The Buyer-Seller Disconnect, Part 331 May, 2006 By: Jeffrey Rowe
A tale of two surveys: What do recent reports mean to industrial sellers?
In the past two editions of MCAD Tech News I presented the results of two surveys about industrial sellers and their potential buyers and the apparent disconnect that often occurs when a seller's Web site doesn't provide what the buyer needs. (Click here to view newsletter archives.) One of the surveys was conducted jointly by ThomasNet and Google and the other was conducted by GlobalSpec.
Both studies attempt to explain buyer/seller behavior and results, but each does so in a slightly different way. The ThomasNet/Google study shows that although industrial buyers are increasingly relying on the Internet as a source for information and products, a major disconnect exists between online buyers and the suppliers. The GlobalSpec study outlines and analyzes buying behavior, what buyers are really seeking and why some distributors are more successful than others. In today's edition, I'll take a closer look at the two reports and compare their results.
Where Customers are Looking
It's no secret, and both studies agree, that a vast majority of buyers today use Web search engines and online directories as their primary sources for finding industrial products and distributors. Obviously, this is why creating and maintaining a highly visible engineering Web presence is such an important strategy for increasing visibility and awareness with target buyers. In addition, both studies show that there’s a lot more to it than that.
The Internet has clearly become the primary source of information for industrial buyers. According to the joint ThomasNet/Google study, 90% of buyers start with the Internet to source products and services. This trend toward sourcing online has changed the way that industrial buyers research, compare and eventually purchase products and services, drastically shortening the process -- going from weeks and months to now, in some cases, hours.
The GlobalSpec study found that while price is certainly an important factor in choosing a distributor, it isn't the only factor. It turns out that product availability and delivery are the biggest factors in choosing a distributor, followed by customer service and then price.
For industrial suppliers to effectively market products and services online, it’s important for them to know where potential customers are searching. But, like visibility, knowing where customers are searching on the Internet is only part of successfully turning Web site visitors into buying customers. It’s equally if not more important to know the specific type of information industrial buyers are seeking when they search for products and services online.
Whether or not buyers can easily find a distributor on the Web is obviously an extremely important factor in determining that distributor's online success. A majority of respondents to both surveys were using search engines or online directories as the first step in finding new distributors. This alone mandates that a well-placed Web presence in the engineering community is a vital strategy for increasing visibility, awareness and sales to the targeted audience.
Web-based distributors are quite a bit different than geographically based ones because the latter’s most important aspect is its location, whereas the former’s is navigation. Although some sites are better than others, most are much easier for specifying and comparing products than a paper catalog ever was. Industrial buyers are looking for specific product information and online tools that make researching, comparing and purchasing products and services efficient and intuitive.
The ThomasNet/Google study results pointed to a surprising disconnect between online buyers and sellers. Research indicated that if potential buyers managed to find a potential supplier’s Web site, they often found the information lacking. This indicates that most industrial suppliers are not providing the information or online tools that potential customers are seeking -- resulting in lost business.
Visibility vs. Presence
The most important step suppliers can take is to create and maintain a visible presence in all the places their potential buyers are looking for information. For example, these companies should advertise on the destination sites and search engines that attract industrial buyers. This will most likely result in increased quality traffic to a supplier’s Web site.
But this is not enough. You won't make sales if Web site visitors don’t find what they need once they get there.
Suppliers must provide all the necessary product and service information and tools that an online buyer needs to make a buying decision. This includes searchable online catalogs, application notes, extensive product information and pricing information. When dealing with design engineers, this also means providing downloadable CAD drawings. It’s important to keep all this information up-to-date and easy to access. This might mean a Web site revamp, but the potential return on investment through increased online sales justifies the expense.
Both surveys found the biggest area of buyer dissatisfaction to be what distributors include or do not include online. Because so many respondents weren’t satisfied with the information that distributors provide online, there is a gap that exists between some of the features that respondents stated are important for distributors' Web presence and their satisfaction with these same distributor's Web sites in actually delivering these features. This gap was found in areas such as up-to-date content, comprehensive technical specifications for products offered by the distributor and a completely searchable online catalog that can be readily navigated and includes the distributor's complete standard product line and customization options.
Both studies also agreed that just having a Web site was no longer enough for conducting business in today’s competitive environment. A real and compelling Web presence has become vital for distribution companies to connect with their industrial customers.
Only a Glimpse into Reality
The two studies provided some insightful information to Web-based industrial buying and selling, but I felt only provided a glimpse into the possibilities and realities of conducting business in the online frontier. For example, neither study mentioned vendors that offer quotes for manufacturing products, whether from stock or customized prototypes, short runs or on a production basis. Web-based companies that produce rapid prototypes of products also weren’t considered. Although these types of service providers do share some things in common with industrial product distributors, they also have unique expectations and demands placed on their businesses.
ThomasNet and GlobalSpec are both excellent starting places for any industrial distributor interested in building a solid Web presence. Other options exist as well, such as Manufacturing.net and the Web sites of trade associations affiliated with specific industries and disciplines, but these two will provide a good point of comparison. Do the research and decide which is best for you, your company and your customers both today and moving into the future.
About the Author: Jeffrey Rowe
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