Blog on business, strategy and digital transformation

Building an online vs offline business – sales

Building an online business is quite different from building an offline, ground based business. In many aspects – and that could be talked about a lot. The topic that is crucial for most companies, however, is sales. And this is what I would like to focus on at this point.

Selling in online business looks completely different than in the case of land-based business. And it is better to say this straight out. Building an Internet business involves organizing the sales department in a different way than in the case of a traditional business. Not only that, a seller operating in an online business should be a different seller, have different knowledge and competences than an offline seller.

But let’s get down to business.

Building an online business – B2B vs B2C business

The first and most important issue is the distinction between two types of business that we can run on the Internet. On the one hand, we have a B2C business in which, to put it simply, we direct our products and / or services to a wide range of non-business customers. On the other hand, we have a B2B business, where our services and products are targeted at business customers.

And now, depending on whether we are this or that type of business – the way we sell and organize the sales department should be different.

I will start with the similarities, then I will move to the differences.

What do B2B and B2C have in common?

It can be said with full conviction that the sales process in the B2B business is very similar to the sales process in the B2C business.

In the case of internet business, as well as in the case of a company operating in the traditional model, in order for sales to go forward, it needs marketing. Something must arouse the customer’s purchasing need, something must tell him about the existence of our products or services, something must build an appropriate image of these products or services. In short: we attract the client to the company through marketing or, more specifically, with a certain part of marketing, which is broadly understood promotion.

The only difference in marketing in the context of online business versus offline business is that in the case of online business, such promotion requires more financial outlays, continuous activities and promotion; and in the case of land-based business, such marketing may be reduced to an absolute minimum (e.g. printing an advertising sign or business cards).

Offline business sales

In the case of ground-based business, B2B or B2C, however, marketing plays a secondary role. Sales play a primary role.

Because once this customer is brought to a physical facility (at B2C), it should be sold. Or, when a customer becomes interested in specific services or products (for B2B), you should sign a contract with him and sell them these services, or simply sell the products.

In short: marketing helps to build a customer’s purchasing need, but it is up to the seller whether the sale will be successful or not.

Sales in online business

In a physical facility (most often) the customer is served by a seller, as in B2B, a human being talks or negotiates with the customer.

The most important difference between the sales process in online business and land-based business is obvious: on the Internet the seller is optional, this physical salesperson is not needed for happiness. Technology plays its role.

Both in the case of B2C and B2B companies, we need marketing to make sales move forward. And that’s a lot of marketing. These activities must be thoughtful, coherent and, above all, continuous.

But what about selling? What about sellers? This is where it gets interesting.

In the case of B2C online business, the seller is not only optional, but also (usually) unnecessary. Its role is played by technology or an employee of the support department.

For a B2B online business, the seller is simply optional. It may or may not occur. It can play a secondary role in relation to the role of marketing, but it can also play a role on a par with marketing and also be more important than marketing.

Now, I will discuss B2B internet business a little further.

B2B online business – what does the sale look like?

Building a B2B online business is a much more interesting thing, however. There are many “it depends” factors here, at least some of which are worth discussing here.

Let’s sum up to make it easier.

We have B2B online companies where:

The first model is very often found in companies focused on small customers, micro and small entrepreneurs; often focused on mass-oriented companies (large number of customers, low average value of the basket / purchases); often also in startups, where there is no money to build two teams. The sales plan in such companies is quite simple: load the promotion as much money as possible and devote as much time as possible to our website, so that customers will visit our website, register there, choose what they want to buy and make payments on this website. The customer does not have any physical contact with the seller. The role of the salesperson is taken over by technology.

The second model is a rather rare and in my experience it can be seen mainly where the management does not know yet which sales model in the company to choose or when it is in the process of transforming from a model without sellers to a model with sellers. I do not recommend maintaining such a model for too long, as it is too expensive and does not bring measurable benefits.

The third model is very often used in SaaS businesses. I also used this model, for example, in PayLane. In short: we use marketing to build the company’s image and sell to smaller customers (building mass), and we use sellers to sell to larger or more demanding customers (building a sculpture). Personally, I really like this model in the context of B2B online businesses, because, like in the first model, it allows you to nicely spread the risk and diversify the sources of income, and at the same time allows you to build scale faster, thanks to large shots, in the form of larger clients.

The fourth model works great primarily in businesses with enterprise-class clients; among the businesses with customers who are not very comfortable with technology; or in businesses where you need to spend a lot of time persuading someone to invest money in what we sell. The case with enterprise clients is probably quite clear. Or, for example, if I had to persuade people from poorly digitized industries to cooperate (let’s say hairdressers, beauticians, doctors, teachers) or if I were building an innovative technology that has not yet been tested in combat (if I were to build a rocket to send people to Mars, I would probably have to persuade my target group to take such a trip and convince them that it is possible at all, safe etc.).

I know companies that are very successful in various of the models discussed above and they work very well in their case. So it cannot be said that either of them is better or worse. There is no golden mean, nor one recipe for building an internet business. It is case by case. It depends.

Transforming your business from offline to online business

A very interesting aspect that is worth discussing is the transformation of the company from an offline company model to a hybrid company (offline + online) or from an offline business to online.

Especially in the context of sales and sellers. Suddenly it turns out that these sellers are unnecessary in the Internet business or need completely different skills and competences than in the case of offline ones.

I recently mentioned one such case, when faced with the coronavirus, sellers at my friend’s company decided to quickly switch from selling ground-based services to selling online services. I also mentioned there that if these sellers operate online as they used to do offline, they are doomed to fail.

I will tell you more about it.

Salespersons – the necessary competences and knowledge

It is impossible to list all the competences needed by an online sales representative. They often depend on a specific case, industry or even a specific company.

However, below I present the most universal and always needed ones.

Educating clients about online business

The ability to educate their customers should be an absolutely essential feature of any online salesperson. This is especially important when we are talking about offline business, which we transform in one form or another into online. Especially when it comes to sellers who are going from offline sales to online sales. Especially when we are talking about customers who have been operating offline so far, and the salesperson wants to persuade them to move their business online or open another branch of their business – the digitized branch.

Why is it so important? Because the vast majority of customers who have not dealt with online business so far have no idea how to do such a business. And the role of a salesperson is not so much to persuade him to try the Internet, but most of all to teach him how to do this business on the Internet.

And I’m not talking about learning how to operate such a business operationally, how to promote yourself, who to talk, how to go viral, where to appear and why. I am talking about the absolute basics that will make sense of introducing such offline business to the Internet and will give it more than 0% chance of, even minimal, success.

So what should such a client be taught?

Do you need more information?

I think that you will also be interested in remote work and doing business remotely. After all, building an online business and transforming an offline business to the internet has a lot in common.

Do you need more information? Let me know.



Subscribe:

%d bloggers like this: