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B2B

VIEWS: 250 PAGES: 9

									B2B
How To Build a Profitable E-Commerce Strategy
MICHAEL CUNNINGHAM

MICHAEL CUNNINGHAM is the founder and CEO of Harvard Computing Group, an international business and technology consulting firm. He is a sought after speaker for international events and a regular author of articles about Web business and e-commerce. Mr. Cunningham is also the author of Smart Things to Know About e-Commerce.

SUMMARIES.COM is a concentrated business information service. Every week, subscribers are e-mailed a concise summary of a different business book. Each summary is about 8 pages long and contains the stripped-down essential ideas from the entire book in a time-saving format. By investing less than one hour per week in these summaries, subscribers gain a working knowledge of the top business titles. Subscriptions are available on a monthly or yearly basis. Further information is available at http://www.summaries.com.

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MAIN IDEA The advantages of business-to-business (B2B) e-commerce are so compelling and the potential rewards so obvious that this literally may become the last frontier in the business world. At stake will be the trillions of dollars of business which will be transacted by businesses over the Internet in the next few years. The imperative, therefore, is to get involved in B2B commerce. In such a dynamic and fluid marketplace, best practices are evolving rapidly. The business organization that waits until a clear path becomes clear will find by that stage, its competitors will already be firmly entrenched. In other words, since everyone is learning how to do B2B successfully in real time as they go along, it’s getting actively involved in the game that counts rather than waiting until things settle down. In the final analysis, B2B isn’t anything new. What is new is the speed at which better and more effective communication links are being built between firms. That empowers B2B to reduce transactional expenses, aggregate buying power and exploit the efficiencies of digital marketplaces. In short, B2B is the greatest opportunity yet in online business.

1. The Fundamentals of B2B E-Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2 At its very heart, B2B is all about staying competitive while the dynamics of large industries and traditional ways of doing business are undergoing rapid and dramatic change. The emergence of the Internet as a common platform for the conducting of business worldwide creates a new set of rules and an entirely different set of players to those who existed before. 2. The New B2B Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3 Business-to-business e-commerce focuses on delivering everything that’s needed to close a deal via the Internet – information, negotiation and order processing. The actual delivery of the product or service may take place in the real world, but every other aspect of the transaction is negotiated and finalized via the Internet in a B2B market. 3. B2B Best Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3 The B2B market is extraordinary – it has so many available opportunities, so many companies moving into the field and numerous successes and inevitable failures. Yet despite the headlong rush, several best practice factors are now starting to emerge which characterize the high-quality B2B markets. 4. Building B2B Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4 In an electronic marketplace, no single company is likely to have the time or resources to do everything themselves. Instead, there will be a reliance on forming partnerships and strategic alliances to access the necessary capabilities and skills. In fact, building and maintaining effective alliances is becoming one of the key skills of the B2B era. 5. The Three B2B Building Blocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5 The three key building blocks of any new B2B business will be: 1. Applications 2. Services 3. Software Successful B2B business builders have generally adopted a customer-centric perspective on each of these elements and focus on how to create and deliver the customized experience the client wants. 6. How To Design a B2B Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6 To successfully put together a B2B project, the correct infrastructure must be developed. A robust and viable B2B infrastructure will have these key elements: A Viable B2B Infrastructure 1 2 3 4 5 6 7 Corporate Culture Go-to-Market Plan Sales & Distribution Plan Marketing Strategy Service & Support Plan Content Plan Integrating Technology Plan

7. Building a B2B Business In Real Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 8 At some point, planning the B2B business must cease and making it happen must commence. While that’s happening, the marketplace itself will also be constantly changing. Therefore, the key management challenge in implementing any B2B business plan is retaining the planning flexibility to make changes on the run and the nerve to act quickly enough.

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1. The Fundamentals of B2B E-Commerce Main Idea At its very heart, B2B is all about staying competitive while the dynamics of large industries and traditional ways of doing business are undergoing rapid and dramatic change. The emergence of the Internet as a common platform for the conducting of business worldwide creates a new set of rules and an entirely different set of players to those who existed before. Supporting Ideas While the business-to-consumer (B2C) e-commerce applications have tended to grab the media spotlight, B2B will be many times larger. For example, some research companies forecast that by 2004, B2C sales will be $184 billion while B2B’s revenues will top the $2.7 trillion mark – and may be as high as $7.3 trillion. The B2B marketplace will be made up of:
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So what will be the practical benefits of B2B e-Commerce?
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Reduced costs for goods and services. Access to a broader range of products. A reduction in the need to carry inventory. The ability to control procurement costs. More effective quality control systems. Enhanced control over suppliers. Elimination of intermediaries who do not add value. Reduced manufacturing cycle times. Shortened sales and delivery cycles. The ability to interact with companies based anywhere in the world cost effectively and efficiently. Increased revenues. Improved cash management systems and processes.

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The sale and transfer of goods before they reach the consumer – through exchanges, auctions and other activities. Joint ventures and outsourced business activities. Financial transfers and transactions. The establishment and operation of subcontractor networks. New product development services. Supply chain activities and related transactions. Delivery of support services. Negotiation of contractual arrangements.

Key Thoughts “If you own, operate or participate in any business, B2B e-commerce is going to be very important to you in the next two years. Don’t relax – we’re talking two Internet years, or about fifty to sixty calendar days. This is a market so important that no one can afford to be left out. Business-to-business e-commerce is the largest gold rush international commerce has seen for decades. It may be the largest ever.” – Michael Cunningham “These are new times with new rules and new players. Business-to-business e-commerce will become a main underpinning of the strategy, operation and technology systems of companies. No other way of doing business has had such far reaching effects, so many dimensions that influence the business process, the marketplace and how businesses work together with their business partners.” – Michael Cunningham “Why does B2B make so much sense? Simply, it is the only way for businesses to use technology in a strategic manner to improve their operations. B2B is particularly useful in streamlining interactions with new and existing partnerships. The emergence of B2B e-commerce will have a far-reaching effect on everyday business.” – Michael Cunningham “Before the Internet, the benefits of supply-chain management were considered significant enough for companies to invest in specialized networks and infrastructure to link members of the chain together. The Internet now connects these groups in a common system at a much reduced cost and sophisticated and expensive communication systems are no longer necessary. As many firms have already made the investment to create these interdependent relationships with suppliers and business partners, the Web offers a unique opportunity to extend and improve these systems.” – Michael Cunningham “All the disintermediation worries that existed in the early days of the Internet are back. The difference this time is that they are real. Companies and organizations are gearing up not merely for incremental change, but for a completely new set of rules. This is not simple automation of a supply-chain process, purchase of office supplies on the Web or electronic travel. It’s far bigger.” – Michael Cunningham

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Obviously the Internet is the foundation or the enabling technology which makes B2B feasible. The other prerequisite for the B2B marketplace to grow is the availability of online tools and processes by which business can be conducted more efficiently. The key tools and processes of the B2B marketplace are:
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Business rules – a common set of acceptable practices by which transactions can be completed. Processes – the technical standards, protocols and support systems everyone uses in common. Technology – a shared system and infrastructure (including security systems) which everyone has access to.

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The B2B marketplace will have a wide variety of participants, including:
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Portals – gateways that will serve as the starting point for many B2B transactions. Exchanges – digital marketplaces arranged around common themes or area of focus, like a specific supply chain. Infomediaries – creators and resellers of content for targeted industries and user groups. Procurement marketplaces – where vendors and suppliers can exchange information and do business. Auction sites – where available business can be offered to the highest bidder. Companies with Web enabled supply chains. Businesses acting sometimes as vendors and other times as buyers.

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In short, B2B marketplaces will be sufficiently large and attractive that participation will be broad and deep. Over time, virtually all business entities will become active participants in one or more B2B marketplaces.

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2. The New B2B Focus Main Idea Business-to-business e-commerce focuses on delivering everything that’s needed to close a deal via the Internet – information, negotiation and order processing. The actual delivery of the product or service may take place in the real world, but every other aspect of the transaction is negotiated and finalized via the Internet in a B2B market. Supporting Ideas The basics of developing a B2C e-commerce marketplace are actually quite straightforward: 1. Build and attract a community of visitors. 2. Give everyone relevant information about their area of interest. 3. Present products or link to online marketplaces with ranges of products that will be of interest to consumers. 4. Allow visitors to make comparisons on price and delivery options. 5. Take the order and provide the requisite fulfillment processes. The growth and development of B2B online marketplaces will be different, if for no other reason than because market behavior and consumer behavior are so different. For example, many consumers like to comparison shop using the Internet but finalize the transaction in a traditional store. This is much less desirable behavior for a business. Specifically, B2B e-commerce markets:
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3. B2B Best Practices Main Idea The B2B market is extraordinary – it has so many available opportunities, so many companies moving into the field and numerous successes and inevitable failures. Yet despite the headlong rush, several best practice factors are now starting to emerge which characterize the high-quality B2B markets. Supporting Ideas Good B2B markets:
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Are agile – the participants remain paranoid and therefore think and respond to new developments rapidly. Rely on partnerships – so that participants can get assistance in the marketing, strategy, industrial development, sales and distribution areas. Leverage existing business relationships to create new business opportunities around original and creative ideas. Are international rather than U.S. focused. Understand supply chains intimately, and align all the resources of the network behind getting to target markets quickly and efficiently. Allow companies to leverage their brands – using brand awareness as a way to limit new entrants. Offer multi-dimensional business models – embracing business exchanges, sponsorship arrangements, subscriptions, sponsorships, advertising arrangements, content relicensing, online stores and application services. Build a client base first and then seek opportunities to leverage that asset later. Enhance customer loyalty by continuing to add more value on an ongoing basis. Have sufficient resources to be able to withstand the competitive enticements and give-aways which other B2B markets may be willing to offer in the future. Carry out market research, testing, prototyping and introduction of new services continually. Learn new techniques and evolve over time to meet the changing needs of market participants.

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Are long-term relationship based – with many critical business-to-business relationships outlasting the respective careers of the people involved. Focus on seamless systems – which move transactions intelligently through all the stages of the sales-to-delivery cycle. Use branding not to create awareness but to create the right impression for the business – so other businesses will feel confident about the reputation and past performance standards of the other company. Attract new entrants who already know how the market operates – and who have something to offer which will improve the status quo dramatically. Feature more complex marketing – because the needs of the business customer will often be more complex than a simple purchase decision. Put a premium on collaboration – allowing market participants to share information efficiently through common databases, link external and internal networks and generally manage knowledge as efficiently as possible.

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Examples of B2B companies that exemplify many of these best practices include: • Staples.com – office supplies • HardDollar.com – construction industry • GlobalSupplyNet.com – janitorial supplies, affinity programs • Travelocity.com – travel services • ebay.com/business_exchange/ – business online trading • MeetChina.com – facilitation of trade with China • VerticalNet.com – more than 50 vertical markets • ProSavvy.com – consulting services Key Thoughts “Many firms moving into B2B fall under the category of an existing business that has the vision and determination to change the way things are done in its industry. These organizations are changing existing operations and focusing on moving to a new space in the marketplace. They are moving new products to a new sector. Even with industry-specific knowledge and an established product line, these transformations are demanding and fraught with risk.” – Michael Cunningham

Key Thoughts “Anyone familiar with B2C technologies can see that there is much that B2B firms can leverage from the consumer sector, but understanding the target industry and how it works remains the nub of any real opportunity for business-to-business operations. In B2B, less is more. Fewer processes, fewer actions, smaller numbers of participants taking value out where none is added.” – Michael Cunningham

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4. Building B2B Alliances Main Idea In an electronic marketplace, no single company is likely to have the time or resources to do everything themselves. Instead, there will be a reliance on forming partnerships and strategic alliances to access the necessary capabilities and skills. In fact, building and maintaining effective alliances is becoming one of the key skills of the B2B era. Supporting Ideas In B2B, time-to-market is of prime importance. There is most often a substantial early premium or first-mover advantage. Therefore, speed has a major impact on the way partnerships are formed and run. Good and long lasting B2B partnerships:
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Develop requirement budgets Testing of first generation systems Selection of developers with skill sets Selection of suitable hosts Integrator selection User testing Establishment of hosting alliances Press relations e-Marketing Print marketing Advertising

Specifications

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Development

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Deliver win-win benefits for all the parties involved. Produce results quickly – thereby discouraging competitors and creating momentum. Often get doubled up or layered, so multiple business initiatives can be tried in parallel. Have varying control mechanisms and approaches. Reduce risks for each of the partners involved.

Launch

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B2B partnerships and alliances also come in a variety of forms and involve both inside partners (who participate in developing the business plan) and outside partners (who assist solely in the tactical implementation of the plan). For example:
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In short, the development of a successful B2B organization is complex and demanding. Bringing everything together in the time frame available is a challenge, especially if experienced B2B staff are not available. By involving partners in each stage as required, the fundamentals can be put in place and the B2B project placed on a strong foundation. Key Thoughts “There is a reason the very successful Internet firms are working at a frenetic pace, both in terms of their decision making processes and in terms of the number of hours involved. The old rule of thumb that time means money has a totally new meaning in today’s valuation world.” – Michael Cunningham “Anyone in business will tell you that good people, a great plan and a hot market can make a company a huge success. Next on the list of important factors is the selection of excellent business partners. In the B2B world this is doubly important.” – Michael Cunningham “In the past organizations spent months and sometimes years building their partnership networks. A strong partnership network used to be considered a strong barrier to the entry of others into the marketplace. Although this may still hold true, the way companies go about forging these networks will be different – that is, if they want to get there while the party is still going on.” – Michael Cunningham “New-age partnerships require enterprises to have a fluid way of looking at the world. They have to be ready to change not only one thing, but many things simultaneously. Maintaining a fluid view of the partnership approach will keep companies thinking about the real issues for success. An organization that can regroup, reorganize and respond quickly has the edge. Although there is no substitute for good old fashioned planning, in a volatile environment, different tools, behavior and partners will provide necessary flexibility.” – Michael Cunningham “In today’s e-business world, most firms understand that the run for market share, mindshare and customers is a sprint every day of the week. Joining forces and leveraging the power of many becomes a foundation for most operation’s strategies.” – Michael Cunningham

Outsourcing arrangements – with partners who will take responsibility for various parts of the supply chain. Sales partnerships and affiliate programs – which expand market share by teaming up with partners with established consumer relationships. Financial partnerships – with people who become part of the ownership structure of the business. Distributor arrangements – to extend the market and geographic reach of the firm. Industry-specific partnerships – with others who bring specific skills, know-how and experience to bear.

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In B2B, finding and establishing the appropriate roster of suitable partners and then getting the mix precisely right will be difficult. The B2B firms that get these factors exactly right, however, then position themselves to move forward far more rapidly than competitors who attempt to do everything themselves. In addition, the ideal roster of partners will vary over time. For example, the activities which B2B partners may be providing will vary according to the development phase of the overall B2B project, in this way: Project Phase
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Ideal Partner Activities Funding Market opportunity research Development of the e-Strategy Business development planning

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Research

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Market testing Prototyping

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5. The Three B2B Building Blocks Main Idea The three key building blocks of any new B2B business will be: 1. Applications 2. Services 3. Software Successful B2B business builders have generally adopted a customer-centric perspective on each of these elements and focus on how to create and deliver the customized experience the client wants to enjoy. Supporting Ideas 1. B2B Applications The ideal B2B site will be compelling and keep the customer fully engaged. Accomplishing that usually requires the site to be:
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In addition to the hosting companies, a number of B2B application service providers have also come into existence. These companies not only provide hosting capabilities but also packages of services B2B companies typically require. All these services and applications are available on an as-needed basis – lowering the ingoing capital requirements for new B2B participants. 3. B2B Software Many B2B specific software packages are now available off-the-shelf. For example, corporate portal system software has recently been released. This provides an infrastructure which links data resources, security and applications in a common framework. That, in turn, allows many different applications to use the same desktop interface. Similarly, many large software companies now offer full-service B2B packages designed specifically for new B2B market entrants. In addition to the software required, these packages often include strategic consulting and business plan development. Systems integrators offer another viable option. Integrators are specialists in the development of new B2B systems. They have expertise and technical know-how, combined with hands-on experience. Integrators should also be well positioned to advise what elements can be purchased pre-built, and which parts of the overall system will require a customized approach. Key Thoughts “Given that many market requirements are tied to client control and creating the best possible experience for the end user, the word customization is used extensively by vendors and suppliers. Customization means that the information and application tools delivered to the end user are tailored specifically to create the experience the client wants to enjoy. Enjoy is a good word. People who are enjoying a site (are provided with useful and relevant information for the job) are likely to stay, and having people stay is what the B2B world is all about. If people do leave, the second most important element in B2B comes into play – getting them to come back for more. Accomplishing this goal means staying in the client’s face, keeping the client interested for long periods of time, which means making the site both relevant and compelling.” – Michael Cunningham “The Internet has changed everything for business, and B2B is a valuable occupant of this new space. We now have a medium that allows us to do so many things that we are limited literally only by imagination.” – Michael Cunningham “The Internet as a business-to-business medium is boundless and allows us to make progress in seconds, not months, days or hours. It serves not only for distribution, but also as an infrastructure for communication and collaboration. In the past, sales and marketing were based largely on sophisticated but fat distribution chains. These led from manufacturers to the end customer, with most of the money and margin being absorbed in the process. But business-to-business e-commerce is fast becoming the new standard way of doing business. No other vehicle creates the value, opportunity and mechanisms made available by B2B. Interestingly enough, until telepathy becomes a common form of communication there is likely to be no faster way of establishing business relationships for the near term.” – Michael Cunningham

The first place the client thinks to look. Extremely relevant to the way the client does business. Offering services or products that are precisely what’s needed – increasing loyalty. A highly customized experience. Scaled upwards or downwards to meet the client’s evolving needs and requirements.

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Achieving all this is the job of the application framework put in place at the B2B site. Most likely, these applications will be delivered in a number of discrete layers:
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Layer 1 – Intranet or business-to-employee (B2E) systems. This will be the internal network, with e-mail capability, browser software, Internet access and so forth. Most companies tend to bundle all these applications together on an organization wide intranet. Layer 2 – Back-office systems. These are the systems needed to run the business – financial accounting, inventory management, order entry, human resources, etc. Also included will be the enterprise resource planning systems. B2B generally places a high premium on the ability of any firm’s back-office systems to be compatible with those used by partners and other market participants. Layer 3 – The B2B destinations themselves. The upper, most visible layer, will be the B2B portals, exchanges, auction sites, vertical application marketplaces, etc. These destinations become the online place where clients do business together.

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Due to the fact many of these applications have already been developed for the B2C markets, it is now possible to outsource many B2B applications as prebuilt components. By accessing and adopting these components rather than building from scratch, significant amounts of development time can be saved. That allows the B2B company to get to market sooner, although it may require some trade-offs in the area of customization. 2. B2B Services Most firms entering the B2B marketplace find it more cost effective to use a hosting provider rather than undertake themselves everything that’s involved in setting up a dedicated data center. B2B hosting companies: • Offer packages of services and site hosting capabilities. • Set up high performance servers and bandwidth. • Guarantee 24 hours a day 7 days a week uptime. • Offer an upgrade path and the ability to scale up later.

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6. How To Design a B2B Business Main Idea To successfully put together a B2B project, the correct infrastructure must be developed. A robust and viable B2B infrastructure will have these key elements: B2B Infrastructure 1 2 3 4 5 6 7 Corporate Culture Go-to-Market Plan Sales & Distribution Plan Marketing Strategy Service & Support Plan Content Plan Integrating Technology Plan

should be available in electronic format, so the achievement of various milestones and any amendments to be made along the way can be updated and circulated immediately. B2B Infrastructure 3 Sales & Distribution Plan

B2B requires that sales and marketing strategies be aligned far more carefully than for traditional businesses or even in B2C situations as the B2B sales cycle is usually longer and more complex. Generally speaking, companies will not be surfing the Net to find places where they can do business. The key B2B sites for each industry will attract the people who can use them meaningfully. Thus, in contrast to B2C sites, B2B sites concentrate on keeping potential buyers engaged by offering:
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An online experience that resonates with participants in specific industries. An expedited and efficient sales process – which is self-service and completely automated if at all possible. A complete framework of everything that supports the sales decision.

Supporting Ideas B2B Infrastructure 1 Corporate Culture

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Designing a B2B business involves much more than simply putting up a new Web site. Properly done, a B2B business initiative will permanently change numerous aspects of an existing business. Therefore, an integrated approach is needed rather than something ad hoc. Before making the transformation to an Internet business, give the company culture time to adjust and prepare. That usually requires consensus to exist amongst all the key internal parts of the business organization. And consensus will only be possible if everyone is in the loop – that is, if everyone is closely involved in forming and shaping the B2B strategy right from the start. Therefore, the first step in building a strong B2B infrastructure is to plan carefully with everyone in the business becoming involved in the details. Give your internal company culture the time needed to mentally adjust to the proposed changes. B2B Infrastructure 2 Go-to-Market Plan

The B2B sales and distribution plan should outline how, in fact, customers will be moved through the various stages of the B2B sales cycle:
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Create demand

This is the initial marketing program which creates awareness of products within the target market segments.

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Identify prospect

The people who respond to the initial marketing becomes prospects – and are provided with more detailed information. Through interviews and demonstrations, genuine buyers are separated from the “tire kickers”.

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Qualify prospect

The Go-to-Market plan is the central coordination instrument. It reduces risk, eases confusion and enhances teamwork. A good Go-to-Market plan will cover these points: • The B2B marketing strategy and anticipated tactics. • The public relations program, including media tours. • How existing clients will be brought up to speed on B2B. • How new clients will be secured for the B2B program. • Pricing information. • Packaging plans and options. • The Web site traffic promotion strategy. • Special introductory offers. • Partner or affiliate programs. • Internal promotion and educational programs. • How the new B2B business model will be validated. • Internal communications programs. • New product development schedule. • Launch plans for new products. Clearly the Go-to-Market plan is important because it provides the framework around which the B2B business will take shape. As such, the Go-to-Market plan is never static. Ideally, the plan
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Proposal

Specific purchase proposals are generated which are tailored to the needs of the prospect.

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Negotiate

A purchase contract is negotiated individually and the transaction closed.

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Support

After sales support is provided and the client becomes a prospect for additional products and services.

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B2B Infrastructure

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Marketing Strategy

In the B2B context, marketing is customer acquisition. Most likely, a multifaceted approach will be taken to the challenge of building a strong client base. The most common ways to capture new clients are:
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The B2B content plan must address how up-to-date content will be sourced and integrated into the site. It must also address issues like dynamic content – where different users are provided with specific content based on their personal requirements and preferences. B2B Infrastructure 7 Integrating Technology Plan

The Infomediary approach – provide potential clients with loads of free, useful information. Specials – free offers of sample products or information packages at dramatically reduced prices. Applications – provide free use of applications which add value for potential clients, encouraging them to visit again and make further transactions in the future. Acquisitions – purchase the client lists of competitors or companies already established in adjacent markets. Competitive pricing – price products and services at a level that will increase market share, especially during the developmental stages of the B2B marketplace. One-to-one marketing – provide customization of products and services for specific potential clients. Customer relationship management databases – use information gathered about potential clients in other settings to tailor marketing initiatives specifically to their known needs.

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Communications tools can vastly enhance the B2B experience. Therefore, most B2B businesses provide a range of collaborative tools and systems, for example: • Bulletin boards • Chat systems which allow collaboration to occur. • E-mail systems in various flavors and options. • Contact management tools like instant messaging. • Document management applications. • Calendar management and scheduling packages. The B2B integrating technology plan will detail how these communications tools will be integrated into the site and the back-office systems. The more these various elements can be integrated seamlessly, the better. Key Thoughts “In the past, market share and brand position created a dominance that could not easily be changed. In the B2B world, things can be very different. It is not a question of how much will change, but of how much change will stick. The network effect of the Internet – connecting so many individuals to one another and to businesses – is what’s driving the change. E-mail, chat, video conferencing and data conferencing are the tools of today. What is business news in the morning can become a trend by the afternoon. People need to think, execute and worry all at the same time. Luckily, the channels exist for rapid feedback, from sales to marketing to manufacturing. The ability to change the plan has to be built into the plan.” – Michael Cunningham “Creative review of current relationships is a great place to begin a B2B strategy. The idea is to cut the number of steps, reduce the costs and improve the effectiveness (repeatability) of the process by taking a serious and surgical look at the current business model. After all, the competition will be looking at the market with similar goals, which will not include the welfare of another organization’s position in the marketplace.” – Michael Cunningham “Modeling the business network the organization wants to build is time well spent. The model can be as simple as a relationship map of what happens as new marketing, sales and development processes progress. Building the ideal network is one of the most important tasks that takes place at the beginning of any B2B program or strategy. Without this vital ingredient, the organization is apt to miss critical pieces, such as recognizing the risk of competitive threats, identifying potential costs and developing a transition plan for existing relationships and distribution programs.” – Michael Cunningham “This is not some new business methodology, but a whole new mind-set. For a variety of reasons, moving into Internet territory requires thinking differently.” – Michael Cunningham

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In practice, the B2B marketing strategy will identify which of these marketing ideas will be used and how. B2B Infrastructure 5 Service & Support Plan

Service and support is especially important in the B2B context because this delivers rich and effective interactions with the product sold. Self-service is highly desirable. This simply means creating versions of internal databases and business practices which allow clients to get the information they want whenever they need it. The normal B2B practice in this area is to allow clients to have external access to whichever sections of the company’s internal systems contain the relevant information. The B2B service and support plan will detail how information will be captured, reused and reformatted to meet the specific needs of individual clients. B2B Infrastructure 6 Content Plan

Content is an essential aspect of the Internet experience. Therefore, a viable B2B infrastructure will address the issues of how content will be acquired, updated and integrated into the site on an ongoing basis. The cost of acquiring interesting and relevant content is usually underestimated in B2B plans. Similarly, the lead time involved is often neglected entirely. So too is the need for editing, reformatting and freshening the material. All of these issues need to be addressed. The most common sources of content for B2B applications are: • Magazines, especially trade magazines. • Industry specific journals or books. • Licensed material from third party sources.

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7. Building a B2B Business In Real Time Main Idea At some point, planning the B2B business must cease and making it happen must commence. While that’s happening, the marketplace itself will also be constantly changing. Therefore, the key management challenge in implementing any B2B business plan is retaining the planning flexibility to make changes on the run and the nerve to act quickly enough. Supporting Ideas Paradoxically, the success of B2B projects doesn’t lie in arriving at a predetermined destination. Instead, in B2B, flexibility is the key. There must be an ability to change the business plan in the middle of the transition to respond to new market conditions. The key elements in B2B implementation programs are:
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In short, B2B implementation requires an integrated approach. A common framework must exist, around which all the various elements can be placed: • Research. • Planning. • Marketing. • Sales. • Development. • Deployment. • Manufacturing. In previous eras, a business had loads of time to carry out detailed research and refine products through repeated test marketing cycles. With the arrival of the Internet, however, the new imperative has become to attract customers first and figure out precisely what product and services they want later on. By approaching B2B using an integrated framework, organizations are far more likely to have the capability of modifying their strategy in real time based on real world input. In B2B, that’s as good as it gets. Key Thoughts “Being ready for change and making it happen are two distinctly different things. At some point, the raft has to be ready to go down the river. If the river is the market the water can be smooth, wild or downright treacherous depending on the circumstances. If the company can control and steer the boat, this is as good as it gets. Every organization has to make the choices, weigh the risks and rewards, decide how much to change and how quickly, all the time keeping a careful eye on the moving marketplace. The willingness of an operation to make the necessary commitment to embrace the current industry climate is an ongoing management challenge. There is a reason e-commerce strategists and managers are well compensated. This is a challenging ride.” – Michael Cunningham “The B2B market is changing in real time. Such a lively marketplace needs dynamic rules to keep it in check. Staying watchful and being ready to do things differently may be the ultimate weapons in the arsenal required to do B2B in the new order of business. As organizations face something so different, the ability to plan, react, respond and deliver creates new dimensions and challenges for professionals everywhere. Perhaps at last the worriers will prosper in a world in which the greatest certainty for an enterprise is that a competitor wants its market share and wants it quickly. Stay alert: it is going to be a wild ride.” – Michael Cunningham “Even if B2B is not the final frontier, it’s the biggest one I’ve ever seen. Business-to-consumer e-commerce was exciting – convenience, pricing, service. Actually, it was quite good when you think about it. However, compared with B2B, it’s the National Enquirer versus the Times of London. A horse of a different color.” – Michael Cunningham

Planning – start with clearly defined goals. They will need to be updated and changed regularly, but having one single vision is important. Integration – the B2B plan should have all the new work processes and technology embedded within it. Unless the B2B system does everything the old business used to do, it won’t be very effective. Education – staff need to be provided with the rationale behind the new B2B strategy. That will instill a sense of urgency in the program. Resources – the B2B business initiative must be sufficiently resourced if it is to have any chance of succeeding. Workflow – the new ways of doing business. By building and defining new work practices, the B2B program will change how business gets done. Everyone needs to be on the same page with these changes. A balance of internal and external integration – to build unity and real world effectiveness. A commitment to eliminating unnecessary work practices that may now exist within the organization. Inclusion – combining the efforts and resources of management and staff together cohesively. Information – providing feedback on progress-to-date and anticipated future milestones. Acknowledgment of the impact of the changes being made on various peer groups within the organization. Alignment of reward systems – to ensure what contributes in meaningful ways to the B2B program is what’s rewarded. A readiness for change. A tolerance for genuine mistakes while new systems are being learned. Emulation of the best practices gleaned from other successful B2B transitions. The ability to prototype, develop, test and revise in real time. A commitment to develop new core competencies. Flexibility.

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