As discussed in my October 2000 column, a market ecosystem, comprised of all the companies in the value chain that facilitate customer selection, purchase, implementation and use of a product, is a key element to the success of new technology. Until the targeted user community perceives the market ecosystem and the support it provides, the new technology will struggle for adoption. Further, each user community requires its own market ecosystem that addresses its needs.
A demand side market ecosystem creates a bridge between you and your end customer a bridge that is supported by your partners with their knowledge, information and services. There is a very specific process for building a strong market ecosystem for e-business. The main phases are:
Phase 1 Develop the Program
- Identify and select possible partners.
- Qualify partners based upon very specific selection criteria.
- Build a program that serves the partners while achieving your objectives.
Phase 2 Implement the Program
- Recruit those most qualified with a win/win proposition.
- Prepare partners with training, information and meaningful programs.
Phase 3 Sustain the Program
- Motivate partners to give you more of their limited time.
- Support your partners in their efforts to roll out your program.
- Communicate with them through established means on a regular basis.
- Monitor the key actions and results.
Develop the Program
Developing the program probably gets the most attention. Yet, there are two mistakes companies most often make. They try to engage in as many partnerships as possible, and they develop a program that doesn't adequately address the business objectives of their partners.
When building a market ecosystem, less is more initially. Start with a small, manageable group and expand it over time. Fewer high- quality, well-supported relationships will produce far better results than those with many unqualified partners. A company that understands its partners' business objectives and develops a program that addresses these objectives will produce greater results.
Identify and Select Possible Partners
Define what products and services will be required in order to attain a critical mass for your product within the selected target market. Then do an audit to determine what can be done internally and what needs to be done by external ecosystem partners, such as associations, resellers, instructors, influencers, trainers and consultants.
Develop a list of the type of partners, and criteria for each type, so you can select those best suited to your needs. Criteria can include their capabilities, personality and experience or knowledge. You should seek to create relationships with those organizations and companies that:
- Share common customer targets.
- Have credibility because they are already respected and known by your target customers.
- Have complementary products and/or offer services you can't provide.
- Experience in the market.
Make a reasonable effort to identify all of the possible partners and participants in the market ecosystem. Referrals will save time and money, and will improve the quality of partners identified. An overreliance on directories and secondary sources of information invariably reduces the quality of the partners identified.
Select possible partners to recruit. This selection process is a multistep process with each choice being critical to overall success. The value of solid, meaningful and appropriate information that can be acquired through qualitative research coupled with skilled analysis is helpful. When done properly, this process will enable you to find the right people, learn their language and understand their requirements. You may use any communication method; however, we find that the telephone or in person is best because it enables an interactive dialogue. Skilled questioners can elicit information of considerable value without influencing the response through their questions.
Qualify the Partners
Qualify possible partners based upon their match with your specific selection criteria. Understand the partners. Know what their goals and objectives are and how they go about achieving them. Find out what experience they have, what they care about and how good others say they are. Seek to quantify their willingness to work with you and support your needs. Following are several techniques for doing this:
- Find out who they are and how they are measured. This will help in under-standing their goals and priorities.
- Have them fill out an application that will determine how close the match is. (You can do it for them if the applicant is too senior.)
- Check at least three references.
In the application, include questions about the type of technology they use and how frequently they use it. These questions help identify people who rely heavily on competitors' products and, therefore, may not be readily converted to a new product.
Ingredients of a successful program include the product, the program content, the training and the tools. The program can include certification or a special designation. Tools can include online demos, comparisons, a seminar, newsletters and promotional material.
During the creation phase, you should develop programs for, with and through your selected partners. Their participation will help you create a better program while strengthening the bond between you. This will also make for a smoother, faster roll out because your partners will have ownership in the program. For example, your partners will tell you what type of tools they need to get e-business accepted and used by your customers.
Following is an example of why it is important to develop a program that supports your partners. One e-business vendor has been working with the partners that have approached them. The partners fit all of the criteria for a successful partnership. However, the partners are not getting the resources they need. The result is that the partners are getting frustrated and demotivated and aren't representing the vendor accurately.
Establishing a market ecosystem for an e-business technology involves creating successful working partnerships with other entities. Successful long-term partnerships require the right resources, commitment and time. The rewards of a fully functioning market ecosystem can be widespread market acceptance of your new technology.
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