Gartner has estimated that there will be 10,000 digital marketplaces or trading exchanges by the year 2003. And Michael Vizard of InfoWorld wrote in a recent column that “The economic bottom line here is pretty simple. If your company is not building or planning to participate in an electronic trading network, it probably won’t be around within three years.”
Over the past six months, there have been numerous announcements of electronic marketplaces (usually B2B) making strange bedfellows of industry leaders or attempting to make new industry leaders out of independent metamediaries. These marketplaces are typically organized around a particular vertical industry (like real estate management, chemicals, metals, or aircraft manufacturing), and, often, they initially focus on taking one key business process online, e.g., the procurement of indirect materials.
There are public eMarketplaces, so-called “many to many” marketplaces, that welcome all comers: any buyers or sellers who want to subscribe or sign on. There are also private eMarketplaces, known as “value hubs,” that feature one large manufacturing company hub and several spokes: trading partners, design partners, suppliers, and even key customers. One manufacturing company could both deploy a private, password-protected eMarketplace to keep key competitive data within its extended supply chain and to preserve highly valuable supplier relationships, AND participate in a public eMarketplace, offering excess inventory for auction.
It’s been my observation that, to date, most eMarketplaces have been focusing on building their infrastructures: creating sites that can support secure transactions, easily deploy commerce storefronts, email buyers when certain products come on the market, host business process optimization solutions, etc. And this is, unto itself, a daunting task. What Net market makers haven’t been focusing on is marketing their marketplaces. And yet, marketing may prove to be the difference between success and also-ran status for eMarketplaces.
Let me explain. What every Net market needs is liquidity: a sufficient volume of buyers and sellers to ensure that there isn’t a “thin” market for goods (or services). Many (if not most) Net market makers are suffering from what I now call “The ‘Field of Dreams’ Syndrome,” believing that, “Build it, and they will come.”
These market makers are, quite understandably, focused on their exchange technologies and multiattribute configuration engines, while failing to notice that no one’s in the trading pit to bid or ask. Thus, I suspect, that we are witnessing the creation of some wonderful Brasilias, innovative but empty “cities of commerce.”
Now it doesn’t have to be this way. Let’s say you’ve already put out the press release to discourage competitors, while buying yourself a little time to deliver on what’s promised. Your interactive architects and exchange solutions providers are hard at work doing their thing. It’s now time to use tried-and-true marketing methodologies to attract anchor tenants, registered users, buyers, and sellers.
Generalities won’t help you here because everything depends on the vertical industry that you’re targeting. (For example, a CTO in a high-tech company is quite different from a CTO in a textiles company.) But usually the universe of folks you need to attract first (with the possible exception of buyers and those will follow if you have a wide selection of products) is not particularly large.
So targeted, engaging direct mail augmented by banners and e-zine sponsorships on specialized sites coupled with vigilant outbound telemarketing follow-up can prove very successful. If possible, as part of your direct mail, include an analyst report from Gartner, META Group, Forrester, AMR, or Benchmarking Partners. (Of course, you’re thinking: No executive will ever read it. But that’s not the point. There is a certain positive semiotics associated with delivering something of substance.) And, of course, offer something more: a webcast, an invitation to a dinner, a free consultation with a respected implementation partner, etc.
There is an entire article that I could write about making the most of your existing eMarketplace site traffic. It does little good if you’re out there using banners and e-zine sponsorships to attract site visitors while your site reflects no understanding of “customer values.”
For example, when you hit the home pages of many eMarketplaces, it isn’t at all apparent what you’re supposed to do next. Oh, there may be a “Contact” or “Register” link, but, I ask, “What’s in it for me?” Again, to repeat advice from a prior column, don’t think in terms of walls of descriptive text. Instead, envision inviting “doors” that welcome me into the site and give me reasons to cross their thresholds.
In closing, a general note about direct mail. When it comes to targeting CXOs, put away your standard per-unit cost measurements and weigh the total cost of the campaign against the lifetime value of a potential sale or partnership. After all, what is a well-orchestrated $100,000 campaign when a single sale (or partnership) can produce millions?
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