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APRIL 21, 2000


Know Thy Customer

Many B2B sites fail because their developers don't understand the businesses they hope to serve

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If you're among the thousands of entrepreneurs launching a Web site this year, you've probably considered a headache-inducing array of details. Here's something you may have forgotten: finding out what your customers want to do online.

"Very few companies have a deep understanding of how their customers do their jobs or use their products," says Paul Sonderregger, an analyst with Forrester Research Inc. in Cambridge, Mass., and author of a recent survey titled Why Most B-To-B Sites Fail. Each of the Web sites encountered by Sonderregger shared a single flaw: "Not one based its content on rich knowledge about its users." Some common mishaps: too little detail on pricing or failing to include a product's weight, so shipping charges can't be calculated.

Such problems could have been avoided had the companies sat down with clients while developing their sites. The trick is to approach your business from the customer's vantage point. What are they doing on the Web? What do they want to do? Are they interested in purchasing your product or service online? Do they want to use the Internet for additional support services? You might be surprised at what you learn. "We all get caught up in what we think is a great idea without finding out if anyone is even interested," says Hollis Thomases, president of the Bel Air (Md.) consulting firm Web Ad.vantage Inc.

It certainly worked for Affiliated Distributors, a King of Prussia (Pa.) outfit that helps distributors order industrial supplies and deliver them to manufacturers and contractors. Before launching its online initiative, Supplyforce.com, Affiliated surveyed more than a dozen of its customers. Here's what it learned: Customers needed access to a national, as well as a local, network of suppliers. They also were ready to move online immediately. As a result, Affiliated both broadened and accelerated its efforts. The site launched in November and now coordinates the efforts of 240 distributors.

If you've got the cash, it might help to get the objectivity of a consultant. It isn't cheap--hiring a market-research firm can cost from less than $10,000 for basic interviews to tens of thousands of dollars for sophisticated statistical data. If outsourcing is too pricey for you, Sonderregger suggests asking a few knowledgeable customers to navigate your site. "You can find errors with minimal expenditures," he says.

However you do it, the goal is to familiarize yourself with your customers' priorities and learn what they think you do well and your competitors do poorly. Such data are more important than ever. By the end of this year, according to Kelsey Group, 40% of U.S. small businesses will be online, scrambling for a piece of a B2B e-commerce pie that is expected to swell to $1 trillion by 2003. The biggest slices will go not to the hungriest, but to those who best understand their customers.


This article was originally published in the April 24, 2000 print edition of Business Week. To subscribe, please see our subscription policy at http://businessweek.com/smallbiz/contact.htm


By Eileen Gunn

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