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Rishi Diwan

Rishi Diwan is director and cofounder of supplyMr., a technology supply chain company making B2B indirect purchases personalized and transparent.

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On Ground Relationships Still Matter More Than Online Presence In The B2B Industry

"The cost of acquiring a customer using an online …is about 25 percent of revenue compared to 5 percent of same revenue in case of offline sales."

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Business Standard reports Tolexo, one of the leading B2B ecomm marketplaces may lay off 300 people. It further says, “The company is apparently shutting down its online operations and would focus on a new, completely offline, product.”

When Rishi Diwan, cofounder of 5 months old supplyMr., a competitor to Tolexo, said the same thing we weren’t convinced. But after reading about Tolexo we may have to change our minds.

This article written by Rishi makes all the more sense now:

The nature of B2B selling is such that if you don’t know people, you are nothing. That’s why the number of key contacts you have and how deep your relationships are act as a barrier to new entrants. How profitable your B2B is depends not on how low your price is.

Anyone can offer a lower price but the win is short term win and not a foundation to build sustainable repeat business.

How profitable your B2B business depends on trust and advice you can impart to your fellow clients. And you can only help someone with advice once you know them inside out, when you know their troubles and what snags their business has hit. Don’t tell me you can build a relationship like that (and rapport like that no less) on a website.

It’s not about giving out technical advice either. Anyone can do that. It has to be advice that can truly contribute to improving your customer’s business. That’s when a customer will start trusting you and keep coming back to you with their business. If your advice is helping a customer succeed more often than not, you’re their partner for life not a mere seller. When that advice is given face to face, not via call or a customer support form online it makes a big difference. You can empathize, crack a joke or two and form a human connection. Technology could never substitute to that.

I wouldn’t want to get purely emotional so let me posit some numbers here. Relationships are more important in B2B businesses because it’s a more cost effective way of acquiring customers as well.

It is a no brainer that it is far cheaper to maintain cost of services to existing customers than to spend money on an entire cycle of procuring a new customer by prospecting, communicating, calling them up for marketing purposes and by developing impressive proposals for them. The cost of acquiring a customer using an online platform is very expensive using digital marketing tools like pay per click model is about 25 percent of revenue compared to 5 percent of same revenue in case of offline sales.

While relationship selling ensures long term sustainable business relations, ecommerce solutions will of course add value in the form of efficient logistics of small size delivery and transparency.

India has already seen reasonable infrastructure development with the rise of B2C ecommerce in the form of efficiency small packet logistics. This aspect has improved turn around lead time to supply small volume items or stranger, more exotic items.

So I’m not saying let’s act like ecommerce doesn’t matter in B2B or is not important. Technological innovation is solving real problems in the sector. But I am saying that those relationships made offline matter significantly. And a business which has both offline and online presence, a hybrid if you may, will be the answer going forward.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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