October 21, 2016

How to Bring Down Order
Cancellation Ratio in B2B E-commerce

Author Matt
Category Blog |

The biggest gripe a B2B salesman has – Cancelled orders.

Given the effort that goes into making a sale, rightly so. B2B sales cycles are long, and due to their higher pricing harder to sell.  Canceled orders in a B2B context don’t just mean revenue loss, they leave quite an impact. Firstly, all the hard work, negotiations, persuasions and submissions done to bag the order are now wasted…. BAM! Employee and company morale takes a hit! You slowly recover to realize that there is something worse! You not only lost out on a bulk order but also the chance to build a long-term relationship with a prospective buyer. Minus the obvious impacts on revenue, cancellation matrix reflects poorly on company performance, effecting customer retention and causes a negative brand impression. Such negative impacts can interfere with the company’s plans to build a healthy client base.

One thing is clear, reducing the order cancellation ratio is important in B2B realm where order processing involves complex logistics, expensive shipping, and high inventory costs.


“Knock, Knock! We are ‘Data’ and ‘Technology’. Together we can solve your problems!”

Several factors contribute to order cancellation. Some of the most common ones include lack of communication, faulty inventory management and lack of product content to drive purchase decisions. Let’s understand how they contribute to B2B sales failures.

Lack of communication
A recent survey of 120 B2B e-commerce professionals had 80% of them agreeing or strongly agreeing to the fact that customer experience was a strategic priority for them. (Accenture’s B2B Customer Experience Survey)
“When it comes to B2B sales, customers say they care most about product and price—but they really want a great sales experience.” (Key finding of McKinsey survey in which 1,200 purchasing decision makers from US and Europe participated.)

Customer experience is slowly emerging as the key differentiator in the B2B e-commerce industry. B2C shopping experiences have set the bar high for B2B e-commerce retailers and marketplaces. Customers are expecting the same things they get on B2C sites, things like mobile responsive sites, informative content, search and navigation tools, simple purchase funnel with post-purchase updates, transparent tracking mechanisms, and good customer support.

Improper inventory management

Hear, Hear! – Buyers want more Integration

“40% of B2B buyers identified back-end integration with financing, accounting, order management systems (OMS), or enterprise resource planning (ERP) systems as a key feature they expected from B2B suppliers” (A study commissioned by Accenture and hybris and conducted for them by Forrester Consulting in 2014)

E-commerce integration with backend systems like enterprise resource planning (ERP) and customer relationship management (CRM) systems is important for ensuring proper inventory maintenance, order fulfillment, and customer support. The alternative is far from ideal. Imagine a situation where your sales and customer service reps are communicating different information about product availability, price and fulfillment status than what is seen on site to your customers! You will have a very frustrated customer who will never deal with you again. Integration ensures proper information is available to all users and customers for a seamless customer experience.

Lack of detailed product information

Hot Update! “If content is missing, client is leaving”

A survey of 2,000 B2B shoppers found that 42 % abandoned their e-commerce search because of poor-quality product content. (Survey conducted by GS11, a UK-based non-profit)
IDG found that the likelihood of a product sale decreases by 45% if the B2B buyer doesn’t find relevant information on a vendor’s website. (IDG conducted research on 400 business customers in IT industry)
If we go by the reports, it is quite clear that adding product content that helps content customers make a purchase decision can make a lot of difference for B2B e-commerce growth.

We now know why order cancellations happen. Now let us see what actions B2B e-commerce players can take to avoid them.

1) Order management software
Using one that is integrated with your e-commerce store is a good bet. It allows you to meet customer expectations for speed and responsiveness. By letting them track an order easily it replicates the experience they already are used to in B2C purchases. Not only customers but your operations also benefit with the addition of order management solutions. Here’s how:

  • Eliminates errors that creep in due to manual entry
  • Improves order handling by making information entered at any point available to everyone in the order fulfillment pipeline.
  • Enables better customer support even for orders place through an offline channel.
  • Saves time and effort for your sales and processing reps

2) Inventory management tools
The convention B2B methods of inventory management sometimes lead to errors in order fulfillment. When B2B e-commerce marketplaces partner with sellers they fail to meet customer expectations. A situation which arises due to poor inventory management practices on seller-side. Marketplaces may resort to use of advanced algorithms and programs and inventory management systems customized to suit the needs of B2B sellers. Integrating an advanced inventory management system with your B2B e-commerce site will help set up and maintain a proper database. A database that reflects up-to-date pricing data, inventory situation, minimum order quantity, and several other variables.

3) Training for technology/platform adoption
B2C stakeholders are well acquainted with the digital purchase process, but the same is not true for B2B sellers. If you are going to set up a B2B marketplace – train sellers on how to use the platform. If you are creating a B2B e-commerce store for your business, make sure the design and content layout is in sync with the B2B purchase process. B2B sellers need to focus on developing digital interfaces that suit requirements of industrial buyers and sellers.

4) Proper Communication – Relevant & On-time
One reason customers cancel orders is due to lack of shipping transparency. Transparent tracking mechanisms and shipping updates will help B2B consumers deal with any anxiety related to arrival of orders. The end use for a B2B product may be for a specific time-bound purpose, like setting up a new production line or for project completion. Providing constant in-transit information to buyers helps bring down the order cancellation ratio.

5) For B2B Marketplaces: Build a network of providers
B2B marketplaces usually rely on a single seller for a particular product. If the seller fails to meet delivery timelines or doesn’t adhere to quality parameters, buyers have a bad sale experience and marketplace reputation suffers. Exploring partnerships with other sellers for a particular product ensures you have a backup to offer the customer.  Build a network of providers to avoid a scenario where the customer cancels the order and leaves the B2B platform unhappy.

As buyers become more empowered with each passing day, B2B sellers can’t afford any complacency about order cancellation ratios. This key metric says a lot about key underlying factors like the business process and the sale experience. Right product, proper communication, and on-time delivery can transform the B2B e-commerce purchase experience to rival the B2C one.

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