One of the biggest challenges faced by B2B merchants today is dealing with drop-off rates. In B2B E-Commerce, for example, drop-off rate is around 98.2%, and it’s not much better for other industries either.
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While there are several ways you can reduce drop-off rate, one of the biggest challenges in B2B is offering your customers net terms at the checkout smoothly. Not being able to offer simple payment terms to customers can have a disastrous effect on your conversion rates overall.
One solution involves offering B2B Buy Now Pay Later (BNPL). B2B BNPL allows merchants to offer net terms right at the checkout for a smooth checkout experience. Credit checks, upfront payments, and invoicing tasks are all taken care of, making the purchasing experience far superior than traditional selling.
In this article you’ll gain a better understanding of what drop-off rate is, why understanding drop-off rate is important in B2B and how you can use B2B BNPL to significantly reduce it!
But first, let’s get our definitions straight!
What is drop-off rate?
Drop-off rate measures the percentage of potential customers exiting your website at various sales funnel stages, often before reaching the final conversion point, like the checkout.
Analysing your website’s drop-off rate gives you a better understanding of how to optimise your website’s performance and avoid losing potential customers and sales in the buying process.
What about basket abandonment and checkout abandonment?
Good question! Basket abandonment is when a customer adds their products to the cart after browsing through the website. But instead of moving to the next step, the checkout, the customer exits the website.
On the other hand, checkout abandonment is when a customer has proceeded to the checkout, initiating the checkout process, but doesn’t successfully pay for the products. This results in them leaving the checkout page.
Keep in mind that in this stage, your buyer wants your product and is ready to buy, but there’s something in the checkout process causing them to withdraw before completing the transaction.
What’s the relationship between these three and how does it relate to B2B BNPL?
When tackling drop-off rates, B2B BNPL (Buy Now, Pay Later) effectively addresses issues related to cart and checkout abandonment. BNPL smooths out the checkout process, alleviating financial concerns and preventing last-minute drop-offs. While BNPL shines in easing the checkout experience and lowering abandonment rates there, its benefits can be seen through the entire purchasing process.
For B2B, where larger transactions and financial considerations are more pronounced, BNPL's role in enhancing buyer confidence and providing financial flexibility is particularly impactful. And this, of course, can positively impact your drop-off rate.
Why is drop-off rate important in B2B E-commerce?
Challenges like complex transactions and diverse customer needs in B2B contribute to high drop-off rates. Building trust is key, particularly when dealing with multi-stakeholder approvals, which prolong decision-making cycles in B2B compared to B2C, increasing the likelihood of drop-offs.
Addressing this metric is key to refining strategies, improving customer engagement, and optimising the user experience on your website. Minimising drop-off rates enables B2B companies to enhance lead nurturing and meet expectations with client needs. By acknowledging and overcoming these challenges, B2B companies can increase overall sales, leading to improved conversion rates, reduced admin and ensuring a smoother customer journey.
How B2B BNPL reduces drop-off rates
Now we’re up to date with why improving drop off rate is so important, let’s take a look at how B2B BNPL can help to reduce it. Ultimately, B2B BNPL helps because it offers your customers a way to purchase what they need in the way they want…
1. Simplifying the purchase journey
Drop-off rate encompasses all stages of the online purchasing journey, from initial interest to final payment. A significant factor contributing to high drop-off rates is the complexity and friction within this journey. B2B BNPL addresses this by offering a streamlined and simplified payment option.
This not only makes the checkout process more efficient but also reduces hesitation at earlier stages, such as when adding items to the cart or navigating through the payment options. By integrating a smooth BNPL option, businesses can significantly enhance the user experience, encouraging more customers to complete their purchases.
2. Improving cash flow
B2B transactions often involve significant financial commitments. BNPL options introduce a level of flexibility that can significantly influence a buyer's decision to proceed with a purchase. This financial flexibility allows buyers to manage their cash flow more effectively, making it easier to commit to purchases that they might otherwise delay or abandon.
Highlighting the BNPL benefits in managing business finances can reassure buyers, reducing overall drop-off rates by addressing financial hesitations that may occur before reaching the checkout stage.
3. Building confidence through transparency and security
Trust and security are vital in maintaining low drop-off rates, especially in the B2B sector where transactions are larger and more complex. A transparent and secure BNPL offering can reassure buyers about the safety and reliability of their transactions. Ensuring that your BNPL solution is backed by clear terms of service, comprehensive security measures, and straightforward communication can help in building this trust. By making these aspects a core part of your BNPL strategy, you're addressing potential concerns that could contribute to higher drop-off rates.
4. Encouraging larger purchases with flexible payments
B2B BNPL can influence not just whether a purchase is completed but also the scale of that purchase. By breaking down large payments into manageable instalments, BNPL makes it more feasible for businesses to make bigger investments without the immediate financial burden. This can directly impact the drop-off rate by not only encouraging more transactions to be completed but also potentially increasing the value of each transaction.
Take Purple Planet for example. After offering Two to their business customers, they saw a 400% increase in Average Order Value! Make sure to read their Case Study here!
Glamit, a Norwegian based cosmetics company is another great example! They saw a number of sales boosting benefits after offering Two like +25% increase in conversions, and a 60% increase in Average order Value. Check out that Case Study here.
Two - The highest net term credit limits for B2B. Instantly.
Selling B2B with Buy Now, Pay Later can be incredibly complex. But it doesn’t have to be. With Two, you can increase conversion rates and average order value while eliminating admin and offsetting credit risk.
Whether you want to supercharge your B2B E-Commerce checkout for guest purchases, optimise your trade account with frictionless onboarding, or offer B2B BNPL on all sales channels - Two is here to help.
Two’s payment technology enables businesses across all industries to offer purchasing on invoice, providing a frictionless checkout experience with instantly approved credit. Our revolutionary B2B solutions simplify the payment journey so businesses can access working capital and increase B2B sales while reducing time consuming operational work.