Updated: Jul 10, 2018
Globalization is not the same as it used to be. Globalization is not just about decreased trade barriers and increased flow of information and resources. There are new technologies and models that drive progress. Here we talk about how blockchains and platforms are disrupting modern B2B sales networks.
Companies have to internationalise as they grow. This is anything but easy because every market is intrinsically different - competition, business customs and environment, as well as customer expectations vary from market to market. Despite the internet and ease of travel of the modern world, everything in foreign markets happens "out of sight" and there’s an obvious need for local representatives in thosemarkets, but building up your own sales network is not easy, nor cheap.
Most of the smaller businesses that I’ve had a chance to get to know tell me that their international path started ten or more years ago at specialized international trade fairs. There, we can present and explain our products to interested potential clients. At the same time, our experts have the opportunity to demonstrate their competences and the commitment to their business in direct personal contact.
There is always another benefit of attending trade fairs. It gives us the opportunity to meet potential partners, agents, distributors, or other kinds of representatives that see our offering as an opportunity for their business. But too often, great expectations are set, which are then not fulfilled. Mostly, because these representatives don’t have the required knowledge for effective selling.
Richer companies with a larger pool of employees have established their own subsidiaries then placed their own leaders and employed local experts. Naturally, this calls for larger investments and, despite wider control, comes with a completely different set of challenges, which also require special leadership knowledge and experiences to tackle.
I also had the opportunity to get to know some companies that use internationalization models similar to those of Multinational Corporations, that have developed such models throughout decades. Those companies have gathered vast experience and knowledge of international business. Thus, creating their own successful international network model by taking best practices from top corporations and adapting them to their needs.
What makes a successful sales network
A successful own sales network can only be called that when:
Salespeople tackle the market with a consistent and well-defined sales approach which reveals true opportunities, discovers and works decision-makers, and is able to monetize the competitive advantages;
Salespeople are truly enabled to execute this sales approach;
HQ Support is well defined as well as the procedures when and how to obtain it;
A yearly sales plan and monthly/weekly operational plan are defined;
Salespeople regularly review the pipeline with their sales manager, who has complete insight into their performance.
It is imperative that all of these factors are accounted for and even if just one principle is not implemented correctly, you are not getting the most out of your sales network - which is basically losing you money.
People are key, the system even more so.Salespeople are truly very important in sales but let's not perpetuate the harmful idea that it all depends on luck of getting the right person for the job. I'm telling you, it is more important that we know exactly what and how much the salesperson should be doing, as well as being able to tell whether they are successful or not. Of course, it is not always that black and white either - there are not only good and bad salespeople, but most of them are somewhere in the middle. This is where the system that helps us measure the performance and develop individuals appropriately comes in and is vital for success.
Have a clear strategy - an idea how you will conquer a single market. It doesn't have to be the right strategy, just as long as it is clear. After that, make sure to communicate it as often as possible. Only when you feel that you've been explaining the same strategy to someone for the third time, then it might be enough. Above all else, know that the strategy can be incorrect and that you have to be open to feedback. Do not forget that every success usually starts with a failure. To learn quickly and adapt is still better than wasting months or years not finding the right strategy.
Platform Business Model
Platforms have become so common in everyday life that we don’t often take a moment to think about how this business
model actually works. Some of the most successful and disruptive B2C companies today are platforms that are, in essence, only facilitating interactions between consumers on one side and service producers on the other. Uber connects drivers with people who need a ride, Airbnb connects apartment owners with travellers and Google started by connecting advertisers with target audiences.
Product vs Solutions
There are also platforms for business interactions and global business development, or at least they strive to be that. However, most of them, like Alibaba, are product oriented as their marketplaces only convey the product and other tangible information. Most B2B or other complex offerings, on the other hand, contain much more intangible value. As such they cannot be sold easily online or by remote sellers. These offerings (often also called solutions) require a certain minimum level of consultative, value-based sales approaches in order to be sold effectively. That requires some serious enablement and simple loose networks just cannot cope with that.
A platform for complex offerings a.k.a. solutions needs more sophisticated infrastructure to support the networking of producers and buyers. It has to fulfill the following major tasks:
Provide a standard format for the sales system (knowledge about how a solution is effectively sold and corresponding tools);
Have an enabled local consultant to work with the producer to prepare the sales system specially designed for the offering and fitting the platform’s format;
Deliver the system and required support to the sellers in remote target markets;
Provide the contractual framework for all participants and transactions involved;
Consistently maintain the quality of all processes, individuals, and information.
Platforms are threatening B2B companies
Businesses are realizing they have to transition to a platform business model. Either that, or they will soon have to exit their markets. This does not only apply to B2C companies that have been disrupted by platforms such as Uber, Airbnb, and Amazon, but large B2B companies as well. Traditional B2B companies are already starting to find a way to transform their competitive advantages into a platform business.
Many B2B resellers have already established online B2B e-commerce platforms, most commonly connecting SMEs with specialized but affordable suppliers from all over the world like Alibaba. There are also also large, established outsourcing platforms like Akamai that connect professionals in functions like IT, marketing, or other professional services with companies that cannot afford investing in establishing their own departments. Even machinery manufacturers, such as John Deere, have started platforms (MyJohnDeere Operations Center) as an addition to their business offering.
A platform in place of a sales network?
To reiterate, SMEs tend not to build up their own sales network for a few reasons:
It is very expensive to do so.
It takes a lot of time and energy to maintain proper control over the network.
They tend to lack the methodology and systems to support having a wide international network.
Local sales agents do not have the proper training and skills to sell their product.
The fear of unknown is also a problem. Many SMEs have failed to internationalize and set up their own networks which doesn’t strike confidence in those who are about to go down that path.
A platform would have to address all of these issues in order to attract users. Producers would be companies that produce a complex offering, be it a product or a service, and are unable to successfully sell it abroad. They could be unsuccessful, for example, due to inadequate presence in targeted markets, poor knowledge of foreign markets, poor understanding of various cultures in those markets, and specific challenges associated with dealing business abroad.
The other key factor for the platform’s success are its interfaces - consultants and sellers. These are smaller consultancies that are experts for their specific local market and would be united under the common platform. The owner of the platform equips those smaller consultancies with tools and methodology to efficiently sell complex offerings, which ensures a high quality of service, transferability and scalability of projects, and makes communication between different parties a lot easier.
Initially, consultants and sellers are clearly a necessary part of the platform, even if their interface role is performed in an old-fashioned face-to-face way. Consultants will perform some workshops with key salespeople on the producer’s side in order to extract and structure information as required by the platform. The sellers on the other side will execute a traditional sales process of meeting buyers/decision makers, identifying needs, providing offers, closing deals.
Later the whole process will be digitalized. Of course, consultants and sellers are rewarded for facilitating this process. Consultants will be participating in localization of sales systems and supporting clients with the system. Sellers in turn promote the platform to recruit initial buyers and act as a liaison between the platform and buyers.
In addition, this platform almost cries out for the use of blockchain technology as it evolves in the area of intellectual property, its value protection and distribution, using its smart contracts and cryptocurrencies. All this allows for the fantastic potential of decentralized value building internet to surge also in the area of B2B sales.
So, the benefits of a platform like that are clear. When producers are searching help from consultants and sellers, they are confident and trust the brand and the platform to have proper control and will deliver expected results. This, coupled with a low, foreseeable cost, enables them to quickly change or adapt their strategy depending on how successful they are in achieving their goals. Using external help would also be extremely beneficial for producers as they would spend considerably less time, focus, and resources on internationalization and spend them on important processes they are good at.
But why would consultancies be incentivized to join the platform? There are a couple of main benefits. Consultancies get the option to extend their service portfolio by offering a synergistic programme which can be offered to existing clients. Additionally, this offering can be used to penetrate additional target segments and offer already existing services to potential clients in those segments. Perhaps the most tangible benefit, however, is the simple increase of customers, projects, and cash-flow which are being funnelled through the network.
So, in the words of Marshall W. Van Alstyne: "Learn the new rules of strategy for a platform world, or begin planning your exit."