“Modeling” Your E-Commerce Efforts

Before you rush head-first into B2B e-commerce and hit a brick wall, you might want to consider your current selling model. Understanding what it is, and how to apply it to the Internet, will help determine your e-commerce success.

The Retail or Mail-Order Model

Are you a retailer or mail-order marketer?

The retail model is basically one in which the customer makes a direct purchase from a location a store. The store sells its goods to a customer, who must physically come in to make the purchase. If the store has the item in stock, the customer can purchase it immediately; otherwise, the item needs to be ordered and the customer needs to return to get it, or to have it delivered when available.

The mail-order model is a variation on the retail store model. It simply uses a different distribution channel to complete the transaction. Here, the customer does not physically come to a place to purchase but rather orders an item via phone, mail, fax, email, or the web. The catalog, more than anything else, is representative of mail-order.

Web sites combine qualities of both a store and a catalog. The Internet difference is that you can “visit” the catalog. E-stores differ from traditional bricks-and-mortar stores in that there is a loss of personal contact, the tactile browsing experience, and the immediacy of getting your merchandise on the spot, but consider the other benefits of the e-store. You do not have to get in your car, drive there, and park. You can browse limitless “shelves” and visit whenever you want (and even wearing pajamas). You can find every product imaginable, and never wait in line to make a purchase.

It is not surprising that on the B2B side, the first electronic merchants to succeed with e-stores were technology-based catalogers sellers of multiple computer software, hardware, and networking products and services. Software merchants have even been able to fulfill the promise of instant product delivery by allowing customers to unlock and download live products upon purchase, but the marketplace has quickly extended far beyond that niche, and now virtually everything is, or will be, available for sale on the Internet.

A variant of the retail model on the Internet is the virtual mall. As with a traditional mall, a virtual mall is a collection of storefronts. An increasing number of malls feature business-oriented categories.

Another Internet-based retail model is the auction. Auction sites are springing up on the web to facilitate bidding on new and used products, services, and more. There are variations to auctions such as price comparison sites and “name your lowest bid” sites. In fact, auction and related sites are among the hottest growth areas on the Internet.

While auctions are clearly designed to generate revenue for the sponsoring sites, there is a key characteristic they share that differentiates them from other e-commerce applications: Many B2B auctions are true Internet-based exchanges. Two B2B auction-type marketplaces worth a look are www.dovebid.com and www.tradeout.com.

The Reseller Model

Many B2B marketers rely heavily on distributors, resellers or partners to generate revenue. This is very common in the high-technology sector, especially in a global economy where selling products might be more efficiently done through indirect channels.

Depending on the type of product or service you offer, the reseller channel may enhance or even dramatically change the item you sell. The reseller channel may become an extension of the company’s direct sales force (which, if it is not handled properly, can create channel conflict situations harmful to prospects and customers alike).

For example, Sony caused a furor in February 2000 when it launched a site to sell consumer products online in Japan, effectively competing with its national dealer networks. Since Sony already owns 2,000 Sony Shops throughout Japan, the move could potentially cannibalize dealer sales.

How do you apply the reseller model to Internet-based order generation? Part of the answer depends on the type of relationship you have with your resellers and how they sell and deliver your products or services to the end user. If your resellers will allow it, consider contributing information to their web sites. Also consider the possibility of funding e-commerce initiatives with the goal of obtaining “site prominence” on resellers’ sites for your products.

Another possibility is exploring partnership opportunities that link your organization together with key resellers. Joint email campaigns, combination banner ads, cooperative lead and order generation web sites, and web communities or “super-sites” benefiting several noncompetitive organizations are just a few of the possibilities. An excellent example of a site designed to service business partners is IBM’s www.teamplayersprogram.com.

The Direct Selling Model

Direct selling through telemarketers or a sales force is another common B2B selling model. Although the direct selling model is likely to survive, it is undergoing dramatic change as businesses feel the pressure to cut selling expenses and improve sales efficiency.

Direct selling will always have its place in consultative and complex selling situations. It is difficult to replace a live sales call when it comes to selling highly technical or high-end products and services. Yet the Internet holds real promise as a tool for enhancing the sales process and for continuing the sales cycle in the absence of the salesperson.

Internet telephony offers one intriguing way to take advantage of direct selling. Technologies that integrate telephony with the web make it possible for telesales representatives to jump in during a prospect’s web session to assist by answering questions immediately. More and more sites are incorporating “call me” buttons and other forms of Internet telephony. As a result, online ordering is being enhanced with live voice support.

The Internet-enhanced direct selling model can also facilitate the traditional sales call. A salesperson could walk into a prospect’s office and make a sales presentation that was absolutely guaranteed to be consistently the same, anywhere in the world, regardless of that salesperson’s personal knowledge base. That could happen by adapting a web-based presentation, such as an online seminar, for the specific selling situation.

After an online seminar is created, it can be captured and modified for any salesperson to use. Loaded onto a notebook computer and called up locally through a web browser, the seminar becomes an interactive sales presentation. The salesperson has instant access to it, without the need for an Internet connection.

Similarly, while in a prospect’s office, the salesperson could access the company web site or a private intranet or extranet to inform and educate the prospect and facilitate the sales process. If the prospect is ready to buy, contracts and product ordering information could be available to the salesperson over the web. The salesperson could even place an order and receive an instant electronic acknowledgment from his company all while the salesperson is sitting right in the prospect’s office.

Regardless of the selling model, Internet-enhanced order generation can have a very positive impact on your sales process. You can either augment the way you sell products and services with the Internet, or transition to the Internet and eventually replace your existing selling model with an Internet selling model.

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