[Article review]: The digital future of B2B sales

[Article review]: The digital future of B2B sales

In order to investigate how much progress digitisation initiatives have made in sales Roland Berger and Google Deutschland conducted a survey of 2,745 sales managers at B2B companies in many industries such as electrical engineering, automotive, and metalworking. The survey:  ‘The Digital Future of B2B Sales was conducted in 2015, but the responses gathered are still quite relevant today: suggesting that some B2B providers underestimate the strategic importance of sales – or are unable to effectively implement the transformation process in their companies.

The overarching message from the survey is: digital visibility is the key to success. As the majority of the respondent managers confirmed: ‘strategically, there is no alternative: Sales processes must go digital.’ Some of the key findings reinforce this:

  • 60% of respondents believe that digitising the sales organisation will be critical to the success of their business.
  • 57% of the B2B purchase process has already been completed before the decision-maker contacts a sales rep for the first time.
  • 33% of the B2B providers examined in the study don’t give their customers the option of placing orders online.

In spite of the obvious implications of the benefits in sales activities that could be yielded from going digital, many respondents see digitisation as a decisive factor for sales in the long term – mainly because product and system specialists still see things much more from the technological and product side than from a sales perspective.

Failure to change can do lasting damage to a firm’s competitive position, because the market environment, customers’ requirements and products themselves are continuing to evolve at a dizzying pace.

The article then goes on to discuss some compelling reasons why digitising the sales process should be considered in the short-term (note, these are all verbatim from the article but in some instances have been edited for length).

MARKETS: NEW PLAYERS PUTTING TRADITIONAL COMPANIES UNDER PRESSURE

New digital players – mostly from a B2C background are keen to grab a slice of the B2B sales cake for themselves. Drawing on their customer handling experience, they operate with distinctive business models: as online-only distributors (such as Alibaba).

CUSTOMERS: DECISION-MAKERS PLACING MORE EXACTING DEMANDS

“Millennials” are the new decision-makers at customer companies. In the USA, fully 46% of those individuals who influence B2B purchasing are under the age of 35. The figure in Germany is slightly lower. Their information, communication and relational behaviour differs significantly to that of the previous generation. They would rather gather information by “googling” than personally contacting a sales team or leafing through catalogues. Their experience of shopping for consumer goods (via the likes of Amazon) means that they already expect purchasing to be very convenient.

PRODUCTS: THE SHIFT TOWARD DIGITAL TECHNOLOGIES WAITS FOR NO ONE

In the digital universe, it is no longer enough just to develop good products. More and more product functions are now realized not by hardware itself, but by the software inside it. And although this software is “embedded”, it is increasingly platform-independent. To a certain extent, the specific requirements that apply to software sales are thus now being added to those placed on B2B sales of physical products. What is more, disruptive and/or improved technologies are penetrating the market ever faster and sales organizations therefore have to be able to respond very flexibly.

Key areas to address in a connected digital sales system

When accompanying digitisation projects at B2B companies, time and time again the survey authors encountered three critical areas that need to be addressed in a connected B2B digital sales system:

  1. Let customer’s show the way – most companies fail to effectively use their website to help customers configure their own products. More attention needs to be paid to the ‘customer journey’ – which is effectively a structure that provides the information needed at different stages in the selling process (information gathering, new customer, service requirements, etc.) and businesses need to carefully think through every possible customer touchpoint. Content must also be accessible from any medium, whether it be a PC, tablet or smartphone. Additionally, companies should seek out the help of a search engine optimization expert to intelligently use keywords and tags.
  2. Make channels permeable – sales channels are typically organized separately from the broader organization. In many cases, they are using a separate CRM that means customer data is often not updated and shared with other systems. Using a host of different systems hinders the ability for a smooth transition from one channel to another – as each one has its own IT infrastructure that may not be compatible with the structures of the other channels. On the other hand, redundancy also hinders inter channel permeability as sales staff may, for example, refer to different price lists from the ones shown to customers on the company’s website.
  3. Reduce complexity – the core problem is managing the various channels in such a way that the customer’s transition from one to another works seamlessly, giving them the feeling of receiving optimal service from a single source even across multiple channels. Similarly, serving domestic and international customers can be challenging, and to fill the gap the B2B enterprise may work with local sales companies outside its domestic market. Only to find that these partners’ businesses are cannibalised by digital channels. For example, a central online shop operated by the parent company, will effectively compete with the activities of local sales teams that work for their own account.

In spite of the clear signs for B2B firms that they should go ‘digital or be left behind’, many product and system providers have so far only devoted a fraction of their marketing and sales budgets to digital channels. There is hope though as the respondents confirmed that digitising the sales process has viable benefits – including the fact that it lays the foundation for future competitive advantages in the B2B world. Another obvious benefit is the untapped revenue which can be realised from making some small changes such as using Google Adwords, which the authors estimate can potentially deliver a high return on investment of 300% – rising to as much as 1,000% depending on the industry. Other investments in digitisation likewise very quickly yield significant benefits. For instance, arming the sales force with tablets that access both the product portfolio and customer data can increase the total value of a firm’s sales by 69% in just six months.

There are many great articles on this topic. In the coming weeks we will share some of the key findings.

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