Quick Take: Making smart suggestions
B2B innovators can use the concepts of proximity and serendipity to deliver more solutions and create greater value for customers; are you ready to learn how?
In pursuit of value
This Quick Take was posted first in the B2Best newsletter published by Factrees, a networking marketplace founded to connect manufacturers, reps, and distributors as sourcing partners. I write there hoping to reach innovation-minded B2B practitioners—and it is working! At the end of this newsletter, I share an exciting conversation about ideas for applying proximity and creating new and unexpected customer value.
Why proximity matters
Proximity is a revolutionary metric for fixing the broken supply chain.
Proximity is the use of technology to drive the production and provision of services and products ever closer to the moment of demand. Proximity means that when a need emerges, it is met. When a question arises, it is answered. When frustration happens, a solution is offered. Supply and demand are aligned instantly, most often through the magic of digital technologies.
In the supply chain, context is everything. Business customers buy how they want to buy for the specific need at every purchase, and they feel free to switch their requirements from purchase to purchase without notice. Business buyers do not have a persona; they have a dissociative identity disorder!
This reality has critical implications for B2B innovators, meaning there is no one way to measure proximity. As I first discussed here, proximity is a North Star, to be measured differently across every business-customer purchase occasion:
Convenience. When buying convenience, business customers buy familiar brands with only a quick check for price, performance, and new features or benefits.
Price shopping. The name says it all, and price shopping is about aggressive price checks with decisions judged against price, landed cost, or total cost of ownership.
Spot buys. Spot buying is about taking advantage of momentary low prices, often created by market conditions or supply chain fluctuations.
Solutions. Solution buying involves solving a problem or executing a project and often includes bundled or coordinated buys of products and services.
Customization. Similar to solution buys, custom purchases are made when a business customer requires specific product or service configurations that are not widely available and, in some cases, non-existent or reliant on collaborative product development or service design.
Projects. Buyer needs require delivery of products and services over an extended period, delivered by multiple companies in the value chain, to achieve a specific goal or outcome.
Replenishment. Replenishment buys are often predictable or pre-planned purchases against an established operational timeline or sequence of events. They can include products purchased as input for OEM products or items needed for maintenance, repair, and operation of customer plants and facilities.
Emergency. Businesses buy products and services in response to (or preparation for) “acts of God” that might include fires, floods, extreme weather, geopolitical conflicts, and more.
The test of the most potent new ideas is that they achieve results outside the normal range of what is achievable by the established system, the way the supply chain works today. Mindsets, practices, and policies are entrenched and will forcefully resist change. Change can come from the middle, driven by reinvented roles for intermediaries, but only if the overall system wakes up to embrace new commerce methods.
As discussed in my first article in the B2Best newsletter, the next wave of B2B disruption is not about displacing incumbent players in the supply chain. Going forward, progress is about collaboration.
Can proximity give direction to collaborations with emerging B2B platforms? I think yes, and have written so:
After Amazon Business, B2B marketplaces seem to have hit a wall. Collaboration-minded digital startups are finding it challenging to build B2B relationships. Distributors balk at putting their products in a buy box with competitors. Manufacturers wonder if they can go it alone and not rely on an upstart marketplace to achieve dreams of differentiation. Neither party wants to give away hard-earned customer loyalty and profit margins without truly new created value.
A fresh approach to proximity may be the solution. Marketplaces built around accepting orders in a buy-box environment may fit convenience, price shopping, and spot buys. I suspect that a marketplace (or market network) built for any other buying situations (described above) would offer a very different business customer experience, one with the potential to strengthen collaboration between distributors and manufacturers rather than stoking conflict.
How serendipity can help
Talking about proximity led to a discussion about near-field communications and recognition. The idea is that your smartphone can communicate with other devices, letting them know you are nearby. Once notified, retailers may look up your history and suggest purchases or deals you might not notice. In one of the best outcomes, a contractor might shop in a big box hardware store for one project and be reminded about something needed for another. This is a version of proximity, but one with an added dash of serendipity—the contractor's unmet or forgotten need might not have been met were it not for a timely reminder.
I can imagine even more robust scenarios in B2B, enabled by a distributor's (or manufacturer’s) very rich and detailed understanding of customer operations, projects, plans, and strategies. The prompt enabled by near-field communications might happen as a customer visits a distributor's store or when a salesperson meets with a customer in the field. Leading distributors are already using artificial intelligence (AI) to suggest purchases, and smart suggestions might be provided in the same manner as the contractor example above.
But distributors are also using AI to suggest conversations, essential topics that a salesperson, customer service rep, or leader might have with customers. In these cases, a reminder provided by near-field communications might not be related to purchases but, instead, a prompt to discuss business strategies, supply chain disruptions, project management innovations, and more.
Proximity is the pursuit of value by ever-shortening the time between a moment a customer recognizes a need to its fulfillment. Serendipity is an “unsought, unintended, and/or unexpected, but fortunate, discovery and/or learning experience that happens by accident.” By adding the pursuit of serendipity to proximity as a goal for B2B innovation, the future of distribution can go beyond meeting needs to creating unexpected value, delighting customers, and redefining what is possible in the digital age.
Your take?
Have you heard of proximity? Near-field communications or recognition? Do you see possibilities for reinventing our broken supply chain? Let me know. Please share your comments below or reach me at mark.dancer@n4bi.com.