Digital Transformation: Are You Digitally Distraught Or Digitally Determined?
The drive to Digital Transformation is creating a ‘Digital Divide’. Which side are you on?
Recent research with industry leaders showed 46% were what they called ‘digitally determined’, with a clear digital transformation strategy around culture, change, financial goals and integrated technology.
The other 54% were ‘digitally distraught’. They have a standstill culture, siloed islands of innovation and they work on a disconnected project-by-project basis.
This is the ‘digital divide’: those who are digitally determined show above-average growth and profit while the digitally distraught are being left behind.
It is becoming increasingly clear that organisations that focus their efforts on delivering a modern customer experience are capturing more profitable revenue. These successful manufacturers put their sales and customer experience at the heart of their digital transformation.
Live sales conversations have become infrequent because customers have increasing amounts of data and intelligence on pricing – and on your competition – at their fingertips. Customer engagement can’t happen fast enough.
When prospects do reach out, they expect their purchase information to travel effortlessly and consistently online and off.
When focusing on digital transformation on the sales process and pricing strategy, there are four main areas that will carve a direct path to near-term revenue lift while developing a modern sales experience for customers.
1. Accelerating Sales Cycles — Uncover efficiencies within existing workflows and speed your response to customer inquiries and quote requests
Online orders are rarely a roadblock in B2B sales. The challenge of self-service lies in presenting complex product information and pricing in a system that’s fast, intuitive and capable of recommending the best solutions for a given customer.
Businesses often buy products from manufacturers with varied configurations, order sizes and contract terms. Seemingly similar deals can vary in significant ways, and market prices in B2B aren’t always visible.
Nonetheless, buyers expect to find pricing information as easily as they might look up product specs online.
The desire for immediate cost comparisons has added strain to sales organisations across the economy in the age of digital commerce.
Leaders in B2B also realise they can leverage trends in digital commerce to their advantage. When customers expect a rapid purchase, companies can find a new way to give themselves an edge over competitors with faster quotes. Improving how sales are managed is part of that.
Digital transformation of an organisation’s pricing strategy offers even more opportunities to trim sales cycles and lift revenue. Cost-plus pricing doesn’t cut it any more.
Modern B2B selling requires a strategic, centralised approach to pricing that sales reps can trust to drive the maximum revenue from every sale. Fast, data-backed bids improve responsiveness and build customer trust during negotiations. In many cases, they also uncover revenue opportunities that would be missed without insight into customers’ willingness to pay.
2. Superior Buying Experience — How to make price updates instantaneous as buyers on self-service platforms find and configure products to fit their exact needs
B2B digital commerce is about much more than websites and order processing. It lets sales professionals work alongside technology to make them faster and more effective.
B2B leaders who aren’t keenly focused on transforming their digital sales experience will lose market share to faster competitors with AI-powered systems.
The top manufacturers invest in AI because customer expectations are becoming too complex to manually manage with spreadsheets and personnel.
An online B2B purchase is likely to involve pricing algorithms, product databases, chatbots, market data, automated email and detailed customer profiles built across marketing, sales and support.
AI can help instantly identify the optimal next steps for customers by analysing thousands of data points gathered during this process. Customers already expect companies like Netflix and Amazon to anticipate what they need. The same will soon be true of product configurations, add-ons and services.
As online transactions become the majority of manufacturers sales, successful implementation of AI will become critical to success.
3. Increase Share of Wallet — Realise new opportunities from current customers with AI-powered white space analysis
B2B executives traditionally deploy two tactics to accelerate short-term growth: spend more on marketing or increase the size of their sales teams. In recent years, leading organisations are finding a third solution in technology that boosts revenue through smarter pricing.
Over-discounting or reactive pricing following moves by competitors can create price weaknesses estimated to trim profits by an average of 70bps.
Once those margins become locked into initial contracts, it becomes challenging to modify customer expectations and increase prices for future sales.
This is another case where AI can provide a unique advantage for improving business results.
Sophisticated pricing software can analyse both internal sales data and external customer information for patterns that inform price sensitivity.
AI then functions as a recommendation engine to help sales reps personalise pricing and the overall experience for every buyer. Digital transformation can result in systems that automatically identify cross-sells, up-sells and additional products of interest based on what is already known about a customer. These avenues can be particularly successful considering these facts.
4. Dynamic Pricing Science — Deliver real-time, optimised pricing that incorporates up-to-date market information and pinpoints customers’ willingness to pay
Even the most experienced reps occasionally lose deals after high bids, or leave money on the table when pricing is below expectations.
Consistently hitting that balance between company objectives and customer willingness-to-pay will grow more important as digital commerce makes B2B sales more competitive.
This rapid adoption is driven by a growing trend toward self-service and the opportunity to tailor every transaction with the optimal price for the known characteristics of the buyer.
Beyond bids, manufacturers that use modern pricing solutions have opportunities to streamline product configuration processes and reduce order processing times substantially. Effective digital transformation also meets customers’ desire for a consistent experience, where their pricing and preferences move with them consistently across channels.
Many manufacturers have layered transformative technology into their sales strategy for years, while others are just realising its potential. Regardless of the organisation’s experience, digital transformation can optimise the sales process. Empowering buyers with fast quotes and personalised, relevant information can lift revenue in the near term.
Transformative initiatives always impact performance (for better or worse) company-wide. Thankfully, effective digital transformation is about more than moonshot projects. Even incremental shifts can solve the complex sales problems driven by the shifting nature of digital commerce.
Originally posted by The Manufacturer
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