July 3, 2022

Article 7.9


This scenario is the #2 footnote for our article entitled "WEB STRATEGY REASSESSMENT TIME"(Article 7.7). If you havenít read the article, please read it first so that you might better understand the thinking behind this vision piece.

This potential plan would be most feasible for the following channel players:

    1. A large, preferably national wholesale chain;
    2. A manufacturer with an exclusive or selected national network of distributors/dealers that could work through a joint venture or limited partnership arrangement; and
    3. A highly disciplined distribution buying group that also has a national or international network of members who could joint venture together.


  1. Start this venture by having inside salespeople at each distribution facility survey the in-calling customers (from one target, homogeneous customer segment) about their Internet usage status. Ask them: "Are you wired? If so, whatís your e-mail address? And, what sites have you found to be the most useful?" If they are not wired, ask them - " How interested would you be in having us set you up for a free, 30 day trial of an Internet on-ramp service? Included in this offer, we would provide some basic training on how to find answers to any problem that you might have at a web site designed just for folks like you."
  2. From the 15 to 20% of the customers who are already wired, choose some of the best, most progressive ones (their recommended sites are a clue) and invite them to attend a co-creation, planning committee meeting for GCC. We can assume that 1 to 5% of our customer base are web-heads who would be excited to help conceive, populate and participate in a community building site for professionals like themselves. Because these volunteers will eventually prove to be a scarce resource, we should seek to get them totally committed to creating and participating in our site before the competitionsí knock-off efforts get under way.
  3. From the unwired group of customers, prioritize the accounts by which is most excited and for which you would like to do a valuable favor. Then, have your new, pony-tailed installer (PTI) start calling from the top of the list to find out what they already have as far as necessary hardware, and then schedule a time to get them wired and give them some start-up surfing and e-mail skills. You might want to investigate the economics of lending them an "Internet appliance" for the trial.
  4. The PTI will: a) issue them an e-mail address (theirname@gcc.com); b) set their browser default to GCC; c) show them how to use what is at the site; and d) teach them how to type in new requests to the "newsroom/research department." The PTI also will have them choose which topics from many and fill in the blanks for new ones that they might want news push service for. If our distribution divisionís site (ourcompany.com) is ready, the PTI will show the customer how to click on the distribution firmís icon at GCC, enter their PIN and then do company specific stuff like checking account info and entering orders for which they might get a slight discount.

  5. There should be a new 800# to the newsroom at GCC for help from human beings if e-mail doesnít suffice. It is important that GCC be a separate legal entity with some core, new employees at a different location with a totally independent mission. The traditional business will then pay arms length fees to be on the GCC site; this will set the fee structure for all future suppliers that want to be on GCC. The separate legal structure will allow for fund-raising down the road which may be necessary depending upon the scope of our plans. We most probably should ramp up the GCC as fast as possible to dominate the on-line service option for our channelís end-user customer segments.
  6. Then GCC will be off to the races, building and responding as customers arrive to request solutions. The sites compelling content will come from a variety of places. GCC staff will regularly surf the web for appropriate information for the customers. The staff will review and rate all of the nuggets and include hot-links to the source whenever possible and appropriate. The goal is that the customer should never have to surf themselves, because GCC will have done it all for them in a centralized, value-added way.
  7. GCCís newsroom and research department will generate a lot of the original, customer-driven content as a by-product of answering customer requests. If one customer has a peculiar need, then it is likely that others like them around the planet will eventually be looking for the same solution. So, all research answers can be placed in multiple places on the site and pushed immediately to those who have already pre-registered for that particular type of information. The goal is to kill thousands of birds with one excellent stone. The quality of the solutions, the speed that they get to the customer and the global breadth of subsequent customer learning will be far superior to what any field sales rep could do on their own, one customer at a time.

    We might consider targeting our best, problem-solving, bottom-line growing repís account base for being wired up first. The rep's goal would then be to turn the customers on to GCC as they reduce the frequency of their field visits. Then the rep could spend increasing time in the newsroom solving problems for their customers and the planet too.

    A third and eventually biggest source of content at GCC will come from the customers themselves. First, the core community builders will generate lots of content early on. Then, all customers who learn to "dialogue" in both public chat/bulletin board areas and within their own private, secure "advisoryboards" will generate their own new type of wisdom.

  8. Content also will come from informational sites to which we will inter-link. Some will be sites that take the customer away from GCC. Others will be ones that are hired to provide seamless, transparent value-added. These inter-linking partners will help us quickly cobble together as close to 100% of our customersí total informational needs as possible greatly exceeding our traditional, product centric information efforts.
  9. From the beginning, our biggest goal should be to sign up as much of the national (global) target group as fast as possible and lock them into a "community." If we succeed in providing a valuable site, we can then encourage customers and their respective associations to further promote the site planet-wide. Community switching costs for the customers will be, in the longer run, our biggest sustainable edge over imitatorsí sites that will always offer lower prices for the industryís commodity goods.
  10. We must go for global, dominant marketshare quickly so that we can use Internet economics against the clones before they use them against us. Internet selling sites have enormous operational economies of scale. The big get bigger, better, cheaper and more profitable until they have a monopoly if they move first, fast and smart. For the fixed cost of creating and maintaining GCC, many more users can benefit from it and contribute to it for negligible incremental cost. The first customer-centric site will get huge word of mouth PR; the second will get little. If someone can achieve lock-in of 70+% of a national (global) customer niche, the game is over. Imitators can never hope to get the same economies of scale for continuous learning, continuous improvement, and commercial value extraction.

    Lock-in to GCC can happen if we can insert our new site into the customersí daily routine due to our push news service; their need to check e-mail frequently, and their desire to chat with their buddies in forums and within their own private advisory boards. If we can master the art and science of personalizing and customizing each userís experience and value from the site, plus offer them a piece of a tribal, affiliation group experience, then they wonít leave easily Ė their buddies wonít be anywhere else! If we are really good, maybe we can turn the site into a cult experience like Apple did with their Mac users and Harley Davidson has done with their motorcycle customers.

  11. If a distributor happens to sell a customer segment comprised of small owner/operator businesses, then they can potentially offer them many more business solutions than if the customer segment is an industrial Ė buyer, user or specifier. Small business owners are intellectually isolated, staff poor, buyers of a variety of operating goods and services and not wired Ėyet! For them, GCC might source, negotiate and sell - insurance products, bank loans, vehicular needs, etc. For all of these needs, there is the possibility of negotiating win-win-win deals that leave GCC with virtual re-seller commissions, just like AOL and Sabre.
  12. For the buying influences within large commercial or institutional accounts, there will be less total selling opportunities. But, the data we can capture about who is looking at what web pages and what their problems are that are e-mailed in could have great value to manufacturers. They will want to make end-users targeted offers, engage them in on-going dialogue, and incorporate them into real-time marketing and innovation cycles. The infomediary again should be able to create positive arrangements for all three parties.

  13. As for traditional product sales, we should hustle to sign up fulfillment distributors in all areas of the planet that we donít serve. Listing and advertising distributors and manufacturers will have to pay the same fees that our sister distribution division will have to pay to GCC. Putting our biggest head-to-head competitors on the site with a comparative shopping software capability will not be appealing to our sister distribution division, but the customer will eventually demand it. And, if we control enough customers, competitors will have no choice but to pay to be there.
  14. Of course, our sister division may get all of the best ad spots at a charter member rate. And, with a head start in understanding the new digital marketspace, it will presumably always be a few innovative steps ahead of the me-too competitors in this new medium.

We could go on, but this scenario must necessarily be a starting outline. Each channel will have to make modifications to the plan which itself must continually be rethought every six months to keep in line with latest web technology developments and trends. The key point is that someone is going to try to capture our customers in an on-line community by giving them 100% of whatever they want, their way, right now via the Internet. Incumbent distributors have a start-up cost advantage for doing this, because of their existing account rapport and sales organizations. National distributors or alliances of distributors would have economies of scale and reach compared to local or regional ones.

Who will see and embrace this entire vision first and fastest? If you find this planning scenario compelling, then so might other best, progressive distributors and manufacturers who are also reading this scenario right now. Although this vision is now out of the bag, it is only a rough road map; there will be lots of gap-filling, experimenting and learning on the hoof that will have to happen. If you have interest in pursuing a plan like this, let me know if I can help further by e-mailing me at bruce@merrifield.com or calling us at 919-933-7474.

Merrifield Consulting Group, Inc. Article 7.8