Essay on "Business"

Essay 6 pages (2639 words) Sources: 10

[EXCERPT] . . . .

B2B Trends and Analysis

Business-to-Business (B2B) Trends and Analysis

Business-to-Business (B2B) trends that are making a significant impact in the UK and broader European market are the result of a higher level of accountability and focus on results driven by the global recession. As elusive as profitability has been for many enterprises, the trends included in this analysis have provided them with the ability to more effectively manage costs, risks and attain growth in new markets. These trends also point to the growing importance of technology as an enabler of greater trust between enterprises, their supply chains, distribution channels, and with their customers. The global recession served as the catalyst for significant change in UK and European enterprises. These trends are the positive results of the changes enterprises are making to survive and thrive in 2011 and into the long-term. The five most significant trends affecting B2B marketing in the UK and Europe include value-based selling, social networks and Web 2.0 pervasive adoption, the enterprise-wide adoption of Software as a Service (SaaS), greater emphasis on multi-channel management, and analytics including business intelligence (BI) being used for measuring the impact of marketing campaigns in real-time. All of these trends are predicated on how technology is being used to enabler greater trust throughout enterprises' value chains.

Value-Based Selling Is Accelerating

The recession that began in 2007 and is lingering today has been a catalyst of significant change in how enterprise sell to each other today globally, yet has become very significant in the UK and throughout Europe. Manufacturing companies who sell to other manufacturers and rely on B2B transaction velocity to survive quickly realized that selling on price alone drained profitability and margin. The old adage of "making it up in volume" was deflated in the recession so quickly many UK and European companies had to completely redesign their sales forces. Gone are the sales teams who promised much on price and delivered less margin and profitability. The sales teams who replaced them in 2010 and continue to dominate sales forces in the UK and Europe have a selling approach that is more focused on educating prospects and clients, less on the "hard sell" of pushing products or services on customers. This approach to value-based selling is predicated on being more focused on delivering solutions and becoming indispensible to a customers' success than on rely in price and the elasticity of a given market (Alderete, 2010). Figure 1, Purchase Experience Loyalty Drivers illustrates the approach to selling that has proven to be very effective in creating customer loyalty.

Figure 1: Purchase Experience Loyalty Drivers

Based on analysis of: (Alderete, 2010)

(Bacheldor,2003)

Value-based selling is also highly effective for mitigating customer churn as it provides a more effective approach to customer listening than any price-driven approach can potentially deliver (Wright, Riebe, 2010). While the recession brought the need for value-based selling to the forefront of many industries that rely on becoming the trusted advisor to gain additional sales, its use has accelerated sales cycles due to greater levels of communication (Zolkiewski, Lewis, Yuan, Yuan, 2007).

Social Networking and the Influence of Web 2.0

Of the trends that have most influenced businesses across the UK, Europe and globally, social networks and the platform of Web 2.0 technologies continues to the be fastest growing and most visible. The concepts of social networks are predicated on having an open, listening mindset as a company to better engage with customers in conversations they find relevant and useful (Bernoff, Li, 2008). Social networks are completely redefining many areas of enterprises' value chains throughout the UK and Europe as these companies rely heavily on customer relationships outside their native nations. This has led to social networks becomes a conduit for conversations and are completely rewriting the rules of customer relationship management (CRM) in the process. All of these aspects of the trend of social networking and Web 2.0 technologies are also completely redefining customers' expectations for service responsiveness and support (Raddats, Easingwood, 2010). For UK and European enterprises, the rush is on to capture customer loyalty using social networks, in addition to customizing Web 2.0-based applications. The design objectives of Web 2.0 are the main catalyst of this trend, and the graphical representation originally created by Tim O'Reilly, founder and publisher of O'Reilly media, is shown in Figure 2, Web 2.0 Design Objectives (Snow, 2006).

Figure 2: Web 2.0 Design Objectives

Source: http://www.oreillynet.com/oreilly/tim/news/2005/09/30/what-is-web-20.html

An interesting dynamic is also emerging from social networks is the development of entirely different segmentation criteria and strategies within organizations based on the insights gained (Agarwal, Malhotra, Bolton, 2010). In 2011, it is expected the majority of enterprises throughout the UK and Europe will also adopt analytics and business intelligence (BI), which is the fifth trend of this analysis. Analytics and BI are being used to analyze social networks and determine potentially new customer and needs-based segmentation criteria

(Agarwal, Malhotra, Bolton, 2010). The insights gained from applying analytics to customer engagement though social networks is showing that there are needs-based segments that are driven more by the experiences of using products and services, less on the price alone. This finding is having a profound impact on how enterprises are also segmenting services in B2B markets (Raddats, Easingwood, 2010). In conclusion, the role of social networks and Web 2.0 technologies is revolutionizing the B2B marketing strategies of nearly every company in the UK, Europe and globally. The need for authenticity and transparency is now pervading all marketing strategies, as trust becomes the new foundation for moving sales cycles forward (Bernoff, Li, 2008).

Growing Reliance on Cloud Computing and Software as a Service (SaaS)

The UK and Europe B2B marketing organizations are leading many other regions of the world on this third trend, which is the adoption of Cloud Computing and Software-as-a-Service (SaaS) applications (King, 2010). Figure 3, Evoution of Software-as-a-Service (SaaS0 illustrates the progression of SaaS from 2003 through 2014. UK-based and European enterprises are relying on SaaS-based applications to manage customer relations, automating their CRM systems using Salesforce.com for example (King, 2010).

Figure 3: The Evolution of Software-as-a-Service (SaaS)

Based on analysis of (Bernoff, Li, 2008)

(King, 2010)

(Snow, 2006)

B2B companies are among the most rapid early adopters of SaaS applications as their business models are highly data and knowledge-driven and often traverse broad geographic distances. Figure 4 shows the distribution of SaaS spending by category in EMEA for 2010.

Figure 4: EMEA SaaS Usage Rates by Application

(Source: King, 2010)

The recession has been a major catalyst of growth of enterprises' spending on SaaS, as this approach to gaining access to software is comparable to a lease, not a purchase. It is also delivered entirely over the Internet, which drastically reduces implementation times. Due to all these factors, SaaS will continue to be a major trend in the UK and Europe for the near future.

Re-focusing on Channel Management Relationships

Related to value-based selling, the resurgence of multichannel management and partner relationship management in the UK and Europe is being driven by the focus on keeping in step with customers to keep them loyal (Zolkiewski, Lewis, Yuan, Yuan, 2007). B2B companies are increasingly relying on their channels for the majority of their revenues, and when automated through the use of SaaS-based platforms, the benefits of reducing operating costs while increasing channel market share are beginning to emerge (Raddats, Easingwood, 2010). This trend is also accelerating due to the successful integration of channel selling strategies with value-based selling techniques (Alderete, 2010). Google has in fact begun work on channel programs in the UK and Europe to further sell their enterprise solutions as well (Quicke, 2009). The use of Information and Computer Technology (ICT) resellers throughout Europe to reseller Google Enterprise applications is setting the pace globally for the search engine company's strategies (Quicke, 2009). Figure 5 shows the distribution of channel management companies that Google is targeting with their enterprise solutions.

Figure 5: Channel Management in EMEA is Fragmented Yet High Potential

B2B marketers are redefining partner relationship management (PRM) strategies throughout the UK, Europe and globally by concentrating on three core business process areas. These include contract management, pricing management, and quoting management. B2B marketers face longer sales cycles than their B2C counterparts do. These sales cycles also involve many more members of company teams, from the finance and accounting staffs to quality management, services and support. The coordination of these much more complex B2B sales cycles through distribution channels is the catalyst of innovation B2B marketers are fueling in these three process areas. Capturing orders accurately and being able to price them profitability are the two B2B-oriented marketing needs that are forcing quoting and pricing management together. The quoting process is what often drives the fulfillment, or production of an order. The B2B marketing organizations in many companies are evaluating their advertising and promotions strategies based on the volume and accuracy of quotes. In several B2B marketing organizations the accuracy of the quote is also their responsibility, as marketing manages all new… READ MORE

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