2020 is the year of digitization. When the Digital Care Act was passed in November 2019 as part of Germany's Ministry of Health digitization campaign, no one knew yet what the world would be facing in 2020. Health Minister Jens Spahn spoke of a "world premiere" - the same was true of the Corona pandemic.
Covid-19 as a driver of digitization. Medium-sized companies in particular have made strong headway. Large companies had already demonstrated a higher level of digital maturity before the pandemic - this is also a characteristic of successful companies. These digital leaders also had done better in the pandemic as well as generating better results. "Technology leaders have up to twice the revenue growth rate" testifies Accenture in a recent study. On the one hand, this is because processes or entire business models are digitized. On the other hand, thanks to digital solutions, they can react quickly and flexibly to the crisis. Just as evolutionary adaptation is advantageous for survival and reproductive success in nature, the same is true in the business world. Those who can change and adapt are strong - something Charles Darwin already knew.
What is digital transformation?
Digital transformation, or digitization in general, means the incorporation of digital technologies into all areas of a company. The results are fundamental changes in the way of how companies work as well as in the added value they offer for their customers. So it's simply about changing the way a company interacts with its clients and how they deliver a consistent experience to them. Plus doing it at the right time, in the right place.
Digitization in sales - how does it work?
Medium-sized companies, in particular, struggle to determine exactly where digital developments on the market require action for their own sales departments. Good products and good sales arguments are no longer enough these days. So what are the measures that a company needs to take?
In what is known as "Sales 4.0," the balance has been shifting increasingly to the side of the customer, who is taking on a more and more active role. The customer examines and compares offers and information independently on the Internet, even before the first contact is made with the sales department. In other words, traditional sales channels are no longer sufficient. Social selling, social media marketing and lead management are the terms of the day, as are digital sales channels that are always available and lead to the goal in an automated manner.
Demands have also risen. Both in terms of products and services, as well as the customer's expectations - has the company intensively addressed my needs and requirements? This is about user-centricity, the customer experience, the customer journey and the evaluation of customer data through data analysis and digital data management.
Or to put it another way: how well do I know my customer?
Another major issue are the processes involved in sales and the available infrastructure. Process mining, a discipline of business data analysis, illuminates business processes, identifies bottlenecks as well as inefficiencies and helps to improve them. A modern infrastructure that is also supported by the cloud enables salespeople to easily access information virtually at any time and from any location.
And then there is the exciting topic of data as a business model (Data as a Product, Data as a Service). In the course of digitization, more and more data is being measured - processes, the customer journey, user experience, interconnected plants and machines, the Internet of Things, etc. Thanks to artificial intelligence and machine learning, new products as well as new business models can be created from the data.
The latest Ernst & Young study "SalesMaX 2020", which they conducted in collaboration with the Sales Management Department of the Ruhr University Bochum and almost 200 sales executives of German companies, also clearly demonstrates the benefits of digitization: increased efficiency, effectiveness as well as the enabling of new digital business models.
Would you also like to increase productivity in your company, intensify customer contact or expand or even renew business areas? Learn how this works in the next part.
Digitization in Sales
Data Analytics, Data Mining and Process Mining
The oil of the information age, data, is the key to digitization. Insights gained from this data optimize processes and operational procedures, satisfy customer wishes, discover trends, new market opportunities and business areas, or create targeted marketing and intensify customer relationships. The possibilities seem endless. In its Digitalization Index 2020, Deutsche Telekom found the following with regard to data analytics:
"Almost three quarters (73 percent) of the companies surveyed increased their revenues - by 13 percent on average. 74 percent reduced their costs, 70 percent improved their business processes with the help of data analytics, and 67 percent are convinced that this will improve their overall competitiveness. More than half (56 percent) are using data analytics to develop data-driven digital business models (data as a product)."
Reasons why 76% of companies conduct regular data analytics. All areas where data can be collected have seen an increase of 19-25% in the last twelve months.
There are different methods to analyze data. The most widespread are descriptive analyses, which means the evaluation of past-related data. Already 43 percent of companies use this method. But it doesn't stop there, by means of data and predictive analytics you can look into the future just as well (e.g. predicting customer behavior). And these are becoming increasingly important. In combination with artificial intelligence, one is even able to predict developments.
Gartner, for instance, takes a deep look into the future. In their study "100 Data and Analytics Predictions Through 2024", they provide comprehensive predictions on the development of, among others, Artificial Intelligence, Data Analytics Strategies, Advanced Analytics, Data Science, IT Infrastructure, Blockchain Technology, Cloud Computing, Internet of Things, Data Security and Privacy, CRMs, Customer Experience, CRM Sales, Supply Chain Planning and Operations. So it's a highly recommended study. They too are convinced of the triumph and the power of data by analyzing it:
"... data and analytics are increasingly critical elements across nearly all industries, business functions and IT disciplines in both the private and public sector. Most significantly, data and analytics are key to a successful digital business."
Gartner also identifies the leaders and key positions in the transformation of a data-driven economy. CDOs (chief data officers), CEOs and CIOs are the ones who will take data and analytics strategies to the next level and drive solutions to tomorrow's business problems. For companies that are not as advanced or are in the early stages of digitization, the following experts are in demand:
- Data Analytics, Process Mining: Data Scientist
- Digitale Transformation: Digitalisierungsexperte, IT-Leiter
- Process Management: Prozess Manager
- Infrastructure: Cloud Experte, IT-Projektleiter
Naturally, experts in artificial intelligence (AI) or machine learning (ML) are also in demand. However, high investment requirements can discourage companies from developing their own solutions or even innovations in this area. A good approach here is to use existing systems in order to benefit from the expertise of the respective provider. This is also the essence of machine learning: generating knowledge from experience. I.e., the provider's AI becomes smarter with each new customer.
Here are two examples of the digitization of sales with external AI.
Aimondo are the first to use Artificial Intelligence for so-called "(Dynamic) Repricing". Repricing means product prices are dynamically adjusted intelligently and automatically in relation to the margin and the market environment.
Specialists for the customer journey are Zoovu (Conversational Search and Commerce). Intelligent advisors answer all the customer's questions and objections online and guide them to conversion. In the process, the advisors improve with every interaction.
These solutions do not require a Data Scientist, but in combination, deeper insights can be gained and prove to be extremely beneficial.
Customer Journey, Customer Experience, CRM and CX Systems
Following the example of Zoovu, you have now learned about the use of Artificial Intelligence in the Customer Journey to successfully close a sale. Intelligent guidance increases customer satisfaction (customer experience), which increases buying intent as well as customer loyalty. Bitkom Research identifies customer satisfaction as a factor that is more important than generally reducing costs. The customer journey and path in the purchase decision process is a feast for data analytics. Every action, every interaction and every reaction can be captured and evaluated. It is easy to measure the effectiveness of individual channels, touchpoints or advertising media and optimize them accordingly. If companies know the buying process of their customers, it can be improved or shortened and opportunities for cross-selling or upselling open up.
A useful and important system in which customer data (purchase history, customer behavior, preferred channels, etc.) is collected is CRM (customer relationship management) software. Ernst & Young has found that when it comes to CRM systems, the difference in digital maturity between successful and less successful companies is a striking 13.6%. The CRM system is part of the strategic foundation, which is why it is even more important to take the time or buy in the expertise to make the right decision here. Moreover, such a system does not exist on its own, but is interlinked with sales, marketing, support as well as other areas, which again increases the weighting.
A CX (customer experience) system is again the previous example Zoovu with its intelligent advisors. Other examples are RPA solutions (Robotic Process Automation) and intelligent voice systems as well as chatbots, which solve typical customer inquiries and standard problems automatically and without human assistance. The advantages are obvious. As a customer, you get help 24/7, service employees are relieved, and service volumes can be increased.
People with the following qualifications help you implement these methods and systems:
- CRM/CX-System: Solution Architect, IT Consultant, IT Project Manager, IT Manager
- Customer Experience, Customer Journey: Data Scientist
3.6 billion. An impressive figure and the number of global social network members. And according to Statista, this number will grow to 4.4 billion users by 2025.
To serve these powerful channels, the technique of social selling has evolved. Social selling is a lead generation method in which salespeople interact directly with their potential customers on social media platforms. Salespeople can provide unique value by answering questions, solving consumer problems, and presenting well-thought-out as well as targeted content (in the wake of content marketing) to generate sales. Social selling is not a quick and one-off affair. After all, social channels are great terrain for connecting with new potential customers and laying the groundwork for new business relationships. Social media is the medium par excellence for building trust and creating valuable, lasting relationships - all without being exhausting or intrusive.
At first, this sounds like more effort than traditional sales, but trust isn't built overnight. And then there's the scalability - remember - 3,600,000,000 users. Building up thriving digital communities would be such a typical case of immense scalability. And it doesn't stop there. At its best, social selling is targeted, personal, smart, and it often meets the active consumer in a more engaged mood than in a negative one or with pure disinterest.
And since we are in the digital domain, quite a few things can be automated. Keyword social selling automation. The popular business network LinkedIn offers tools for social selling out of the box. LinkedIn Sales Navigator helps find customers in your own network and even brings its own CRM. Nimble focuses on social sellers and offers a dedicated social CRM for this group of salespeople. And then there are a whole bunch of tools that take care of content creation and social media planning, like Hootsuite, Buffer or ContentStudio, just to name a few.
But beware. These solutions, however, are only meant to be supportive. Because the essence of social media is the personal connection as well as the personal contact.
The potential as well as the flood of data in social selling are enormous. Those who are able and use many different services, create their own software (Custom Software Aggregated Services) to keep track and control. The software Zapier also addresses this issue. With the right people, you can take full advantage of these endless possibilities:
- CRM: Solution Architect, IT Consultant, IT Project Manager
- Data Analytics Social Media: Data Scientist
- Automation: IT Consultant
- Custom Software Aggregated Services: Solution Architect
The digitization of sales processes offers a wide range of benefits and also creates new opportunities as well as new fields of business.
- More sales, profit and turnover by a higher conversion rate
- Efficient and effective customer acquisition
- Better products
- Higher customer satisfaction
- 360-degree customer view and transparency in the customer journey
- Saving of resources
- Saving time by eliminating monotonous tasks
- Concentration on the essentials by eliminating annoying tasks
- New business areas (data as a service, data as a product)
Brave new world. So far, so good. However, there is one thing to consider - and many companies miss this important aspect:
Taking a holistic view, "the big picture." Just as digitization should be interlinked within the sales department, you also need a holistic view of the digital transformation of the entire company. Thinking in silos sends its regards. In the context of holistic business models, digitization does not yet play too big a role. Don't miss out on this aspect and take advantage of the extensive opportunities that digitization offers, including, for example, the development of new business areas.
We hope that the employees you need are already part of your organization, to make this shift happen. If not, get competent experts on board in an straightforward manner - so that the digital transformation can fully unfold its trailblazing impact in your company.
This is the first part of our series "Digitalization 2021". Learn more about the importance of digital transformation in the area of IT security in the next article.