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[00:00] Thank you. I'm very excited — with 400 people here, how many of you got the reference in the title right away? Great. And in order for it not to become an inside joke that destroys the entire talk: the title is based on the book The Hitchhiker's Guide to the Galaxy, a science fiction-satire about a universe that is illogical, surrealistic and frustrating bureaucratic. And that's by chance a pretty good description of B2B. I don't have time to go through everything that's hard with B2B, but there are three things I hope you'll take with you after today. Number one: B2B is a game where you prefer not to lose — not a game you necessarily win. This leads to people choosing what's safest, rather than what's actually best.
[00:0055] Number two: there are largely inexperienced buyers. Number three: up to half of those who are in a purchase decision are invisible — they do not visit your website, and do not engage with your product. But the secret is just understanding how these decisions are actually being made — don't hesitate to contact if you want to know more. I'm a little nervous. But it might sound surreal, so let's think about how big this is, because many people might think of B2B as a narrow niche. Think of the ecosystem around the box of toys, which buys camera and equipment to rig their studio, and Complete, with all the equipment they need to stream — what the ecosystem is worth about $1100 billion.
[01:48] Then I'm just talking about wholesale and wholesale sales within B2B. I think the figure, from SSB, is really twice as large as the retail in Norway. So that's a huge potential, and we're adding all the products that exist in the B2B world, this is a huge galaxy. From what I can see, the trend is that around 28 percent of this B2B turnover is happening digitally today. I can't find a very specific goal on it, but I think that's a good indication. So then there's a big question: why is it like that? I have borrowed some inspiration from the Hitchhiker Guide book: ‘In the beginning, the B2B buying journey was created. This has made a lot of buyers very much, and been deliberately protected as a bad move.»
[02:35] To dig a little bit in it, we're going to take a little trip back in time, see how it developed in the consumer market, and then in B2B. We went back to around 1850, to the early 1900s, you had the colonial store, with the merchant behind the counter, who directed all access to goods and services. As long as the customer didn't know what margin you had on the goods, you were the one who decided how much you took for them. Then we get a little further, to one of the great innovations of the early 1900s — we'll take it enough for granted today, but it was a huge innovation and revolution for customers. Now you could go around the store yourself, physically compare the price and characteristics of the products you evaluated, and make your decision.
[03:25] And so on, with the Internet and everything that's happened since — it's been an incredible journey with regard to the consumer side. In B2B, it has not been the same concentration around having a store. It has been also centered around the seller. Often the products are a little bit more complex, or the same product, but the volume of the purchase is so much larger that you would rather have someone to talk to. So before that, you had travelling door sellers, telephone directories, and the big marketplaces, conferences and fairs. Since there are larger amounts, and a little bit more complex and elusive processes, there's actually been a greater need for thoroughness here, for it to become more transparent. Let's see how it's happened — it's of course been digitisation within B2B as well.
[04:24] But what happened is that B2B digitized the seller’s toolbox — while the actual customer’s experience has not been very small. Let me describe how a typical B2B online store can be experienced: it's like getting into a large empty space with products set out, maybe with some cryptic specifications that are hard to understand. There is no seller ready to receive you — just a contact form you should fill in with lots of contact details, send in, and then go home. If you're lucky, you'll get an answer within 24 hours. So you might have two or three meetings before you even see the product. And you don't fill out the form correctly, they can never contact you.
[05:15] The problem here is that there are people, whether it's B2B or B2C, and most of us like to buy better than to be sold to. But what B2B has done is to force people to contact themselves as quickly as possible — although many reports and studies show that B2B buyers would rather do research on their own first. Another analogy here: it's almost like buying a dwelling based only on a prospectus. You get a lot of nice pictures in the booklet, but if you want to find out more — like power and electrical conditions — it's really little information to find. Then you get into a negative spiral: you want to do your own research, but the information is hard to find or completely incomprehensible.
[06:08] You will then have to contact a company, and 99 per cent of the time you end up in contact with a seller. There is nothing wrong with sellers like such, but the fact is that their income often depends on whether they sell or qualify you as a lead. There are two completely different incentives: the customer who only needs some more information, and the seller who tries to push you through the sales process as quickly as possible. And then this happens very often: the buyers become defensive, uncertain, and cancel the purchase. It's not surprising that Harvard Business Review finds that 40% doesn't make any decision at all. It doesn't mean they look at the product and say it's not good enough — it just means they don't relate to it. Amazingly much disappears from the B2B sectors due to a lack of decisions.
[06:58] If this had been a clean B2B conference, there would probably have been a little offended mines in the hall now. But I think many of you who work on e-commerce already think, "Here's what we're taking for granted that could have been done completely different." That's really something I hope more people take with us, because when e-commerce comes into B2B, I think we have to raise the level. And that's exactly what's happening now. But there are some basic mechanisms, which I mentioned initially, you have to know if you're going into B2B. The first is motivation to buy. We can pay for an expensive branded product to experience something. We can also buy something to have a good story to tell. I once demanded handmade shoes, specially provided for me.
[07:44] And then I tell everyone about it--I come home to Norway, I force everyone to admire what I've purchased. In B2B, however, they buy to avoid risks. Instead of "fear of missing out" it's about "fear of fucking up". It is in the back of the market and sellers within B2B. They often try to illustrate this with something called risk-adjusted value. Basically: if you don't do anything, you lose anyway. But what this model is saying, with the blue lines, is the value of four alternatives — not doing anything, or choosing options 1, 2 or 3. If you just look at pure value, the stupidest thing you can do is do nothing. But on the other hand, many of these options can also cause a clean loss.
[08:43] It could go wrong. Say I'm going to set up a recording studio in the Playbox, and I'm going to buy a camera that doesn't work with their PCs, fuck. Then it's safer to rather buy a Sony camera I know fits those PCs. That's the risk-adjusted thinking. But very often, the safest choice, when you have taken all the risk factors into account, is not to do anything at all. That's why you get the 40 percent we talked about. I think a better way to sum up that is the expression "nobody ever got fire for building IBM". Is there anyone in this room who's heard that expression before? No? Not exactly fun to hear, either.
[09:20] But it comes from a complaint from IT people and technicians in the 70s and 80s, who were frustrated that there was exciting new technology in data and telephony, but the buyers and managers always chose IBM anyway. If you choose the market leader, you make a safe choice — you will not get the blame if something goes wrong. So there are things outside of your control that are playing in here, and there's nothing you're doing wrong. Number two: in B2C we are generally informed and routine buyers. We know about what things cost. Some people try to sell you a Golf to $2 million, you know that it's not the right price — and if you don't know it, it's easy to find out, so you can do a good purchase. Within B2B you are less often actively dealing with those goods and services.
[10]:12] It's less often purchased, and so it becomes very unstructured — you don't have a fixed store with a firm way to buy things, it's person to person. It becomes an unstructured, liquid purchase and sale process. I think that's why there's a very big information requirement in B2B. And here there's an important distinction between content and information. In content you often get very good — you make customer cases, webinars, white papers, everything with the intention of creating attention and interest. But when the customer is interested, and for example, to include information further internally — which means a lot for both the budget and for his own job — there is often nothing left. Mostly nothing to find on the website.
[11]:04] So we're forced to talk to a seller, and there's a negative area where only about 60 percent gets through. I have experienced this myself in my career, with the loss of customers in a previous place I worked. The last point: you sell not to one person, but to a group, and half of that group is hidden. The most common claim about the main difference between B2B and B2C is that in B2C you sell to one person, who makes the decision on its own, while in B2B you have several decision-makers. And what's okay with B2B, according to a 2024 study by Bain & Company and the LinkedIn B2B Institute, is that half of these decision-makers are invisible buyers — they don't go into your website, you don't see who they are.
[12] It can be legal, financial or financial persons in the organisation — we cannot know exactly who they are, because they are not visible to us. But they have just as much to say when to make the decision. And here we come back to point one, about security. In that study, I saw that when the whole purchase decision is about a combination of known and unknown alternatives, you choose the safest thing — what the consequences don't get great for you if something goes wrong. If two alternatives are the same on paper, you pick what is most known, rather than what appears to be more risky. I experienced that myself in a previous job.
[13]:07] We sold AI-chatbots to customer service, and were very close to winning an agreement with a Credit Union in the United States. We lost our target, and in the feedback they actually said that we had been best produced on the paper. But they did not dare go to their boss, and his boss again, and say they were going to choose an unknown Norwegian player rather than IBM. And this is actually an interesting point in terms of profitability: buyers are willing to pay more for an alternative whole purchasing group can agree to choose. So the last point: the truth is that there's often an internal champion — a person who goes into the war for your product internally. This study challenges a little bit how much truth there is in it. It's not really about going to the war for your product.
[14:07] It's more about saying that the choice is safe. I think B2B is a power machine that's just waiting to be turned on. The customer journey is key. Most B2B sellers and marketers are simply not good enough on this today. There's an incredible amount to pick up, and I think people from e-commerce might help us get better at it. But to understand these basic mechanisms: remember that buyers will not risk getting blamed for a mistake. Then it is not necessarily a good idea to focus on what is best — the perfect functions. One of the most effective things you can do is work with perceived risks: prove that the delivery time is accurate and predictable, or that very few need to repair the product.
[15:04] Inexperienced and unstructured buyers with a large information need have a lot to learn about clearly distinguishing information from content. This does not mean that you should dump all the technical documentation on the website and make it boring — but it is important to be able to create a good, proper information base. Complexity is further increased by the fact that different roles in the same organisation often have completely different information needs — there is an additional layer of complexity there. But it should be possible to solve. The last point: remember the hidden buyers, and give them what they need. When they do not visit the website and do not engage rationally in this way, it is really about branding and knowledge building — a very own field of work I do not have time to do today. There are many good articles about this to find, for those who want to dig deeper.
[15:53] Please add me to LinkedIn — I have a lot I can send you if you are interested. But to distil it down to something concrete: for those who are not actively going to get into your product, much is about what is called the processing fluency from behavioral psychology. I know something, and others know the same thing, it feels like a safe and good choice. If I feel good about it, it feels safe and good. And I've seen the logo before, and it doesn't feel new and foreign, it feels safe and good. This might be three slightly weird things to bring, but they're not the only weird things with B2B.
[16:39] But that was my last reference to "Don't Panic" for today — please contact me or Frei if things get too weird in the B2B world. I just think it's incredibly fun to talk about these kind of issues.