With the appearance of ecommerce, B2B negotiation of price transforms into the pricing quote, which is processed online at a much faster rate and convenient manner for both buyers and sellers. Especially in Magento 2, requesting a quote is a crucial function that directly affects your sales.
Let’s find out why it’s that important, as well as are there any possible strategies/tips to drive your sales higher via B2B quotes!
The Quote Negotiation Needs: B2B vs B2C
Table of Contents
If you used to be an entrepreneur, you would surely understand that the quotation needs of negotiation between B2B and B2C customers are vastly different.
1. Purchasing purpose
CHECK OUT the B2B eCommerce trends of the year-to-come for better preparation!
The first and foremost difference between B2B and B2C customers is their purchasing purpose. B2C customers want the product to be used to help solve their needs.
Therefore, as long as they believe your product is working as intended, mostly there aren’t any troubles that would occur in the buying process. It would be a fast and painless experience.
On the other hand, B2B customers want to redistribute your products to those in need and get profit from these products.
If they believe your products couldn’t help them increase their value as expected (the cost-benefit is under-valued), then a price negotiation or B2B quote is expected to occur.
2. Quality & quantity
In B2C scope, because of the small buying quantity and (mostly) average quality, B2C customers won’t need to negotiate much about the price.
In addition, since most of the product detail is already listed on the page (price, size, color, material, etc.), the need to request a quote for B2C customers is even smaller.
On the other hand, the quotation is highly significant for B2B customers. Because of the nature of buying in bulk and having rigorous product quality criteria, orders made to store owners will frequently be accompanied by a pricing statement, as is customary.
Moreover, if there’s any difference in quality demand (for example, the product quality does not meet the expectation of customers), the B2B negotiation would be even longer and more irritating.
3. Promotion & discount
>>> READ NOW: Master 4 Magento Wholesale Pricing Strategies To Maximize Profit!!
Usually, B2B customers would ask for a discount based on percentages or the number of purchases given.
Sometimes, the discount they asked for would be ridiculously high, which required more intention to discuss for an appropriate price.
Because of all the above reasons, the quotation is much more important in B2B than B2C.
B2B Quote System: Top 5 Features in eCommerce & Magento 2
1. Combination of B2B Quote & Hide Price/Call for Price function
Many B2B businesses intentionally hide product prices from their e-commerce sites. Of course, this action is intentional.
Price hiding helps to reduce price comparisons between customers and competitors, and at the same time provides an opportunity to implement a flexible pricing strategy.
Magento 2 Hide Price and Call for Price extension by BSSCommerce is such a type of software. Our extension provides you with lots of hiding price options, allowing you to hide price in not just specific pages but for the whole category as well.
However, just hiding the price is not enough.
Not all customers are happy with hidden product prices. Hide price also limits your chance of meeting potential customers.
In order to minimize the limitations of price hiding on the customer access process, you need to use an appropriate quote system for B2B customers.
Our Magento 2 Quote extension is already a compatible solution. Then, what are your choice?
2. Enable the “Request for Quote” button on product pages
Even if you don’t use any hidden price function, a request for quotation is still a great tool to be implemented in your eCommerce/Magento 2 website.
By using a reasonable quote system, you can enable a “Request for Quote” button on your product page or any specific category.
The request for quotation button would help you localize your website visitors to a customer group that actually cares about your products or expresses the desire to buy them.
This segmentation method would help you put more sales effort into this specific customer group since they are actually looking for purchasing options.
Since the default Magento 2 doesn’t have a quote function, BSSCommerce brings up Magento 2 Request for Quote extension as a definite solution in enabling quote requests for products.
>>> EXPLORE the TOP 10+ Tips For Better Request A Quote Of Price On ECommerce!
Magento 2 Request a Quote has quite a number of impressive features for the website admin. To name a few, they are:
- Enable “Add to Quote” per product or for all. Same for categories.
- Choose customer groups to allow “Add to Quote”.
- Define minimum quote per group of customers.
- Manage the quote requests: approve/reject or customize.
For customers, they can:
- Add multiple products to the quote cart.
- Get updated via emails on all submitted quote requests.
- Convert quote to order and checkout in clicks.
- Re-submit quotation of your choice.
3. Allow non-login guests to contact store owners
The fact is that only allowing logged-in customers to send quotes extends the distance between your products/brand and your potential customers.
B2B customers are businesses. Same as us, most of them are pretty busy and won’t take the time to create an account per website just for pricing reference.
Yet, they also express an interest to look at the price since your product definitely meets their needs. They want to ask about your price and bargain for it.
No doubt, they are potential customers!
Therefore, by allowing guests or un-login customers to send quotes directly to the store owner, we increase the pool of our potential customers and get more possible leads.
4. Let customers customize all quotes in their liking
Whether it’s B2C or B2B customers, it’s not uncommon to change your pricing decision after discussing it.
Especially the buying decision from B2B customers isn’t made or responsible by a person but is usually a whole group of people.
Therefore, B2B clients will spend a lot of time checking and calculating before/after placing an order. In fact, it would be easier for them to have some freedom in managing and re-adjusting their quotes.
To make it convenient for customers, some quotation systems allow customers to manage all quotes that have been sent as well as modify them as needed.
The Request a Quote extension by BSSCommerce also allows B2B clients to manage all quotes in My Account and freely customize them if needed.
5. Notify requests for quotes automatically
Any customers would want to receive a response as soon as they send a quote request to the store owner.
Yet, are you sure to be always on duty just to give them a reply in time?
In addition, there are cases when you receive difficult requests for quotes. To answer satisfactorily, you’d love to have extra time for discussion with your supervisors or colleagues.
Unfortunately, speed is one of the key factors to ensure maximum profit. The slower your response to quote requests, the more likely you will let potential customers fall into the hands of your competitors.
Therefore, an automatic quote reply system definitely helps a lot.
That is only in case you could handle one. Most automatic quote reply systems are costly and only appropriate for enterprises or large businesses. An automated notification system would be a much better cost-effective choice for small businesses.
In that case, Magento 2 Request a Quote extension meets your needs by implementing an automatic email notification function.
Whenever there’s a new request or updates of already received quotes, a notification would appear, and at the same time, an email would be sent to your inbox. There’s no guarantee that you won’t miss these emails, but that way, you’d be notified of the response in time.
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Price B2B Negotiation: 3 Secret Quote Strategies
There are a number of strategies for B2B negotiation of the price that could be easily applied to the B2B quotation process.
Let’s take a look at the top 3 strategies that work best in most cases!
1. The opened final price strategy
If you’ve ever deployed a quote system on your online store, you’ve probably received quote requests of discounts from B2B customers.
For example, the customer requests a quote with the idea that you should give him a specific percentage of discount for the number of shirts he’d purchase.
If the discount percentage looks reasonable, then it’s nowhere near a problem. Yet, the ugly truth is that typical customers would always give a high number first then lower it as the conversation goes.
Naturally, we should reply to the customers right away to close the deal as fast as we could. But in this case, instead of accepting immediately, take your breath and think first.
Is there a way to minimize the discount and maximize the profit appropriately?
Yes, there is. Just turn your response into an announcement!
An example response would be “This shirt has a certain price range from the lowest price at A to the highest price at B. Let’s see if we can make it profitable for both parties!”
Here, let’s define A as the average acceptable product price that satisfies both your expenses and near-minimum profit margin. B will be the higher price you think the deal will be made here.
If your customer refuses to buy your products at price A, they are not a suitable customer for you.
>>> TRUST ME! You shouldn’t MISS OUT on this complete guide of B2B Pricing Strategies & Models!
2. The fail-to-purchase result strategy
For B2B, the outcome of every B2B negotiation is a very attractive variable.
It could be the overview of the cost-effectiveness picture, the amount of possible conversion and sales, the reductions in cost in production and shipping, etc.
Surprisingly, it’s none other than the customer’s own expectations that inadvertently become an effective weapon for store owners to easily approach, motivate and manipulate them to make buying decisions.
To make the most use out of this strategy, it’s required that as soon as you receive a B2B quote from your client, you need to find out more information regarding their business.
At the same time, to achieve an effective negotiating process with B2B customers, after product getting purchases, you need to estimate or figure out the following metrics in specific numbers or percentages:
The increasing revenue of B2B customers:
- New potential customers.
- Possible orders/purchases amount.
- The increasing value of brand loyalty.
The reduced expenses for B2B customers:
- Shipping/production cost.
- Customer acquisition cost.
- Inventory.
With the suggested metrics above, you can customize, remove or even add other relevant ones that fit your customers.
The importance is that you have to make your calculations look reasonable enough to turn this B2B negotiation into a great bargain for you.
Usually, people are much more motivated by avoiding loss than by gaining profit.
A simple tip is that you should try to make it look like your customers lost the possible income because of not buying your products.
3. The benefit-exchange discount strategy
Did you know that in most cases, even though you have already quoted an exact price, your B2B customers still ask you to give them a higher discount?
This situation happens quite often, but not all businesses can achieve a solution that satisfies both parties.
Even worse, the customers would issue a warning that if you don’t lower the price, they won’t buy from you anymore.
Example: “If you don’t agree to give us a 5% discount then the deal is over!”
What would you do in this situation?
Whatever it is, it’s time to stop getting angry and think carefully.
In most cases, the psychology of B2B customers is that they want to check if the given price is truly the best price you got.
If you agree right away with their discounted price, they will somewhat think of you as dishonest, and that they haven’t reached the most profitable price.
Furthermore, they will continue finding ways to lower prices even more.
Then, how to react appropriately?
Experts suggest that you should not agree with the price given by the customer. Instead, try to comfort them that your price is already the best possible price, and apologize that you cannot give them more discounts.
In rare cases, customers would continue to plead that they don’t have enough money to buy from you.
If you must, try to agree with their discounted price (only if it’s reasonable and still somewhat a bargain for you) and state the condition that in return, the customer must trade that price for something else.
Example: “I can only give you that price in the condition that your shipment would arrive later than usual because of the cheaper shipping service.”
>>> Should or shouldn’t we use Hide Price In ECommerce in B2B Or B2C ecommerce? CHECK to find out the answer!
Conclusion
In addition to sending you 5 ways to boost sales from quotation to B2B clients, we also suggest 3 price B2B negotiation strategies to maximize your profits from experts.
Don’t forget to try them out and send us your case study! We’d be absolutely delighted to see your result.
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