Five Focal Points For B2Bs In Digital Transformation
In my previous blog, I discussed four key steps businesses need to take in the process of digital transformation. These include winning the internal battle by addressing the inherent disruption in managing a complex distribution network; building a culture for digital natives that attracts the right talent to the organisation; getting used to the idea of failure; and testing out MVPs (minimum viable products) to identify the right areas for digital intervention.
In this blog, I will explore five key areas that must remain in sharp focus for B2B businesses on their digital transformation journey.
Improving B2B efficiencies
Digital transformation should improve any organisation’s KPIs. B2B businesses in sectors such as manufacturing, consumer packaged goods and automotive have a large supplier and distributor ecosystem. This ecosystem has historically been managed through direct, one-on-one relationships for sales, procurement or servicing. However, the cost of servicing these suppliers and distributors increases as companies scale. With digital technology, such businesses can create self-service platforms for managing the supplier/distributor ecosystem.
For example, reordering parts for a machine will not require as much manual intervention as first-time ordering and can easily be managed as self-service. According to eMarketer, B2B buyers like talking to sales representatives over self-service platform only when they have inquiries about products with complex configurations, need special pricing or terms.
While key account managers can continue to manage the 20% of businesses that contribute to 80% of the revenue, the tail-end can be moved completely to a self-service digital platform. This platform will enable B2B transactions or B2B commerce and would lead to cost savings, quicker time to market and standardised operations.
Olam is an agri-tech company that uses audience segmentation for both large customers and new SME customers to decide on the best approach to servicing. Olam has found many benefits to this approach, including reduced costs, tapping into new growth customers, establishing direct-to-consumer (D2C) opportunities and more.
Improving sales and marketing functions
Digital technology can help bridge the sales and marketing gap. For many B2B organisations, sales and marketing teams work in siloes. Although marketing may be tasked with getting a prospect interested in the products or services on offer, the sales teams don’t always have the context of what the prospect came in for. Digital technology can help stitch this journey together by combining multiple data sources such as CRM, website activity and marketing activity logs. For example, for a prospect acquired through an email campaign that highlighted customer pain points that the company’s product solves, the sales team can build on the conversation by showing examples of how their product addresses these specific pain points.
Lead scoring is another key area that can make sales teams more effective. Most businesses have lead scoring already in place in some form. However, digital technology can still add value, starting with the quality of data used in the lead scoring models. For example, using content downloaded from the website as an input offers indications on the likelihood of conversion.
Second, is the treatment of hot, warm and cold leads. Once hot leads are identified, sales teams do a great job of reaching out and closing the loop. However, when the lead is cold or warm, the handling gets fuzzy. Sometimes marketing comes into the picture and treats these leads as new prospects. Some great sales teams keep sharing relevant content to nurture these leads, but most organisations do not have an automated way to move leads from the cold to warm to hot stage. Marketing automation combined with data can support closed-loop outreach and responding directly to customer feedback – a significant benefit for B2B businesses.
Finally, the sales cycle itself can benefit from digital technology. For example, businesses can create sales-facing apps to share news on their latest products, market trends and competitors. Peer-to-peer community learning apps are another example that can be used to directly accelerate sales effectiveness and revenue for B2B companies.
Building stakeholder communities
B2B and B2B2C businesses can leverage technology to build effective engagement platforms or communities for their ecosystem. The ecosystem can be customers or suppliers and distributors, or even employees.
These communities are essentially a digital platform maintained and moderated by the businesses and they help solve some pain point within the ecosystem. For example, an agricultural equipment manufacturer could invest in building communities of farmers who can share tips about improving yield, soil condition and fertilisers, and this helps the farmers to be more productive.
The side-effect of such communities is the rich data that can be used both for product development and for tailoring sales or marketing communication for similar customer segments. Customer communities are super important for B2B2C businesses, such as fast-moving consumer goods, as they are a goldmine for behavioural data insights that are otherwise missed from being an indirect distributor.
Acquisition can happen — with the right approach
Many B2B companies miss the essence of digital marketing for their audiences. Yes, many decision-makers are present on digital channels and it makes sense to reach out to them, but the content these decision-makers need is very different to the B2C marketing content. What is needed here is a greater focus on whitepapers, product features, industry-specific content, innovation and prices as opposed to the direct call-to-action on purchase.
Content marketing needs a well-thought-out process for mapping buyer personas, needs and message across channels. The channel mix is also likely to be different to B2C channels: for example, the social media mix will be more LinkedIn and less Facebook. Tying all this back to lead generation and the sales funnel is important for ensuring closed-loop marketing.
D2C to expand distribution
Several B2B companies are expanding business models to reach customers directly instead of relying solely on distributors. Digital plays a big role here, from acquisition to engagement and retention or re-acquisition. In my previous blog, I emphasised that B2B organisations need a shift in mindset to go direct to customers.
Particular areas in which B2B organisations will need to invest include brand building, personalisation and commerce. Beyond providing an alternative revenue source, D2C (direct to consumer) provides a platform for brands to engage directly with customers and collect data about purchase and browsing behaviour.
It is important to select the right areas for digital transformation to see business benefits. Businesses should prioritise the areas for digital intervention based on the impact on key business KPIs in the mid-to-long term.
Read Kaveri’s previous blog post 4 Ways to Digitally Transform Traditional Indian Businesses.