)
MarTech development: New technical solutions and processes need to be implemented and built. Especially B2B e-commerce-approachesplay an essential role here, in order to be able to implement an own store or approaches to B2B direct sales.
Data strategy: Existing marketing content must be supplemented and data quality must be restructured
Sales channel development: A dedicated approach is needed for sales from the value chain of the purchasing process to logistics and customer service
Partner relationship: Possible conflicts with own trade must be solved or intermediaries must be integrated and new service providers must be controlled

Three tips on approaches to engage directly with customers

1. basis for success: understanding customer requirement

Start by engaging directly with your end customer to learn more about their requirements and Journey (customer insights). Then, it's important to break down the silos (of departments, but also data) in your company and let marketing and sales work hand in hand.

2. start small:
select area for sale

Initially focus sales on a specific service offering, products or customer segment to pilot the approach and build the appropriate commerce and communication structure (online, possibly already including store).

3. take into account current structures in distribution:
Do not forget dealers

Include current structures in distribution by creating transparency. Your dealers have been an important partner in the customer journey of the customers.

Our conclusion

In the long term, there is no way around B2B direct sales, especially for products and services that require explanation. Manufacturers of brands, especially from the SME sector, have long failed to build relevant customer relationships with their B2B target groups and thus also missed the opportunity to learn from feedback, further develop their communication and their offering and thus differentiate themselves from the market. Only by breaking down internal silos, rigid sales structures and dusty marketing strategies is it possible to meet today's customer requirements and enter into a direct 1:1 relationship with customers. The basis for direct sales is customer data and the consistent storage and use of data. There are different and new forms of commerce for this - the important thing is to find the right solution for the company. Medium-sized companies must now follow suit and take the sale of their products into their own hands in order to reap the benefits. The goal is higher margins, more effective marketing, more loyal customers and success control.

It is not easy to break up the long-standing sales structures of dealers and intermediaries and the established communication approaches from marketing and to define a suitable strategy for B2B direct sales - our experts will be happy to support you in this. We will tackle the challenges of direct sales together with you!

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