DIFFUSION OF THE MARINE SALES PROCESS
“B2B companies that ignore e-Commerce demand will soon become irrelevant in the market and eventually be eliminated from the e-Commerce ecosystem altogether.” ~ Archanaa John
The theory on the Diffusion of Innovation explains how trends occur and why societies adopt certain technologies. Why this theory is important to companies introducing new products, because it may warn them of the likelihood of success or failure of a product. More importantly, it may lend likelihood to the survivability of a business.
Diffusion researchers believe that a population can be broken down into five different segments, based on their propensity to adopt a specific innovation: innovators, early adopters, early majority, late majorities and laggards. Each group has a personality, it’s own attitude with regard to a particular innovation.
- Innovators (2.5%) — Dangerously idealistic, however, change never happens without their energy and commitment.
- Early Adopters (13.5%) — Perceived leaders, once benefits apparent these users are the cheerleading gatekeepers to the majority.
- Early Majorities (34%) — Mainstream followers, won’t act without solid belief of benefits and “industry standard”.
- Late Majorities (34%) — Fearful lemmings, hate risk and only react based on fear of not fitting in.
- Laggards (16%) — The bitter end, stressfully holding out until there is no other option than to join.
“As exemplars of success, traditional firms such as Dell, Cisco, General Electric, Wal-Mart, and Charles Schwab, along with firms “born on the Internet,” like Amazon and eBay, have shown the potential of e-business to enhance customer services, streamline internal operations, and improve interfirm coordination” (Straub et al. 2002). Zhu
The Diffusion of Innovation is relevant and a vitally important topic with regard to where you stand as a professional and your organization’s position on business-to-business (B2B) e-commerce within today’s evolving Marine Industry.
Forrester Research issued a report (March 2015) projecting manufacturers and distributors United States B2B e-commerce sales to topple $780 billion in 2015. By 2020, United States B2B ecommerce sales will be an estimated $1.132 trillion. Today, let’s go overseas for a moment to the Netherlands to look at the success of an Innovator. Royal IHC which does more than $100 million in total annual sales, is sailing towards processing 7% of sales through their web portal on dredging and maritime equipment. Up 5% over 2014 web sales.
Why is e-commerce sales important to business-to-business buyers? Because the Omni-channel customer is now the most valuable customer! Customers expect to interact with you on their terms- 24/7, face-to-face, on the phone, online, in the way that is most convenient for them, when they want to engage. Give them choices, today’s customers will respond with more business.
According to a Forrester survey of 236 B2B buyers…
- Approximately 75% prefer buying from an e-commerce site rather than buying from a sales rep.
- 93% prefer to buy online once they are sure what they want to buy.
As a result of B2B buyer expectations with regard to their purchasing experience, manufacturers and distributors must become more customer-friendly and interact through a variety of channels at any time. Since the customer relationship is long-term, the benefits of keeping them happy are going to be enormous.
What does a B2B e-commerce mean for your company? Moving more professional buyers online than through phone, email, fax or other offline channels creates more valuable opportunities for your sales team to focus on high-end clients, cut your operating costs by processing more sales to customers through self-service e-commerce and electronically process orders faster.
“60% of B2B companies report that their buyers spend more overall when their customers interact with multiple channels.” (Forrester)
In 2014, the US Shipbuilding (commercial boatbuilding included) Industry reported $22.1 billion in revenue. 31.1% of this revenue segment is non-military vessel shipbuilding (barges, offshore oil platforms, dry cargo ships, bulk carriers, passenger ships, ferries, tankers, fishing vessels and industrial vessels). Furthermore, the four largest shipbuilding players account for 77% of industry revenue. And purchase expenses account for an estimated 45.8% of industry revenue ($10.12BB). The US Shipbuilding industry is influenced by four key external drivers; … (more on this topic in the next post)
Here’s the reality, the current price for a barrel of oil is putting the hurt locker on all marine businesses- engineering firms, shipyards, vessel owners, manufacturers and distributors within the Marine Industry. The industry is beyond the innovator segment and many organizations need to determine their relevance today as an early adopter to win customers 1–2 years away, especially within a tight purchasing pie. B2B e-commerce is here to stay. By 2020, approximately 30% of professional B2B industrial purchasing will take place online, in the US $1.123 trillion and globally $6.7 trillion.
Manufacturers and marine distributors, if they haven’t already, must take a hard look at how they can best meet the needs of their customers in a digital world. Forrester Research e-business analyst Andy Hoar says, “budget between $300k — $2 million for B2B and B2B implementations. Plus $10k-and-up for monthly license and support.” Talk to me today and I’ll show you a more affordable platform because B2B e-commerce for the maritime industry is here to stay.
If this article was helpful to you, please spread the word and share with colleagues.
What would giving customers 24/7 access to your brand mean? How much impact could that make on your bottom line? What would it mean to turn up the switch 10%? If you made it that much easier for them to engage with you, how much more shelf space could you capture? How much more commitment to your brand can that create? Share your thoughts.
Chris Stuckey — Grew up along the banks of the Ohio River in Indiana. At 18 years old, moved to New Orleans to study Naval Architecture & Marine Engineering at the University of New Orleans and worked as a NAME in the Marine Industry for several years. Today, Stuckey is the Founder of Maritant.com. His mission is to help network Marine Industry professionals and streamline communication efficiency for marine businesses excited about the future success of the Shipbuilding Industry.