The Buzz in B-to-B

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Ten years ago, the American Marketing Association declared the 1990s to be "The Decade of Marketing." Regrettably, most traditional business-to-business companies just sat it out.

All the action in b-to-b was on the plant floor and in the back office. Brand equity dissipated in a decade of neglect, disintegrated marketing communications and a veritable lust for short-term ROI. Shareholders enjoyed huge returns produced by executives adept at driving out costs, including those ordinarily associated with advertising, promotion and public relations.

Even now, with b-to-b as the zeitgeist of the Internet economy, its growth opportunities are mainly cast as supply-chain efficiencies and cost-reduction strategies.

To be sure, b-to-b e-commerce promises fundamental transformation of place as the fourth "P" among marketing's product, price and promotion, as entirely new channels of distribution emerge as e-marketplaces. Still, champions of the b-to-b revolution see it mainly as a renaissance in procurement -- the realization of the purchasing agent's wildest dream.

How frightening. The purchasing agent's wildest dream is the sales and marketing executive's most horrifying nightmare. The purchasing agent's raison d'etre is the reduction of all value to commodities -- causing apples to compete with apples. The marketing executive's cause, on the other hand, is the victory of oranges.

There is now little doubt that b-to-b e-commerce is going to turn the world's widgets into commodities faster than ever. Forrester Re-search prophesizes $2.7 trillion in b-to-b commerce by 2004, with more than 74% of that coming from new e-marketplaces and b-to-b vortals.

Purchasing agents will be able to extract pounds of flesh online as products compete for their affection in reverse auctions, side-by-side price comparisons and new agent shoppers. All these transactions will roll up to the chief financial officer in enterprise applications that train spotlights on anything so irrational as a "relationship" the company may enjoy with a supplier.

That's really bad news for most b-to-b marketers, because many strong business brands are just houses of cards held together by the rotting epoxy of long-standing personal relationships, secure distribution channels and barely discernable differences in product features and functionality. Remember that one company's supply chain efficiency is another company's loss of market share and profit margin. The emergence of b-to-b e-marketplaces could provide the table tremor that sends these cards tumbling.

That is, of course, unless senior management in business-to-business companies wakes up to the notion that there is a demand-creation side to their businesses, as well.

E-commerce infrastructure installed for reasons other than facilitating growth and serving new needs could actually hasten the natural deterioration of value in the mind of the customer. E-commerce must be used to add new value, attract new customers, as well as seed and cultivate new markets. E-commerce is not just a supply-side efficiency; it's a demand-side engine.

The voices of those experienced and schooled in the disciplines of demand creation have been eerily silent amid all the buzz over b-to-b. They have to rise above a clamorous throng of technologists, venture capitalists and digital hyperbolists.

The discussion and commentary on b-to-b is not being led by marketing people, nor are we setting its agenda. Technology integrators are defining the e-commerce discussion. And, frankly, they're not saying a whole lot about how and where the processes of demand creation fit into their schemes.

They'll talk about low-cost EDI. They'll talk about sales force automation and supply chain strategies. They'll talk about distributor interfaces, logistics and network administration. But nowhere will they talk about brand equity, prospecting, new product roll-outs, sales promotion or publicity. It's as if the e-commerce gurus envision transaction pipelines free of any form of suasion.

The big growth numbers projected by industry analysts for business-to-business e-commerce will not materialize unless senior management and its technology alchemists assign a higher level of importance to the role that demand-creation activities play in persuading customers to engage in commerce in the first place.

It's as if those leading the e-commerce discussion think of commerce as only the consummation of business intercourse in transactions, as if there is no foreplay in commerce. Just because you install a checkout conveyor and cash register does not mean that you'll engage in commerce.

President Calvin Coolidge once characterized advertising as "the spiritual side of enterprise." We agree. Those of us in marketing communications understand that people buy for more than just solely rational reasons. Often they buy for entirely irrational reasons.

The determinists no doubt would say there are genetic, neuropsychological and biochemical explanations for why we love and laugh and cry. But it's the modernists' lie, this idea that everything can be cornered, codified and corralled in systems, processes and workflows. There is magic and mystery in the conduct of human relations, more often worked out through our symbols and icons, our cultures (popular and historical), our literature and lore, our senses (particularly of humor) and our emotions.

Marketing communicators, good ones, do their good work in this realm of influence. We do not attempt to systemize or codify human action, but rather to adorn it -- even for widgets.

The word "persuade" comes from the Latin for "to urge through." As companies move to establish elaborate schemes for conducting e-commerce, they'd do well to appreciate the critical role that persuasion will continue to play in urging customers and prospects through these digital labyrinths. They'll also do well to understand that these brilliant engineers configuring their e-commerce infrastructures are by no means masters of persuasion.

For b-to-b to realize its full potential, the persuasion of customers and prospects must be factored in. Persuasion is done by those who know how to persuade. We are all persuaded by more than just lowest prices, bottom lines and correct specifications.

Rationality, stark as it may sometimes be, isn't always attention-getting. We gain attention with the wink of the eye, the furtive glance, the curl of the smile, the alacrity of the wit, the flair of our apparel, the tragedy and comedy of our stories. Computer-distributed communication isn't going to change this at all. Artists tell these tales, not systems engineers.

The spur of rapid commoditization will give rise to tens of thousands of new business products and services in the decade to come. There will be new stories to be told and exciting new ways to tell them. The truly future-focused b-to-b marketer need never worry about begging bread.

Richard A. Segal Jr. is chairman- CEO of HSR Business to Business, Cincinnati.

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