Tech is reshaping B2B commercial excellence; materials executives must adopt tech-driven strategies to stay competitive in a changing landscape.
Why the Shift and a Path Forward for Materials Executives -
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On Victoria Meyer’s The Chemical Show Podcast, I recently made a provocative statement that industries with a traditional mindset, particularly industrials, have lagged in B2B Commercial Excellence. Watch a 1 min clip here. And conversely, that the leaders in this domain can now be found in the high-tech sector. This point of view might come as a surprise to many materials executives, but it is crucial to understand why this shift has occurred and what can be done to catch up.
What Makes Leveled-up Commercial Excellence?
To understand the current landscape of B2B commercial excellence, it is essential to recognize the effective use of digital tools and updated selling science. As authors and first users of most digital tools, Tech companies have mastered their utility for driving sales and engagement. While Industrial B2B sales have traditionally relied on personal relationships, the dynamics have shifted with the ubiquity of information accessible online. Customers are conducting extensive research independently, engaging sales representatives only in the later stages of the sales cycle. Consequently, the loss of personal contact in the early stages necessitates a mastery of digital tools to strategically target the front end of the sales cycle.
While industrial sectors may already be using digital tools, tech companies employ them differently, integrating sophisticated selling science into their strategies. Traditional methods like value and solution selling involve protracted discovery phases, and digital tolls are mostly used for stimulating “awareness.” But awareness is not conversion and tech firms have refined their approaches to focus on early-stage conversion tactics. These tactics are centered on understanding customer pain points, establishing a digital dialogue, and converting that dialogue into tangible inquiries or leads. Without these tactics conversion rates suffer, leading to underinvestment in digital initiatives by industrial companies. Ask any industrial rep what sort of quality leads come from website contact forms or webinars and they’ll likely say very few.
Materials executives need to recognize that their reps are engaging customers later in the sales cycle, while tech companies are fostering conversion behavior much earlier.
Why the SaaS Sale Looks Like Industrial B2B
A common objection to the notion of tech companies leading the realm of B2B commercial excellence in the common notion of a disparity between software sales and industrial products. They’re “different sell’s” we’re told. However, with the advent of the Software as a Service (SaaS) model, this distinction has blurred considerably. Fifteen years ago, the high-tech sector began embracing the SaaS paradigm—a model characterized by revenue that is proportional to usage, requires up-front piloting to secure customer commitment, and ongoing customer satisfaction to sustain and grow revenue streams.
These characteristics mirror the industrial B2B sales model closely: revenue is proportional to usage volume, extensive qualification processes lengthen the sales cycle, and nurturing customer relationships over time is critical for deepening usage and ensuring long-term engagement. Consequently, tech sales have come to resemble traditional B2B sales more than ever before, highlighting the transferable strategies that materials executives can adopt.
Actioning the Insight
For materials executives, the current state presents two significant opportunities. First, since the materials sector does not directly compete with the tech industry, there is no immediate disadvantage. Early adoption of tech-driven strategies could afford a competitive edge within the materials domain. Second, the path to improved performance is well-charted thanks to the proven success of tech strategies; the challenge lies not in blazing uncharted territory but in building new capabilities.
So, what steps must be taken? First, updating selling methods is imperative. Value and solution selling should be viewed as “table stakes;” the focus must expand to include conversion behavior, connecting with customer pain points and consultative approaches. Second, is a shift in digital investment priorities towards conversion tactics, moving away from awareness-heavy digital strategies that are not generating sufficient returns. By honing in on conversion execs can effectively use pilot programs to prove out economic benefits, which can then be used to justify further investment.
Materials executives must recognize the fundamentals of this profound shift in B2B commercial excellence. By recognizing this evolution, understanding the commonalities between SaaS and industrial B2B sales, and implementing focused changes, materials companies can drive new growth.
Until next week,
Kendall -
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