According to the Abacus 2006 B-to-B Industry Insights Report, business-to-business marketers experienced a 9% gain in revenue over the past 24 months, spurred by a 2% increase in buyers with 13% more transactions. Offsetting the b-to-b gains was a 3% decrease in average order size. Nonetheless, all major categories on the Abacus B2B Alliance co-op database experienced growth.
The Internet has created a more price competitive environment, which may be a factor in decreasing average order value, says Elisa Krause, Ph. D., vice president of strategic accounts and analytics for Lafayette, CO-based Abacus. She says that retailers need to decide whether to play in the price war game or it they will develop a competitive advantage strategy that allows them to grow share in a more intense market place and stay true to their brand image.
“B-to-b marketers have the power to affect their strategies and customer loyalty by asking the right questions, such as, ‘Are my offers unique and specialized enough to differentiate me? Are my products focused on my core customer segments and by segment? Are my price points appropriate?’said Krause. “By tracking key performance metrics (KPI’s) associated with their business, direct marketers can continually evaluate the impact of merchandise, service and pricing strategies on customer loyalty and take the appropriate course of action to optimize performance.”