For the past two years, we’ve been citing National Semiconductor’s Web site as an excellent example of a number of best practices. And National Semi continues to impress us with the deliberate way it continuously extends the reach of its electronic business initiatives. What are the best practices that National has pioneered to date? And what is the company doing today to extend its reach into new frontiers with its customers and distributors?

BUILDING A FOUNDATION OF BEST PRACTICES. First, National Semi targeted a very specific group of customers: design engineers, the key influencers in the buying cycle. Second, National focused on making it as easy as possible for that target audience to use its site: get on quickly, find what they need, download spec sheets or order samples, and get off—all with an average of 2.5 clicks. Third, National does a great job of parsing and routing the 1,000+ e-mails it receives each day from customers and logging these queries and responses in a centrally-managed knowledgebase. Fourth, National passes information gleaned from prospects’ and customers’ activities on the site directly to its sales opportunity management system and to its distributors. Fifth, National combines the information generated from daily activity on the site—data sheets downloaded, samples ordered, queries, and concerns—with order projections from its sales force and distributors, along with actual orders booked, into a set of easy-to-read graphs. These are distributed via Pointcast on National’s intranet, so that every employee has a clear picture of exactly how each product line is doing every day. Few companies have an equivalent “electronic dashboard” that lets everyone know exactly what’s going on.

EXTENDING THE REACH TO PROCUREMENT. Now that National Semiconductor has succeeded in building tight relationships with the people who decide whether or not to use its electronic devices, Phil Gibson, director of Interactive Marketing, and his team have turned their attention to the rest of the company’s value chain. Again, National took a very focused approach. The team targets purchasing agents, buyers, and component engineers. Each of these constituencies has different needs, but all are served by the new purpose-built “Purchasing Resources” Web site that National introduced this month. This site includes many live connections to National’s catalog suppliers and distributors for live ordering and real-time shipments.

Purchasing agents and buyers have a critical problem that this Web site is designed to address. When their companies are designing a new product, their engineers need fast access to small quantities of the parts they’ll use to build and test the product before it is approved for production. Through this purchasing resources site, purchasing agents first locate the parts in question. Then they check on availability by accessing accurate inventory information from any of 50 distributors that stock the parts. Finally, they can order the small quantities they need directly from the five or six distributors that have already linked their order entry systems into National’s Web site, or they can contact the others by phone. (Naturally, Gibson expects that many of the rest of National’s distributors will soon follow suit, integrating their back-end ordering systems into their own Web-based front ends and linking that Web front end seamlessly to the purchasing agent’s site.)

Component engineers are the people who are charged with finding new substitute or replacement parts for products that are already in production. They can use this purchasing resources site to locate alternate parts, find out who has inventory, and procure the parts they need.

LINKING DISTRIBUTORS DIRECTLY. Like many large manufacturers, National Semiconductor sells direct to a very small market segment—about 100 accounts. The rest of its business is handled through distributors that resell National Semiconductor’s chips along with those from many other companies. Typically, a customer’s purchasing department provides its distributors with a list of all the parts it needs to manufacture a given product. The distributors shop for the best prices and availability and provide quotes back to the buyers, who, in turn, negotiate with the distributors for the best final bids. National already provides an extranet connection to its distributors, giving them access to all the documentation they need to support their sales efforts. The extranet application also includes a forecasting tool that distributors use to project sales by account so they can receive extra credit and “lock in” manufacturing capacity. The new capabilities securely link National’s distributors directly to its mainframe transaction engine over the Web for queries, quotes, and orders, and they expedite the process using a tool from Enterprise Link called SmartTran.

WOOING LARGE CUSTOMERS WITH PERSONALIZED SITES. In one of the Customers.com panel presentations we held last year, Phil Gibson had the opportunity to hear a presentation by John Martin of Microsoft. John was the person responsible for designing Microsoft’s Enterprise Customer Web site capability. Phil was quite taken with Microsoft’s approach, and he has now emulated it, using a different technology infrastructure. Today, National Semi’s major account representatives are busily creating customized Web sites for each of their customers. (As you’ll recall, Dell has also pioneered in the creation of “Premier” sites for its large accounts.)

Gibson projects that National Semi will have 100 such sites up by early July. The account reps select the information they want to highlight for the account and link the personalized site to the real-time order status information for that account. This customized client Web site then becomes the place where most of the dialogue and discussion between the account reps and their key people at their customer accounts take place. The ability to dynamically tailor the content of each custom site for each key account is made possible by Vignette’s StoryServer (and a lot of in-house customization).

NEVER-ENDING CYCLE OF RELATIONSHIP-BUILDING. The evolution of National Semiconductor’s Web site(s) demonstrates clearly that, in the business-to-business market, one’s job is truly never done. Not only do you need to continuously refine your offerings, but you are also constantly looking for ways to add value for more and more of the key players in your value chain. What we can learn from National Semi’s efforts is how carefully targeted each of these initiatives really needs to be if you are to successfully forge close relationships with all of your key partners.