Net firms turn focus from b-to-c to b-to-b

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A pair of Internet technology companies, InterWorld Corp. and Annuncio, have moved into the b-to-b space in recent weeks, claiming they're responding to market demand. However, industry experts say that focusing on both b-to-b and business-to-consumer may not be as easy as it seems for the duo.

InterWorld, which specializes in producing Internet software for the seller, and Annuncio, a marketing strategy software vendor, say they'll support their b-to-b moves with customized sales collateral materials and direct mail campaigns. In part, their b-to-b strategy is to create more stable revenues. As b-to-c vendors, they were each primarily selling to Internet retailers, who have had tough times of late.

The good news is also the bad news for both companies, said Al Ries, president of the marketing strategy firm Ries & Ries Inc., Roswell, Ga. Since both firms have yet to establish a strong brand, the switch to b-to-b should be relatively easy. But it might be a mistake for the two companies to continue to sell both in the business-to-consumer and b-to-b space, Ries said.

"If you have a strongly established brand, it is difficult to make the switch,'' Ries said. " couldn't go b-to-b now because people wouldn't understand it. Since Annuncio and InterWorld are relatively unknown, they won't have as much trouble making the transition. But trying to be all things to all people-b-to-c and b-to-b-is usually a mistake.''

InterWorld segments b-to-b

InterWorld's second customer ever, Lexmark International Inc., was a b-to-b account, said Charley Rich, director-strategy and planning at InterWorld. Yet it wasn't until recently that the company decided to tailor software to b-to-b needs, he said. InterWorld has focused on delivering software for manufacturers, after extensive interviews with customers in the product-development process, Rich said.

"We realized b-to-b is perhaps too big a label,'' Rich said. "We had to segment the market and decided that we could address what keeps manufacturers awake at night.''

For InterWorld, the process of producing a b-to-b product was daunting, Rich said. In business-to-consumer, clients are focused on building sticky sites that hold customers for long periods of time. But, in b-to-b, automation that delivered results quickly is the top priority.

InterWorld's software allows manufacturers to manage catalogs across multiple domains, Rich said. Distributors and other third parties can offer goods for sale, while the manufacturer supports the underlying brand with content and services.

But InterWorld wasn't home free once it had customers using its b-to-b product. The company had to bring its salesforce up to speed on b-to-b approaches, and did so by hosting weekly Web conferences and hiring Current Analysis, Forrester Research Inc. and Advanced Marketing Research to develop reports that highlighted the company's strengths as a b-to-b platform. Finally, a two-week media tour helped set the stage for the b-to-b launch, Rich said.

Annuncio's Bright future

Annuncio, which today gets about 40% of its revenue from b-to-b, is launching a brand called AnnuncioBright. The new product includes numerous technical upgrades, including the ability to track leads generated by a marketing campaign and send them directly to sales-force automation systems, said Monica Nester, senior VP-marketing.

For an annual subscription of $240,000, Annuncio will host the b-to-b application for marketing departments and report back on the the campaign's progress. Previously, b-to-b marketers had been using Annuncio's b-to-c software and tailoring it to their needs, Nester said.

Annuncio developed a new sales kit for its sales force to support the b-to-b launch, Nester said. And seminars and white papers were also added to the marketing mix, said Kim Weins, VP-product marketing.

"We know these companies have complicated sales cycles and [we] want to provide them with a complete solution,'' Weins said "We've created some very focused marketing tools ... to bring that point home.''

Nester acknowledged that part of the b-to-b emphasis has to do with prosperity. As the fortunes of business-to-consumer Internet companies have dimmed, it behooves Annuncio and other software vendors to find a second source of revenue.

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