The consumer world has been transformed by digital sales and marketing techniques. However, B2B companies, including materials companies, have struggled to effectively utilize digital tools in their sales and marketing efforts. In fact, a 2017 Deloitte study [Digital Transformation: Are chemical enterprises ready? | Deloitte] found that despite significant investments in IT infrastructure and training, chemical firms lagged behind other industries in their implementation of digital solutions. This finding resonates with us at Growth Arc, as we are former industry operators who have seen sales organizations minimally use their CRMs and marketing departments struggle to deliver top line results via digital tactics.
When so much activity has yielded so little momentum, we look to culture as a key component of the explanation. In an HBR Analytics recent survey of business leaders, [HBR, Rethinking Digital Transformation] 63% of executives cited culture as the biggest impediment to digital transformation efforts. We have identified five cultural norms in B2B firms, and especially materials companies, that act as barriers to achieving results from digital sales and marketing techniques.
Digital technologies enable a deeper understanding of the customer and support improving the customer journey. As these technologies have become more robust and the costs of transmitting information have significantly decreased, the utilization of digital tools has become more practical, particularly in generating sales. An ample amount of relevant data can be easily gathered through digitalization thanks to the many avenues for customer dialogue it creates. Such data enables powerhouses like Google and Amazon to better understand their millions of users which, in turn, enables them to deliver relevant offerings.
Yet merely possessing more customer information is inadequate. Firms must then analyze this customer information to develop insights to improve products, service, and the customer journey. Digitalization facilitates this analysis by creating avenues for customer dialogue and opportunities for learning from customer behavior at specific touch points. This, in turn, enables businesses to revise their messaging and propositions accordingly.
Well-implemented digitalization offers tremendous promise for sales growth. This blog series will detail five cultural barriers that stand in the way of such success.
Most B2B companies consider their sales funnel too complex to be converted into digital tools. This is primarily because they believe that each customer is unique and requires individualized attention from a sales professional assigned to them. As a result, firms make the mistake of utilizing technology merely to convert existing sale tactics to digital ones. Among materials firms, common examples of this include the brochure that becomes a PDF and the “lunch and learn” that becomes a webinar. Unfortunately, this approach underutilizes the potential of the digital platform.
The blind spot here stems from the belief that the sales journey is so complex that it can’t be systematized. For as long as this belief persists, the promise of digitalization won’t be realized.
Meaningful sales growth can be achieved by breaking down the customer journey as a stepwise progression. This entails understanding conversion through each step and as well as targeting low yield steps. Citing thirty years of consulting experience with B2B companies, The Organic Growth Playbook authors Bob Lurie and Bernard Jaworski suggest that a 1.5-2x boost in B2B growth rates can be achieved by changing a firm’s mindset around the customer journey.
Many firm leaders and employees, however, lack insight into the success of different stages of the customer journey. Firms are either unable to access relevant data or lacking a mechanism for analyzing data to amend their practices and increase conversions. In this way, the sales journey remains opaque as leaders cannot access or action the information necessary to unlock growth.
While embracing digital techniques facilitates such growth for the many previously mentioned reasons, it requires a commitment from sales and marketing organizations to: 1) break down their customer selling journey into incremental steps, 2) quantify performance of customer conversion through those steps, and 3) deploy tactics for driving added conversion.
Case: A recent Growth Arc Advisors client, a non-profit providing educational content, wanted to increase sales of their educational content. After we helped them improve their segmentation, targeting, and value proposition, the company implemented a promotion plan that utilized digital channels. They closely monitored their sales funnel and as they gained traction with their audience, they discovered a decrease in conversion during the online application process. Customer interviews revealed that this was due to both a cumbersome admissions process and lingering unresolved objections to the final purchase. In response, the team streamlined the application process, deployed additional sales resources for conversations to guide the admissions process, and generated additional promotional content. As a result, the team doubled their purchase rate during their first launch.
Digital tactics can improve a company's understanding of customer buying factors if companies commit to using them to dive deeper into their customers’ buying journey.
In our next installment, we will look at organization dynamics that create barriers to digitalization.