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Small Business, Google AdWords and B2B Marketing in a recession

If you think about it, most jobs,innovation and entrepreneurship is in the small sector. Strangely textbooks and academic work in  B2B,Supply Chain and Innovation focuses on large organizations- perhaps because large organizations are potential employers for students who read textbooks  and have been traditionally employed by large organizations. The current economic situation has many major organizations in disarray with employment being uncertain for existing managers and on hold for fresh recruits.

Students at my B2B (Organizational) Marketing class at University of New Haven are participating in the Google Online Marketing Challenge (GOMCHA). They have a presentation scheduled on April 8, Wednesday and the University announcement is here.

The students have been doing a great job and have focused on creating AdWords for B2B marketing in a recession for the seven area businesses. Google AdWords puts power in the hands of a small business who can start with a very small budget- unlike other traditional advertising. The GOMCHA itself is supported by Google who have given $200 of ad credit to each student team.Students add the Internet Marketing expertise to their resumes and I think several of them will become entrepreneurs. The student chapter of the American Marketing Association is managing the event.

CRM on iPhone

The new iPhone 3G is great, although being tied down to one carrier (AT&T) might be constraining for some as are the extra charges for Internet access. However, it is really a great device particularly for those who need to get onto the web while on the go. And now CRM vendors like Salesforce.com and biggies in the ERP business Oracle and SAP are getting into top gear to provide access via the iPhone 3G. Check out the scoop on all of this in the article here.

Driving the CRM application to the iPhone or Blackberry will certainly improve adoption of CRM software. More so, in these challenging economic times when new business is difficult to get and existing customers might have needs that businesses might find less costly to service.

Small business,gas prices and the Internet

Luckily for bigger organizations Internet adoption had come before the -$4/gallon gas prices. Since last year I was hearing about major organizations cutting empty office space because most people did knowledge work and preferred to work from home and come in for meetings. Yesterday the small Gloucester Township, New Jersey was reported to be considering closing municipal offices on Fridays to save 35000 $ in heating and cooling costs. I guess Gloucester City can manage most service activities from its website or at least get more applications on-line. Both citizens,employees and the town administrators would be happy so long as the town tax for next year is contained !

Small businesses, like your neighborhood plumber,on the other hand are extremely hard hit.Most rely on traditional advertising including painted vans (that move with gas) to spread their marketing message. A majority do not have websites and those that do -have no real system to keep track of inquires or sales leads and just can't afford fancy customized back-end databases to provide customer service. However, this very large engine of  the American economy is realizing the potential of saving gas and costs  through transferring some of  its business functions on-line. A day may not be far when your plumber gives you a recorded message to fill up a web form with your job details or check progress on-line on an ongoing project!

Is your CEO more willing to meet customers than suppliers?

For quite some time I have been trying to figure out the practical differences between supplier  and customer relationship orientations in B2B relationships. In other words, the differences between upstream and downstream relationships that a firm must have.

Firms are becoming more and more alert to having good supplier relationships having realized that they need to have great suppliers who are part of the team. But the focus is always downstream to the market. Consider how easy it is to get your CEO to go meet a customer than go meet a supplier....

Why is this so? Because organizations are market facing and without customers who pay the bills you can't pay your suppliers !

It is for this reason there is much more IT efforts on the front end of the customer face with Customer Relationship Management (CRM) and Sales Force Automation (SFA) softwares  rather than the slower growing Supplier Relationship Management (SRM) modules in ERP systems. The Supply Management department is generally on top of critical supplier relationships because a supply gap can be catastrophic, career wise for the supply or procurement professional. While the same logic applies to the Marketing department, the CEO lends a helping hand because the specter of competition for good customers seem much more real than good suppliers.

Figuring out supplier-customer relationships

I enjoyed the article by Dr. John Gattorna in the Supply Chain Digest based on his book Living Supply Chains. John Gattorna obviously has years of experience and therefore is rightly incredulous as to why organizations both on the selling side and on the buying side, don't take care of their good suppliers and good customers. Dr. Gattorna offers some good actionable recommendations that basically urges both buyers and sellers in B2B to stay true to their best customers and suppliers both in words and in deeds.

The question is - why do organizations on the selling side keep "wasting" resources on difficult customers and vice versa. The relationship marketing literature gives us a clue from the sociology of marriage(I keep writing about this in my own papers  and  Dwyer,Schurr and Oh ,1987 - Journal of Marketing is the neatest summary). Somehow it is always more "exciting" to to get "new" customers or at least waste resources on "difficult" customers like dealing with several difficult mistresses. When it comes to getting your marriage to work, you need to follow simple (but boring ?) things from the Reader's Digest and if you prefer television - you can follow Dr. Phil !

I guess both marketing departments and procurement /supply management departments don't just "get it". Dr. John Gattorna's advise should help.

So what is the big deal with "Sterling Service Contracts" ?

Well for one,  the new Sterling Service Contracts , gets linked to many of the categories that I blog about! And that is a lot of categories...

Some of the things that Sterling Service Contracts will do includes, and I quote from Sterling's press release:

START QUOTE:

• Storefront capabilities that provide customers and partners with a personalized and branded buying experience increasing loyalty.
• Intelligent order orchestration that determines the most efficient and least costly location to fulfill an order.
• A 7000+ member logistics network that reduces the cost of inbound and outbound shipments through optimization, automation, and collaboration with carriers.
• Network-centric WMS that reduces inventory levels at each stocking location by managing inventory across all locations as a single inventory pool.
• Supply Chain Visibility capabilities that balance supply and demand by collecting, summarizing and displaying inbound supply information in a usable, understandable and actionable format.

END QUOTE

Sterling is probably not the only supplier offering this bundle though Forrester Research does think that the product is a step closer to the "perfect order". What's "perfect" about the concept and so fascinating is that it brings alive a lot of organizational theory that was developed for years and years before IT and the Internet made all this a reality.

Skype in Salesforce.com

The news that Skype is available with Salesforce.com is interesting for two reasons. First, Sales Force Automation (SFA) systems can be introduced with or without ERP particularly if they are web based like salesforce.com. Second, innovators  who really use SFA will certainly try Skype particularly calling computer  to phone.  I use red italics for "really use" because there is large evidence that Sales Forces are wary of SFA adoption- but perhaps the Internet and easy applications and the benefits of collaboration might be helping the adoption of SFA along. I am sure that time will tell but going by some of the comments on this interesting development on the web, the jury is still out on how the Skype and Salesforce.com alliance will pan out.

SAP Sapphire 07 Atlanta- creating a platform and applications

These days , my organizational studies and interactions encourage me to think as to what would be the situation if every organization had every process completely captured on an ERP system that was web based. These include internal processes like production planning, procurement, manufacturing, accounting and finance, sales and distribution. Also could include external stakeholders like the supply chain, customers, shareholders. In such a perfect world , there would be no "transaction" cost and managers would focus on their particular area rather than just trying to figure out their own page and whether everyone else was on the same page. SAP has been trying to achieve this utopia for its clients over the years.Here is Hasso Plattner's piece on communities from YouTube:

The reports from Sapphire 2007 at Atlanta indicate that the long years of hard work by SAP have started paying off ; and SAP has become a technology platform beyond just an application provider. Details of various proceedings of the conference appear here . Being a platform  is naturally much greater than being merely  an application provider  and combining applications with in-depth understanding of client businesses is the key to the success of SAP. As the report in Industry Week suggests, Coca Cola explained to Sapphire participants how their business works. With 1.3 billion units sold (per day) any simplification of Coca Cola's processes just drives directly to savings and enhanced customer satisfaction with better service. Guess what ? my friends at Pepsi tell me that they have moved to SAP and undoubtedly would benefit from the experience of SAP in that industry. This way Coke and Pepsi can focus on developing interesting offerings like "Coke Zero" and "Tropicana Lite" - core to their business !

Collaborative Product Definition Management (cPDm)

After a very nice Easter weekend, I found myself stuck like an old record on my April 1,post about how SFA happens outside the company and does not depend on existing customer data or processes, particularly when you are looking for new customers. Applications that can be quickly deployed,used and benefits seen make obvious sense for folks who want to sell more units of the same old widget.Therefore the Gartner report for CRM does not come as a great surprise. But enough!

What happens when you want to handle the front end of New Product Development?  This phase involves ideas, idea screening,concept and perhaps prototype development and concept testing. With global teams working simultaneously on projects web based PLM applications are a big hit. This Collaborative Product Definition Management (cPDm-interesting  abbreviation) )  segment is doing great and fore casted at almost 14% growth and will have 13B$ sales in the 30B$ PLM market in 2011 according to this report  -UGS corp is leading in this segment.

Once again, just as the SFA front end of CRM can be stand alone it makes sense that the cPDm front end of PLM  is also  finding a good market in stand alone SaaS  applications.

CRM -the front end of the Supply Chain

Today is April 1 and I wanted readers not to think of this post as some kind of a gag, at least not in it's entirety!I find that the media including the Internet has been rather quiet on this "April Fool's day". For example, while Google had a great search picture in 2000 on "Fool's day (check here) this year was quiet. In any event,I thought, I 'd start a new topic on this blog. This is the topic of CRM, the front end of the supply chain.

On the academic front I have been working for actually several years on some theory on how Sales Force Automation can be better adopted in organizations. In Supply Chain terms , the  front end of the supply chain includes distribution and customer relationships. According to me, the acquisition of new customers, with no previous transaction history  is- sales. If you truly want to mine your old customer data , you need to have past data in the first place. Ideally, a pretty solid data base of past dealings and interactions with the customer.  There is an explosion of activity in the CRM space going by the number of companies doing something or the other. For example, Sugar CRM has come out with a Project management suite ; Sales Force.com has added a customer collaboration piece; Oracle's Seibel is offering on-demand CRM as is Microsoft. I have been having a challenging  time explaining to a segment of my audience- viz. academics; that true CRM rests on the base of keeping track of financial transactions. Something must be sold and payment received to allow an entire back end of production, accounting, delivery, quality and satisfaction data to develop. If the customer has no prior "transaction" history, the prospect is that - a prospect and needs  a  Sales Force Automation  (SFA) approach. It was only today that I checked Wikipedia for CRM and felt somewhat comforted that Wikipedia has declared the CRM pages as "This article or section appears to contain a large number of buzzwords and may require cleanup.". I thought I needed to put a screen shot of CRM from Wikipedia today- just to say that CRM , it's conceptual definition and connection to SFA and the integration to the upstream Supply Chain will keep lot's of people busy in technology and business for years to come. No kidding!