The opinions expressed by the contractor 's employees are their own.
For decades, marketers have relied on the four Ps (price, product, promotion, and location) as key elements of strategic planning. In 1960, E. Jerome McCarthy introduced the four Ps in his book Basic Marketing: A Managerial Approach , and they are still relevant today. But since the 1960s there have been major changes in the cultural landscape, culminating in the digital explosion during the pandemic. And that's why the fifth P, payments, has proven to be an essential part of the marketing mix in 2022. Customer journey improvements now span the entire checkout journey as shoppers want to be more transparent about their transactions using their preferred payment methods.
Today, there are more and more ways to interact with brands, especially online, and through their experiences with B2C companies, B2B buyers have increased their purchase expectations. In fact, 51% of professional buyers are attracted to B2B websites that offer superior user experience than B2C. So now is the time for B2B companies to modernize their payments. After all, B2B buyers are essentially traditional consumers and have higher expectations when dealing with brands they prefer and trust. The risk of ignoring the fifth P as a key element of the B2B customer journey is high.
Related topics: How digital wallets and mobile payments are changing and what this means for you
What B2C payments can teach B2B companies
B2C companies have already gone to great lengths to determine what shoppers prefer, and the answer is simple: fast, affordable ways to pay your way through a seamless, all-inclusive experience. So, B2C marketers already have a more established fifth customer journey, based on P.
Starbucks is a popular example – they offer many B2C payment methods including cash, Apple Pay, credit cards, debit cards, Google Pay, Samsung Pay, PayPal and Starbucks cards alongside their popular app. In fact, Starbucks' mobile checkout app, launched in 2009, is designed with its customers' checkout journey in mind. The app had the most users of mobile payments in the United States until recently. Today, Starbucks has 31.2 million loyal in-app customers who love the multi-channel payment method, second only to Apple, which has 43.9 million mobile payment users.
Starbucks pioneered payments to increase customer loyalty by effectively influencing marketing outcomes without changing product, price, location, or advertising mix. Now consider that corporate buyers are also coffee consumers. It's easy to see how they were influenced by Starbucks and other B2C innovators, bringing this expectation of transparent payments to the business world.
Also see: How fintech and payment innovations will disrupt global e-commerce
Credit cards are not preferred in B2B
Thanks to the existing merchant services of many sellers, credit cards are the typical default payment method in digital B2B transactions. But credit cards are often not the best payment method for B2B purchases. Although more than half of B2B shoppers use credit cards to shop online, Why More Payment Options Mean More Purchases data suggests that is not the case: 50% actually prefer to pay using methods other than credit by credit card, if this is granted. . Because of this, retailers who only accept credit card purchases risk losing out to competitors who offer more desirable payment alternatives.
Today, 90% of B2B buyers research payment options before buying from a new supplier. Thanks to their experiences as consumers, they are much smarter than they expect to pay. Now is the time for B2B companies to modernize their payment options and move beyond credit cards. Building a payment strategy for the complexity of B2B purchasing can require significant investment. This requires an elegant and sophisticated trade credit offering and net invoicing across all channels. The investment can pay off, however, as 15% of B2B shoppers spend more when trade credit is offered, according to the same TreviPay study. More importantly, 82% would choose one provider over another if that provider offered cash settlement with 30, 60, or 90 day terms.
Related: Will 2022 Mark the End of Traditional Credit Card Payments?
B2B payments require more than just a B2C-like payment method
The behind-the-scenes installation is complex for B2B payments, with billing options, payment terms, and all the data required for the power-to-pay and enterprise resource planning platforms to capture bills easily. This complexity is compounded by the urgency: Today's B2B buyers want their preferred terms and they want it delivered locally.
According to Forrester Tech Tide 2022 , the growth of B2B payments is becoming increasingly important to companies' ability to attract, serve, and retain business customers. Offering trade credit and net forward invoicing, automated onboarding, instant decision making, and A/R scanning are all necessary to make the B2B experience for the B2B buyer as easy as a B2C eCommerce transaction. A quick decision qualifies and secures more buyers with the right payment terms and trade credit lines, building a network of loyal buyers.
B2B organizations considering a 5P strategy should consider: B2C-style payment acceptance methods; digital and mobile shopping; Payments, billing and invoicing in one central place; invoicing, reconciliation and reminders; sophisticated risk management and fraud detection; more working capital for buyers; and integrations with a variety of technology providers.
Fifth P offers customer-centric benefits that the entire organization must support
A new payment solution affects almost every department in one way or another. When the focus is solely on the benefits of the finance team, progress can slow when dependencies span multiple lines of business. Instead, leadership should focus on customer-centric benefits that everyone can enjoy. These benefits include providing customers with consistent quality service and support throughout the customer journey, creating a virtuous circle of repeat purchases.
Many companies invest a lot of time and energy into improving the buyer's journey, but suddenly stop at checkout. The truly customer-centric journey continues in the fifth P, and previously siled teams must work together to bring digital payments and invoice transformation to life or risk losing to the competition.