MDF Systems, Inc.
780 James P. Casey Road
P.O. Box 917
Bristol, CT 06010-0917
Tel:800-426-3752
Tel:860-584-4750
Fax:860-584-4759
www.mdfsystems.com
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Industry News
B2B AND THE INTERNET
by Alan J. Zell, Ambassador of Selling
Business-to-Business (B2B) selling on the Internet will always be important to B2B although it may not be seen as being as important as business-to-consumer (B2Consumer) is. However, B2B e-commerce is 10 times greater than B2Consumer e-commerce. There are reasons for this:
1) There are, on average, 5 levels of distribution for most all products from the raw material through to the end user as a finished product. So, while we see retailing every day, there is much more going on beneath the surface that the public does not see. As more and more suppliers at each level gets their products on line, the more important the Internet becomes in B2B selling.
2) In most cases, there is no need to transfer money via the Internet in B2B transactions. A working relationship has, in most cases, already been established. While the news and anticipation about fantastic growth is about the potential of using credit cards, it is directed at B2Consumer transactions. Credit card transactions between businesses plays a very small part in how businesses pay their bills when buying from other businesses.
In the B2B business world, the problems associated with the worries about credit card and personal information being "stolen" via the Internet and misused hardly exists, if at all.
3) The main reason behind the growing importance of the Internet in B2B commerce is that it can shorten up the sales process for reorders, add-ons and getting business by referral -- better known as "second sales." Second sales are more profitable that first time sales because the money spent getting the customer on the books goes right to the bottom line. Increasing the number of second sales or decreasing the time between second sales, whichever way one wants to phrase it increases turnover for both suppliers and customers.
It so happens, although not often reported, that a vendor helps a customer increase the customer's turnover, the customer will look to see how else a vendor can help; conversely, when a customer helps a vendor increase the vendor's turnover, the vendor will go out of their way for the customer.
With service businesses, while there may not be as many levels of distribution of information, once a relationship between the two parties has been established, the same advantages can be realized. And let us not forget that so-called service businesses have products to sell their outputs.
4) Another advantage to the Internet in B2B business -- and it has been put forward many times -- is that a business can have a presence in their potential and current customers' hands 24 hours a day and that no matter where they each reside, business can be transacted.
5) A question that will arise, with B2B selling on the Internet, how will it affect the need to have as large as sales staff or even if one is needed? Will or can they be replaced by the Internet? I doubt it. Businesses, still buy "personality" -- the personality of the vendor, the vendor's management, staff and agents, and the product or services they provide.
As the Internet grows in B2B arena, so will the need for better informed salespeople. A web site can give lots of information, but it is static information, what's there is there and it can't be changed from what one is reading or viewing. Ah, but a really good salesperson can help ailor or customize the vendor's products and services to meet the needs of customers. The sales forces of the future will come from the technical sides of a business who understand how the product or service works and how it can be altered to fit what the customer is doing, planning to do or would like to do.
The Internet can become another way for you to distribute information about your firm's products and services. It will not replace what you've been doing, it will enhance what you've been doing.
© Copyright 2004 MDF Systems
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