As the power of the Internet has grown, it has made sense to enable procurement through the web – and voila: e-procurement. Online technology has now removed many technical restraints on online transactional systems, including those involving e-procurement. One such technology is ‘web services’, a standard mechanism whereby systems can talk to each other without a huge investment in integration services, thus opening up the door for easy, quick transactions and the exchange of data to take place. As marketers, the decision we face now regarding transacting online with our customers is not ‘can we do it?’

Yet ‘How should we do it?’

Where ‘e’ means value creation

Lots of people are getting excited about e-procurement, because like so much activity that has transferred to the web, there are clear benefits to both buyer and seller and real value can be created for both parties. Plus the profile of e-procurement has been raised by the government with its huge buying power and the various initiatives and framework agreements that go with it.

The increased efficiency of the transaction conducted on the web has benefits for all involved in buying or selling in a business environment. Paperwork, office staff, sales men, and so-called ‘middle-men’ – all of whom bite into margin for the seller, and add to the cost for the buyer – can be scaled down or virtually eliminated. Yet there is more to it than products, pricing and margin.

As marketers we gain more than just product sales by providing this online channel for business customers to buy our products. Like any new development of a sales channel, e-procurement provides an opportunity to for the acquisition, retention and development of customers where they engage more deeply and buy more. The key to achieving this lies in delivering value, not just the best price.

In markets where large-scale procurement activity centres around driving costs down for the buyer at the expense of margin for the vendor, companies need to provide additional value for their customers and move the focus away from cost.

If e-procurement is delivered as simply an online purchasing mechanism that is the same as your competitors, then there will be no differentiation for the buyer and no clear reason why they should repeat buy using your offering, other than that of price.

However, an online procurement application that delivers additional value to the buyer can prove an attractive option. The list can be as long as your imagination and include unique pricing agreements, integration with your customers’ own buying workflows (e.g. providing online sign-off processes, e-documentation, messaging) and access to manage detailed account information.

An example

Let’s use Greenwoods Communications as an example: a company based in Birmingham and employing 500 employees, Greenwoods is the UK's leading independent provider of custom-built solutions for telecom network operators and OEMs.

They have a catalogue of over 22,000 products that they sell to some of the industries biggest players. Steve Foster, the Marketing Manager had realised that consumable purchases would be driven into e-procurement and the company made the decision to invest in an e-strategy in 2000 and approached us to help achieve it.

The decision was a good one. E-procurement can be used to order from their entire stock inventory, the whole business has benefitted from the investment and they now have a real head start on any competitive late-comers trying to catch up.

Learning from the consumer sites

Greenwoods had learnt something from the B2C e-commerce websites; these sites learnt about service the hard way. Consumers are very fickle and adept at shopping around. They also have short attention spans, so they make decisions about sites very quickly.

If they buy something, and the service was poor, then the likelihood is they won’t return. The consequence of this behaviour is that consumer sites had to work fast to create highly enjoyable shopping experiences with great service to back it up.

People, whether consumers or professional buyers, now expect more. And they expect it now. They want to find your site straight away on Google, go directly to the product page, find the most useful information and see links to similar or related products. They want a quick and easy way to buy, and then be offered ways to help them interact with your site on an ongoing basis. This is just as true for B2B as it is for B2C sites.

A word about Search Engine Optimisation

SEO is a another technique B2C websites were quick to embrace. By making certain changes to both the content and technical elements of their sites, they could make them more attractive to search engines, and get their products higher up the listings.

In the B2B world, companies have been a little slower to recognise SEO as a strategically important marketing tool. They must catch up: SEO can be used to ensure that customers who want a particular part or product will not only find your site, but be delivered straight into your e-procurement area and be asked whether they’d like to proceed with purchase.

Using Greenwoods as an example again, what would happen if you are a telecoms buyer urgently needing a couple of hundred Modular Multi-Line Dialler, say a 99CG5002? Simply type this part number into Google and you’re instantly delivered a link to the page on their site where you’re ready to proceed with ordering.

Managing & Marketing

Once deployed on a site, e-procurement can be managed through sophisticated content management platforms allowing for for any authorised employees to add, delete and change any of the content on the site. Administrators might update part numbers, stock levels and product codes in an inventory system, which then passes that data to the content management platform.

Marketers play a crucial role role too: they are the best people to articulate the marketing message that surrounds a product set, create and upload imagery, decide on cross promotions, volume discounts and special offers. This is essential in ‘bringing to life’ the products you have to offer.

The end result of well managed e-procurement is a site that looks fresh, is up-to-date, accurate and full of useful, compelling information for your customers. All of which should give them confidence to engage for the first time, and then enjoy the habit of buying with you time and time again.

By Dan Martin,
chameleonnet

T: 020 7543 6871
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