Canadian businesses testing models for selling and marketing online

Canadian companies' use of the Internet to sell and market their products and businesses has evolved far beyond setting up glorified online brochures. Many have begun to launch unique sites and campaigns geared to certain segments of their audience in an...

Canadian companies’ use of the Internet to sell and market their products and businesses has evolved far beyond setting up glorified online brochures. Many have begun to launch unique sites and campaigns geared to certain segments of their audience in an effort to ramp up relationships, as well as sales.

In the last several months, Grand & Toy, Nike and Sprint, to name just a few, have launched Web site initiatives and portals targeted at their business-to-business customers – all are hoping to use their respective sites as a way of transacting electronically, while enriching existing and new relationships.

But according to many industry insiders, that’s only the tip of the massive B2B iceberg. The majority of Canadian businesses out there are still unsure about how exactly to go about selling and marketing online.

‘When we asked companies ‘how important is the Net to your business?’ and ‘how important is B2B trade?’ 36% say it’s very important or critical,’ says James Sharp, a Toronto-based analyst with Forrester Research of Cambridge, Mass., which recently surveyed 50 Canadian firms about their expectations for the Canada B2B Futures report. ‘When we asked those same companies to look out to 2002, 80% think it’s very important or critical. So there’s definitely recognition that this is an important paradigm moving forward.’

Forrester predicts that by 2005, $247 billion of trade, representing 18% of all B2B transactions, will be done online in Canada (leading the charge are Canadian companies in four sectors: motor vehicles, computing and electronics, petro-chemicals and paper and office products). The most striking finding, however, was that of all the firms surveyed, only 16% have a real clear sense of direction as to what that strategy might be, he says. The report cites fears on behalf of executives of losing touch with customers and having their products commoditized.

On the marketing front, pundits say Web technology – which can identify users, track their order/surfing behavior, and identify things that might not be available on the site – has given companies the ability to try to understand the unique needs of each customer, among other things.

But B2B marketers are still struggling with fundamental things like identifying and understanding their particular audiences, says Sylvia Bauer, VP, corporate marketing at Wideframe. The Toronto-based interactive firm worked with Sprint Canada to create a small business portal to support, at least in part, the integrated launch of the telco’s unified messaging product. The duo’s objective was to drive people to the site, educate them and ultimately encourage sales. The effort became one of Sprint’s best-performing campaigns, thanks to a ‘ton of research’ and the fact that it was part of a larger integrated campaign, she says.

‘Understanding your audience seems so basic, but it’s not being done by everyone out there in this space,’ she says. ‘Marketers are starting to get smarter online. But the online world is complicated and untested, so we have to start with a client’s objectives and meeting customer needs.’

Web sites should be used as a selling tool, she says, but also as an information forum and a relationship enhancer.

But according to New York-based Jupiter Media Metrix, survey data show that only 2% of North American B2B companies have Web sites that feature an easy-to-search knowledge base for customers to use on their own. It also found that B2B companies are missing basic customer service capabilities that could improve online customer relationships and build trust – for example, 65% responded to e-mail inquiries only within 24 hours, and 29% did not respond at all. B2B buyers are likely to simply leave a site if they can’t find what they’re looking for, warns a Jupiter report.

‘What we’re seeing is that many companies have gone through initial steps of setting up Web site – though they are not always transactional – but that often doesn’t give them what they expect out of it. For one simple reason: nobody knows [about the site],’ says Luc Filiatreault, president of Bell Zinc, a division of Bell, which operates the BellZinc.ca business portal offering goods and services to small and mid-sized businesses in Canada.

‘The worst thing for many companies is to build their own Web sites – unless they have huge marketing dollars to throw at it, they’re not going to get the traffic. That’s why B2B portals have been created,’ he says.

Last month, BellZinc.ca announced plans to acquire competitor Onvia.com – the main driver for the deal was Onvia’s Canadian customer base of 125,000 Canadian companies, bringing the combined operations’ client count up to approximately 200,000 Canadian businesses.

Forrester’s Sharp identifies the emergence of e-marketplaces – online trading hubs, catering to buyers of a specific industry, where multiple companies will connect to share information and products – as a way of indirectly satisfying the needs of customers, and one that is proving quite attractive to Canadian businesses. Executives were bullish on e-marketplaces, according to the report – at least 48% expect to sell through e-marketplaces in 2002, up from 28% today.

Earlier in the spring, for example, Procuron of Toronto opened its doors – the electronic marketplace, backed by CIBC, ScotiaBank, Mouvement des Caisses Desjardins, Bell Canada and BCE Emergis, is targeting the country’s largest businesses. Meanwhile, General Motors, Ford Motor Company and DaimlerChrysler announced plans to combine their efforts to form a business-to-business integrated supplier exchange, creating one of world’s largest Internet-based marketplaces. The venture will offer open participation to all auto manufacturers and their respective market of suppliers, partners and dealers.

Moving forward, these types of public marketplaces will co-exist along with ‘private’ marketplaces or Web sites (whereby a company will set up its own e-procurement system or point-to-point network with a partner [or with partners]), says Marc Duhamel, VP, marketing and communications with Montreal-based Mediagrif, owner and operator of several international marketplaces, including The Broker Forum, a marketplace for brokers and distributors in the electronic components industry. All told, across its 10 marketplaces, MediaGrif caters to more than 10,000 companies.

Private marketplaces, or independent corporate sites or e-procurement systems, he says, allow marketers to cater to their existing customer or supplier bases, and ultimately create market intelligence by monitoring transactions. Public networks or e-marketplaces, on the other hand, says Duhamel, enable companies to broaden their reach and find new suppliers and buyers.

‘I do believe there is some confusion as to how businesses should go about doing it – selling and marketing online. There are not enough specialists out there yet. But even though businesses are a bit hesitant now, they will get into it – whether it’s doing e-commerce on vertical marketplaces around the world, or through their own electronic channel with suppliers and buyers. It is too simple, economical and efficient not to.’