Building an online business vs. offline – sales


building an online business

Building an online business is slightly different from building an offline, on-the-ground business. But what really makes businesses tick? The answer lies in one word: ‘sales’. Let’s shine a spotlight on the crucial role of sales in the world of modern business.

In reality, conducting sales in an online business differs significantly from a brick-and-mortar establishment. It is essential to acknowledge this diversity upfront. Building an online business involves organizing the sales department differently than in the case of a traditional business. Furthermore, a sales professional operating in an online business should possess distinct skills, knowledge, and competencies compared to their offline counterparts.

Building an online business – B2B vs. B2C

The first and most important factor to consider is the distinction between the two main types of online businesses. On the one hand, there is B2C (business-to-customer) commerce, where the main target audience is private customers who are not business customers. On the other hand, there is B2B (business-to-business) commerce, where the target audience is other businesses. The way we approach sales and organize our sales department should depend on whether we are a B2C or B2B company. What are the similarities and differences between the two?

What do B2B and B2C have in common?

It is safe to assert that the sales process both in B2B and B2C businesses is very similar. In the realm of online business, as in traditional brick-and-mortar models, successful sales rely on effective marketing. This is because something must stimulate the customer’s desire to make a purchase, inform them about the existence of our products or services, and create a positive perception of those offerings.

In brief, we use marketing, particularly a key aspect known as broad promotion, to draw customers to the company.

B2B vs. B2C – sales

In traditional brick-and-mortar business, whether B2B or B2C, marketing plays a secondary role. The main role is sales. After all, once the customer is lured into a physical facility (in B2C), a sale should take place there. In B2B, when a customer expresses interest in certain services or products, this should lead to the negotiation and conclusion of a contract for the sale of those services or products.

In short, marketing helps cultivate a buying need in the customer, but it is ultimately the responsibility of the salesperson to either close the sale or not.

B2B vs. B2C – sales representatives

In a physical establishment, customers are typically assisted by a salesperson. Similarly, in the B2B context, a human sales representative participates in discussions or negotiations with the customer. However, a fundamental difference between the sales processes in online and offline businesses becomes apparent. On the internet, the presence of a physical salesperson is optional, as technology can fulfill their role.

But what about sales? What about salespeople? This is where things become interesting. In the case of a B2C online business, a salesperson is not only optional, but often simply unnecessary. Their role can be performed by technology or a support staff member.

In B2B online businesses, the role of a salesperson is optional; they may or may not be present. They can take on a secondary role to marketing, or be equally significant or even more important than marketing.

Now, with regard to B2B online businesses, let’s explore this topic in more detail.

B2B online business – what does sales look like?

Building a B2B online business is a fascinating topic, as it involves various ‘it depends’ elements, some of which are worth discussing here. To begin, let’s summarize:

  • Some B2B online businesses conduct marketing without physical sales representatives.
  • Some B2B online businesses use both marketing and sales, with marketing playing a dominant role.
  • Some B2B online businesses utilize both marketing and sales equally.
  • Some B2B online businesses employ both marketing and sales, with sales representatives having a crucial role in the sales process.

The first scenario is common among customer-oriented small businesses, microentrepreneurs, and often in mass-oriented companies with a large customer base and smaller purchase value. Startups also tend to adopt this model because there is no money to build two teams. Their sales strategy is straightforward: invest heavily in promotion to attract customers to their website, where customers register, select products or services, and complete transactions without physical interaction with salespeople, as technology handles the sales role.

The second scenario is relatively rare in practice. It is typically seen in situations where company executives are unsure about the optimal sales model, or during a transition from a salesperson-free model to one with sales representatives. I rather do not recommend maintaining such a model for too long. It is too costly and does not bring visible benefits.

The third model is frequently employed by SaaS (Software as a Service) businesses and is also used at PayLane. In essence, we utilize marketing to establish the company’s brand and drive sales with smaller customers, essentially building a broad customer base. Meanwhile, salespeople are assigned to engage with larger or more demanding customers, effectively sculpting the customer portfolio. Personally, I find this model particularly effective in the context of B2B online businesses. Similar to the first model, it helps reduce risks, broaden revenue sources, and enables faster growth with larger clients.

The fourth model is most effective for businesses dealing with enterprise-class customers or those serving customers less familiar with technology. It is also suitable for businesses where convincing customers to invest in your offerings requires substantial effort. For instance, with enterprise customers, the approach is straightforward. Other examples include convincing people in less digitized industries like hairdressers, beauticians, doctors, or teachers. It is also applicable when developing untested innovative technologies. For example, building a rocket for space missions, where persuading potential travelers of its feasibility and safety is a significant task.

Many successful companies use these models, and they work well for them. There is not a one-size-fits-all solution for building an online business. It varies from case to case; it depends on the circumstances.

Company’s transformation building an online empire

An intriguing aspect worth discussing is the company’s transition from an offline business model to a hybrid one (offline+online) or from an offline business to an entirely online one. This transition is particularly relevant in the context of sales and the roles of salespeople. It becomes evident that in the world of online business, salespeople might be unnecessary or require entirely different skills and competencies compared to their offline counterparts. In response to the COVID-19 pandemic, salespeople shifted from selling physical services to online services. If these salespeople continue to operate online as they did offline, they are likely to encounter significant challenges. 

I may provide further details on this topic later.

Vendor, and building an online business – needed competencies and knowledge

It is challenging to create an exhaustive list of competencies required for online salespeople because they often vary depending on specific cases, industries, or companies. Nonetheless, there are certain universal competencies that are consistently essential:

  • The ability to identify potential customers, profile them, and assess their online potential is essential. Not every business model is suitable for the internet. Of course, the neighborhood grocery store in my area can also thrive online and generate significant revenue, but perhaps not through the traditional online vegetable store model.
  • The ability not to pressure customers into using services they do not need is a universal skill. It is essential in any type of business and industry. Unfortunately, often it is not being practiced. If a customer lacks knowledge about selling online, pushing them into the online realm is counterproductive. The salesperson will waste their time, and the customer will lose money, ultimately eroding trust. In the long run, it will not have positive results (except, of course, the erosion of the customer’s trust). This highlights the importance of the education mentioned below.
  • Personal branding skills are essential. It is often said that if someone is not present on Google, Facebook, LinkedIn, Twitter, or Instagram, they may as well not exist. While this saying may not hold true in the physical world, it is highly relevant on the internet. Personally, I would not purchase any online service from someone I can not find online. Moreover, I would hesitate to engage with someone on the internet if I find them engaging in trolling or other inappropriate behaviors. Building a personal brand does not necessarily mean becoming an expert in a specific field. Instead, it is about demonstrating your presence, showcasing yourself as a ‘normal’ person who knows how to navigate the internet and actively engages with it. This online presence is of utmost importance.
  • The ability to communicate through various communication channels is crucial. Traditional offline salespeople typically rely on face-to-face meetings, with the more experienced ones often scheduling phone calls beforehand. In the digital age, offline methods do not always apply in online business. Customers are dispersed across different platforms, and it is vital to engage with them where they are. Phone calls may be effective at times, but not always. Similarly, email may work in some instances but not in others. Effective communication might involve LinkedIn, Facebook, Instagram, or other social media platforms. At times, leaving a comment on a blog, engaging on Snapchat, sending a tweet, or utilizing other modern internet channels can also be important.
  • The ability to research and adapt to customer preferences is crucial. Just as before, each customer is unique with their distinct preferences. Especially when it comes to contact methods and communication styles. Many customers prefer not to meet in person, as there are alternatives like email, videoconferences, and teleconferences available. In the online world, business and sales are conducted remotely, acknowledging that ‘online is online,’ and these interactions can occur at a distance.
  • The ability to avoid making multiple calls within minutes of the first call is essential. This is a common and annoying practice among many offline sales representatives. If someone did not answer the phone initially, it is usually because they can not or do not wish to engage in a conversation at that moment. Repeated calls within a short time frame not only fail to elicit a response, but often have the opposite effect – they deter people from returning the call promptly when someone is finally available. In the realm of online business, one significant characteristic is a focus on personal productivity and the use of various methods to enhance it. However, a ringing phone disrupts current focus and requires people to dedicate time to the caller precisely when the caller has time, not necessarily when the employee does. To manage this, it is recommended to activate ‘do-not-disturb’ mode on the phone after 2 p.m. and limit email responses to once or twice a day. Many online business professionals have their own strategies for optimizing productivity, and repeated phone calls in quick succession can be counterproductive at best.
  • The skill of following up through various channels is paramount. Most adept salespeople recognize that regular follow-up is of utmost importance. However, when it comes to online sales, it is essential to understand that follow-up can take many forms and should often be diversified. Sending another email may not always be effective, especially if someone receives hundreds of emails daily. Similarly, making another phone call may not yield results if the person does not answer calls from unknown numbers. So, how about engaging by commenting on the person’s blog post? Consider sending a private message on Facebook or sharing a retweet with your own comment on Twitter. Or perhaps exploring alternative approaches? Once again, the ability to communicate through different channels is crucial.
  • Reverse engineering. Valuable form of salesmanship, worth using during a talk to a partner or client. There is no stronger sales argument than finding and presenting a specific use for our product or service in our client’s business/product/service.
  • The skill of educating others. Especially customers, is worth emphasizing, particularly when addressing the transition of a business from offline to hybrid or online.

Building an online business is definitely more than what has been presented. Let’s delve deeper into this topic.

Educating customers in online business

An absolutely indispensable quality for any online business salesperson is the ability to educate their customers. This becomes especially crucial when we’re dealing with an offline business transitioning to an online format. It is particularly relevant when discussing salespeople making the shift from in-person sales to online sales, and when dealing with customers who have primarily operated offline. The salesperson’s objective is to guide them in transitioning their business to the online sphere or establishing a digital presence.

Why is this so important?

Because the majority of customers who haven’t previously ventured into the world of online business often lack the knowledge to navigate this digital landscape. The role of the salesman isn’t just about persuading them to give the Internet a try; it’s primarily about teaching them how to effectively engage in online business.

It does not mean teaching them how to operationally run such a business, how to promote themselves, who to talk to, how to make virals, where to appear and why. I am talking about the absolute basics that will make the entry of such an offline business into the Internet make any sense and have more than a 0% chance of any, even minimal, success.

So what should such a client be taught?

  • As challenging as it may be to find an industry unsuitable for the internet, success is not guaranteed in every case. The right business model must be carefully considered. Let’s take the neighborhood vegetable shop mentioned earlier as an example. Does anyone truly believe that if I encourage Ms. Smith to open an online store with the same assortment of products as her neighborhood shop, without teaching her how to promote it, will she achieve any success? And if I also require Ms. Smith to invest, for example, 1,000zl per month to maintain this store? Not only will Ms. Smith incur significant financial losses, but as a salesman, I will also lose her trust because I persuaded her to pursue something that does not work. No. When a salesman convinces someone to venture into online sales, that person should also learn that it is an entirely different kind of business, with different operations and sales strategies. They should also gain insights into what is worth doing and what is not, to increase the chances of success, and where to seek additional information and knowledge on the subject.
  • Not every industry can seamlessly transition to the internet. Online business operates remotely and is subject to its own unique set of laws, regulatory exemptions, and restrictions. It often adheres to specific rules and best practices. Another example worth noting is industries with unregulated circumstances in the realm of remote sales. While selling products like socks online may pose no significant challenges. Issues may arise when dealing with a store selling alcohol, drugs, weapons, or gambling services. Even if someone possesses the necessary licenses or concessions to offer such services legally, conducting them online can present distinct challenges.
  • Different industries and business models on the internet are perceived as more or less risky. It’s challenging to identify an industry that cannot transition to the internet. Nevertheless, some industries, due to various reasons, are regarded as riskier and may encounter specific restrictions associated with this heightened risk. Examples include tourism, MLM (Multi-Level Marketing), and what is commonly referred to as the sharing economy.
  • Setting up a store or website on the Internet is not equivalent to conducting business online. This brings us to a crucial point, one that is also a common misconception among businesses attempting to make the transition to the online world. Building an online business does not mean that you simply need to create a website for your traditional business. Online business operates differently from brick-and-mortar business, and running an online store is distinct from managing a physical one. So, what do these types of businesses have in common? They share product assortment, and not much else. It’s insufficient to establish an online store with the same inventory as your physical store. You must also attract visitors and convert them into customers. This requires continuous effort, from day one to the last day of operating such an online business.

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