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Top trends: Alliances, Net growth key in 2000

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Business Marketing's top 10 trends for 2000 point to unprecedented cooperation among key industry players and agencies.

While the Internet has been the great equalizer among business-to-business companies over the past several years, the near future should see old lions finally adapt to the Net, leaving younger companies to scramble to maintain their virtual lead. Many of the upstarts will see alliances with long-established companies as their best strategy to survive and thrive.

The following top 10 trends to watch in 2000 are based on interviews with top executives at b-to-b companies and agencies.

Corporate giants show Web clout.

In 1999's highly speculative venture capital environment, financiers with a first-on-the-beach mentality lavished investment dollars on start-ups that were the earliest to fill viable b-to-b Internet niches.

The result: Like the business-to-consumer space before it, the b-to-b Internet marketplace is now filled with neophyte companies, many of which are flush with cash and ambitious marketing plans designed to keep them ahead of non-Internet giants that they hope will continue to just not get it.

An increasingly loud chorus, though, is being heard: 2000 will see the awakening of the non-Net corporate powerhouses, and their clout will hit younger b-to-b companies hard.

"There's going to be a major fallout," said John Farrell, senior director-channel marketing for The Carlson Marketing Group, Minneapolis. "Who's going to be left standing? Those with the brand recognition, equity and capital to sustain existence, and those with the ability to deliver."

Kathleen Biro, CEO of Strategic Interactive Group, Boston, sees 2000 shaping up this way: "It's going to be the year of clicks and mortar, where the Fortune 50 match up physical distribution to the power of the Web."

Agencies as strategic partners.

B-to-b marketing agencies that cannot provide a full array of online and off-line services will find themselves less competitive than ever before.

Providing bread-and-butter advertising and Web development services will simply not be enough, said Tucker Greco, president, Greco Ethridge Group, New York. To survive in 2000's marketplace, agencies will have to rethink their purpose and provide services that are increasingly critical to their clients, such as venture capital funding, Mr. Greco said.

"There will need to be more of a partnership and less of a vendor relationship with a client," said Ken Strottman, president of Strottman International, Irvine, Calif.

A true global b-to-b explosion.

B-to-b executives in 1998 told Business Marketing that 1999 would be a year of globalization for their industries. And while that was certainly true, the past year's developments will be looked upon as minor when compared with what happens in 2000, say Net industry pundits and executives.

Internet b-to-b marketing and advertising will quickly follow the globalization path b-to-b manufacturing has undertaken, and increasingly be created and delivered outside the U.S., said Chris Burke, president, BtB Marketing Communications, Raleigh, N.C. To survive, agencies and companies will need to deliver locally tailored messages, he said.

Increased partnership focus.

There is a growing demand among b-to-b customers to get all their information from one source. As a result, former business rivals will be forced into sharing more information to serve mutual clients.

The efficiencies brought on by the Web will make big and small b-to-b marketers depend on each other for survival. "Lots of lions and lambs are sitting down together," said Tom Belle, exec VP of Gage Marketing Group, Minneapolis. "What's driving it is a real understanding that there is little in the marketplace that is mutually exclusive."

The rise of CRM.

A clear-cut approach to using customer relationship management software will become necessary in 2000. Vast and disparate information sources will increasingly need to be linked to help marketers serve far-flung customer bases in real time. In 2000, CRM software delivered over that most efficient of channels--the Internet--will become the product of choice, said Peggy Menconi, research director at AMR Research, Boston.

Simplicity.

B-to-b advertising and sales materials will increasingly shun technology jargon-heavy text for simple messages. Software will also become more layman friendly. America Online CEO "Steve Case has proven in the consumer space that simplicity is always the answer," said Mark Walsh, president-CEO of VerticalNet, Horsham, Pa. "CIOs are saying that it needs to be robust, feature rich. I think this is wrong. The b-to-b space will follow the consumer space."

Death of dot-com.

"No longer is the appendage of dot-com to your name going to be enough," said Goldberg Moser O'Neill's Mr. Massaro. "You'll have multiple dot-coms competing in every [b-to-b] category. You'll have to compete on the basis of merits rather than business model."

A merger frenzy or a spate of sudden deaths may ensue. "So many of these sites are being built on the public's money," said Greg Nickerson, exec VP-COO at Bader Rutter & Associates, Brookfield, Wis. "You'll either see them consolidated or flat go out of business."

Others say they see no impending slowdown. "Wall Street has shown no inclination for stopping rewarding companies for putting dot-com on their name," said Bill Lynn, lead global technology media strategist at Hill, Holliday Advertising, Boston.

Customer retention.

Customer retention will supplant customer acquisition as most b-to-b marketers' collective goal. It's a time-worn adage that it costs more to get a new customer than to keep an old one.

The trend is one that many b-to-b executives cited, though some questioned whether today's marketing forces are prepared. Many salespeople still have an antiquated mind-set in which the focus continues to be on acquisition, said Tom Eppes, president-CEO at Price/McNabb, Charlotte, N.C.

Web as primary source of information.

This year will see the vast majority of b-to-b executives using the Web as their first source of product and company information, making most paper-based direct mail and toll-free phone lines more obsolete. Marketers say the trend is a bonus for sellers and buyers alike, and that high customer expectations are fueling rapid growth in this area.

This trend takes on even more relevance when marketing to technical professionals such as engineers, said BtB Marketing Communications' Mr. Burke. "They don't want to talk to a person," he said. "If they can go to the Web at 2 a.m. in Taiwan, they're happier."

Marketing on buying hubs.

As b-to-b verticals such as New York-based 24/7 Media's Business-to-business network become mainstream places for completing transactions, marketing on these sites will become a favored tactic.

Some Internet executives say Web verticals are picking up where paper-based trade publishers left off. "Like the trade publishing companies of the past 100 years, we mimic and add a lot to that by having stupendously small but esoteric audiences," VerticalNet's Mr. Walsh said. "The URL is the gatekeeper."

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