Leads Searching for You

Last week, Microsoft announced the $6 billion acquisition of aQuantitative, an online ad specialist. Microsoft’s move is very consistent with the findings from Chapter Four of the new Facing the Forces of Change®: Lead the Way in the Supply Chain report (see pages 76-78, in particular). Customers will increasingly use the Internet as a primary way to gather information and find new suppliers even if they never buy anything online.

For more insights, I recommend you download the 2007 Distributor Buying Trends Survey Results. The survey was sponsored by GlobalSpec, a vertical search engine and online database. (Note: You will have to register to get the pdf document. I am not personally familiar with GlobalSpec, but their privacy policy indicates that registration info will be used only for their own marketing and not sold to a third-party.)

The survey included engineers, technical buyers, scientific professionals and others in the engineering, industrial and technical communities. Two-thirds of buyers sourced from 7 or more distributors, so the sample is a good one for understanding the typical (industrial) wholesale distribution customer. There was also a good diversity of products and services specified by the respondents, including chemicals, electrical components, material handling, fluid power components, and many others.

Here are two results that caught my attention:

• Almost 8 out of 10 buyers go online first when searching for a new distributor, either to search engine or an online industrial directory.
• The top two reasons that buyers contact new distribution sources were: (1) Current distributors do not offer product needed (45%), and (2) To make price comparisons and negotiate better pricing (37%).

These results point to today’s tough reality: The Internet makes comparing options very easy, so buyers may wander even if service levels are fine. Bill Gates is putting $6 billion behind this idea to catch up with Google. You must make sure that your company can be found online because search is now the #1 way for new customers to find you.