A new era of Value Selling. Thomas Menthe
ever to hire inspired, motivated and engaged sales staff into B2B sales organizations to drive the change.
Companies say they are already struggling to deal with challenges such as:
More complex products and services to meet clients’ demands
New entrants with alternative offerings, unconventional business models, and lower prices
Accelerated commoditization and substitution
Greater market transparency and growing customer procurement capabilities
Shifting control of the buying process toward customers
Cloud providers such as Amazon Web Services, Google or Microsoft Azure are taking the market share in pay-as-you-go infrastructure (IaaS) and disrupt the model of buying infrastructure from hardware vendors such as IBM, HP or Dell. With Software as a Service (SaaS), companies do not even need to buy large license-agreements but just select the Oracle or SAP Solution and the Anti-Virus protection from the Amazon marketplace and pay on an hourly, monthly or yearly base to streamline costs, use the scalability and avoid expensive hardware or software upgrades of the IT landscape. On top of this, offers provide up to 60% lower prices to their customers, which is a thread to existing compute and storage suppliers.
The innovation has begun and technology-fueled sales practices with advanced analytics in real-time involve replacing salespeople with technology solutions. More importantly, productivity and revenue are higher than average and customers receive information much faster compared to calling their account manager and waiting hours for a reply.
The following emerging practices are being implemented and a fast growing number of tools and technologies like tech-enabled consultative selling improve the selection and use of products and services in client organizations:
- Bundles, pricing and value capture are combined in a new way with self-parametrization offers
- Co-creation with customers meets collaborative selling with other business units or ecosystem partners to maximize the value for the customer
- Education of customers about value-creation opportunities
- Orchestrating partners and internal functions to raise efficiencies and reduce the amount of customer touch points
- Scientific models like big data-enabled customer analytics redefine customer value as sales management is using predictive models or experiments to understand the true potential
- Virtual experience like augmented or virtual reality in a gamified, multimedia and multisensory environment triggers the human need for experiential adventures during the buying process
- Marketing generates must-have situations and influences the buyer to create customer pull rather than pushing products through sales
- B2B offerings and services concepts are providing 24/7 accessibility through all channels- primarily the digital ones
- Sales reps use tablets with an online store app and guide the buyer through the online purchasing process to educate them about future purchasing options
- Personal B2B buying portals allow seller companies to analyze data from customers using the digital connected experience and have the ability to anticipate and adapt customer needs with data-driven activities
For example, Amazon has introduced customer interactions where they are presented with preconfigured value propositions geared toward their specific needs based on their historic search behavior. MyIBM provides personalized support and services to B2B customers based on interest and purchase history. Other suppliers increased their sales efficiency substantially by implementing a configurator that lets customers quickly put together a customized product solution and quote.
Thus, B2B sales organizations are learning to point out desires of their clients they did not even know they had. Oftentimes that means not just educating the customer, but also orchestrating the different parties and functions within the customer organization to discover and recognize the need. New players in the all-different sectors from banking to logistics use algorithms (machine learning) to intelligently track the data points their clients leave in various digital platforms such as Amazon, eBay, or Facebook.
Another example for how B2B sales can add value to companies is, once more, online retailer Amazon, who provides a mindset of “selling everything inside the company.” Amazon has taken an almost religious 360-degree B2B sales perspective on its operations, looking at every part of the company as potentially salable products and services. No matter if B2B or B2C, Amazon examines its entire value chain with a B2B sales eye. With these new large revenue and profit streams, Amazon’s B2B sales force is a powerful contributor to the bottom line and as a B2B-centered customer-focused company the B2B sales force can become the “superwomen and supermen of the future”.
Machine-learning enables recommendation engines to boost cross-selling revenues and generate new sales based on the user’s buying and search patterns. Churn prediction is another concept used to predict the risk of customers moving away and help maintain them before they switch providers, e.g. to avoid the unnoticed switch of electricity providers after a move.
1.1.5 Value through Digitization
New chances emerge in digitization for companies in the B2B and B2C areas in order to approach customers and decision-makers and present them with new offers. Nowadays, customers use apps on their mobile phones to read the news, make purchases, monitor their fitness activities or control their homes. In the business area, apps are being used to grant access to information anywhere, edit approval processes from anywhere and at any time, as well as observe the business development in real-time, to be able to react to altering trends.
Many services of companies do not offer a sufficient way of distinguishing between competitors in the area of 'low involvement' products and are thus being categorized by price. Digitization provides opportunities through new technology that improves the customer's experience, makes the offer come alive (e.g. through virtual reality) and presents need-based solutions (e.g. individual online consulting). Modern cloud-services - the online provision of IT-resources and applications on-demand for usage-based prices - allow for the acceleration of the time-to-market and the development of new applications and thus enroll new digital offers worldwide within minutes. Due to the usage-based availability of IT-resources such as the infrastructure (server, memory), as well as platform offers, services can be developed and innovations advanced in cost-efficient ways. Usually these are the strengths of start-ups that are available to large companies via cloud-services. This agility, which is typically known from software development, is not only a method, but also a disposition and a culture in which adjustable, interdisciplinary teams complement the hierarchically coined structures and focus their development on the customer (see also: customer-centered focus of a company). Real-time processes and agility are crucial when it comes to modern supply chains that are influenced by the paradigm shift in the trade between companies (B2B).
The commercial success of businesses is going to depend on their ability to know and understand the individual needs of customers and decision-makers in order to be able to develop and sell recoverable services for them. Agile product development focuses on the customer benefit and sets manageable goals. Development teams concentrate on products and solutions that create a surplus value for the customer. To achieve this, the customers are incorporated into the development as early as possible, so that their feedback can be considered in the next steps.
Product functionalities that the customer is not interested in will then be modified or left out accordingly. At the same time, through big data analytics, the customer journey will be analyzed along touchpoints with a product, brand or company all the way to the desired target action. Common target actions are purchases, orders, interactions with the company and product, as well as requests. Despite 'big data', the success rate of innovation has been shockingly low for decades because marketing managers and product developers focus too much on customer profiles