How Dave And Caitlin Are Disrupting The Building Products Industry

Jennifer Scholze

Dave and Caitlin just bought their first home, a fixer upper. They’re planning a major remodel and will tackle many of the projects themselves, despite never having been involved in home construction or repair before. Where do they turn for inspiration and the confidence to execute their projects? They, like 100 million other DIYers, head straight to Pinterest to gather design and decor inspiration.

From Pinterest boards to DIY blogs to HGTV renovation shows, consumers have never before been so intimately involved in every stage of home construction and renovation. Customers expect a seamless experience that takes them from their favorite DIY blog to their Pinterest board and ultimately to an online retailer or bricks-and-mortar store for a purchase. They demand a simple, personalized experience across any channel, anytime, anywhere, and on any device.

As new modes of sales and distribution continue to transform the traditional building products value chain, the building products industry must be prepared to interface directly with the end consumer. This includes responding to end consumers who are willing to purchase building materials through the Internet and mobile apps, just as they do for any other household product, reports The Boston Consulting Group. But it’s not enough to just offer mobile purchasing options. The building products industry needs to be building relationships with consumers as early in the purchasing cycle as possible. This starts with a robust understanding of how the outcome economy, customer expectations, and Big Data are reshaping the customer journey.

3 trends reshaping the customer experience

  1. Outcome economy: The outcome economy requires a deep change in the business model and new organizational and business process capabilities. It also requires a much different approach to product design and TCO across the lifecycle. Customers want products that enable them to achieve some perceived value. Managing a holistic offering around this outcome will open new revenue sources.
  1. Big Data powers real-time marketing: Big Data allows companies to sense and respond to customers’ needs in real time to set the next engagement points. With the integration of point-of-sale and connected sensors in the logistics network, the data volume is expanding by orders of magnitude, giving rise to new business opportunities.
  1. Customer expectations: from e-commerce to bricks-and-mortar: Customers choose their own journey in multiple channels at their convenience – the pattern that emerges is not linear, as in the past. Only 12% of companies surveyed can provide a seamless hand-off between channels. The increasing variety of players in the building products market makes shaping the customer journey the top priority for building products sales.

Case study: Lowe’s & Pinterest

At 100 million strong, Pinterest’s monthly engaged user base is certainly less than Facebook’s (1.5 billion) and Twitter’s (300 million), but the social network argues that its value to companies, like those in the construction industry, is much greater. Pinterest bills itself as “the world’s catalog of ideas,” a place where more than 70% of users actively pin and purchase.

“Pinterest is a really great tool for us to get great insight and some affirmation around the content we’re putting out,” says Brad Walters, director of Social Media and Emerging Platforms at Lowe’s. “It also helps validate some things for us, too, like a particular color or decor style that might be trending.”

With more consumers willing to purchase directly from suppliers, Lowe’s is working to secure its position as the go-to middleman by becoming a DIY headquarters. For example, Lowe’s added a “creative ideas” section to its website and a “Build It!” board on Pinterest, where users can browse ideas and pin projects for later. At 200,000 re-pins, its most saved pin is a colorful doormat project. The “Build It!” board has an impressive 3.3 million followers.

“The doormat project might’ve cost $35, but the emotional investment to the customer exceeded that,” says Walters. “You’re empowering yourself because you accomplished that project.”

That’s smart marketing: Lowe’s is securing its position as the go-to destination for DIYers, not just to purchase building materials, but to draw inspiration, too.

Companies in the building products industry can do the same. Think of Pinterest as a giant whiteboard to showcase your expertise and highlight those “WOW” projects that consumers will pin and re-pin for inspiration. Capturing consumer interest early in the sales cycle helps frame the buying process in your favor and establish your business as a go-to for inspiration, knowledge, supplies, and – should a project end up being way more than the consumer bargained for – contractor assistance.

Next steps: How to digitize end-to-end customer experience

Orchestrating business processes across marketing, commerce, sales, and service requires a platform that simplifies transaction processing, supports innovation and collaboration, and accelerates business response to opportunities and risks.

Changing customer demands and expectations are disrupting the building products industry. Businesses must actively respond and adapt to digital customer engagement demands in order to maintain a competitive edge.

Learn more about Digital Transformation in Building Products and download the white paper Digital Transformation in Building Products

Comments

About Jennifer Scholze

Jennifer Scholze is the Global Lead for Industry Marketing for the Mill Products and Mining Industries at SAP. She has over 20 years of technology marketing, communications and venture capital experience and lives in the Boston area with her husband and two children.

Adapting To The Digital Sales Revolution

Arif Johari

Is social selling at a tipping point?

“That magic moment when an idea, trend, or social behaviour crosses a threshold, tips, spreads like wildfire.” – Malcolm Gladwell

Social selling is impacting how sales and marketing teams collaborate, accelerate business, and engage customers. With the technology that supports social selling constantly changing, do the behaviours that make a great social seller need to change too?

The modern buyer requires a modern seller

Charlene Li, principal analyst at Altimeter, wrote in the report, The Transformation of Selling: How Digital Enables Seamless Selling: “Selling must transform because the ways customers buy have changed.”

Forrester’s Mary Shea put it this way in B2B Buyers Make The Case For Better Marketing And Sales Alignment: “Your buyers want contextual interactions with both human and digital assets across a holistic but non-linear journey. They want their experiences with salespeople to be high value or frictionless.”

Sales and marketing reps will be obsolete in two years if they do not adapt

Changing times begets a need for a change in behavior. Look at what email did for communications, the computer took away from the typewriter, CRM did for the world of customer service and sales force automation (SFA) for sales.

Sales and marketing professionals must be aligned with a common understanding of the current buyer’s needs. We must meet the buyer in their digitally connected, socially engaged, mobile-attached, and video-hungry preferences. Today’s buyer wants to talk only with professionals who can add demonstrable value.

Myth: Digital selling is the same as social selling

Incorrect. Social is a component of digital.

Digital selling is understanding how to align the mindset, skillset, and toolset to engage, connect, and grow a relationship through any digital platform—social, video, email, messaging, etc.

“Social does not take the place of a handshake, but it turns a handshake into a hug.” – Brian Fanzo

How to adapt to the digital sales revolution through a social approach

1. Update your LinkedIn profile from a resume to a resource

The more value you can bring to your audience, the more likely that they will become fans, referral partners, and clients.

The litmus test: Does your profile get your buyers excited to take your call? If the answer is yes, then your profile is working for you and your customers!

2. Recognize that Twitter and LinkedIn are like peanut butter and jelly: perfect together

If LinkedIn is your primary social media platform, don’t ignore the power of Twitter.

Add your LinkedIn URL to your Twitter profile. When you have a new targeted follower, start a conversation and invite them to connect with you on LinkedIn.

If your profile is positioned correctly, they will learn much more about you as a thought leader and you can begin to move them forward in the buyer’s journey.

3. Schedule time every single day to work on LinkedIn prospecting.

Treat that time as if you were with a client.

Don’t let your prospecting time get interrupted – it’s the number-one thing you can do to get in front of new clients.

Social selling has become such a hot topic that Coffee-Break with Game Changers is dedicating an entire series to exploring its various facets and promoting best practices for salespeople. To listen to other shows in this series, visit the SAP Radio area of the SAP News Center.

Comments

Arif Johari

About Arif Johari

He is a Communications lead, Digital Marketing generalist, and Social Selling advocate. He trains marketing and sales employees to become experts in Social Selling so that they’d leverage social media as a leads-generation tool. He is responsible for executing innovative marketing strategies to increase engagement in social media, customer community, and landing pages through content, events, and A/B testing. He is passionate in making the work processes of the marketing and sales team more efficient, so that they can generate more revenue in a shorter time.

Love In the Digital Age: 20,000 Consumers Dish On The Modern Business-Customer Relationship

Rich Thomaselli

“Love is friendship caught fire; it is quiet, mutual confidence, sharing, and forgiving. It is loyalty through good and bad times. It settles for less than perfection, and makes allowances for human weaknesses.” – Laura Hendrickson

We’re talking relationships.

Business-customer relationships, that is.

The digital age has hastened, heightened, and transformed the bonds between consumer and brand, which is a complicated, yet fiercely loyal, relationship if all goes well: Think Apple and its legion of diehard fans.

It’s often noted that you need to work to keep the flame alive in personal relationships, and customer relationships are no different. The tools for connecting brand and consumer are more prevalent these days thanks to social media, apps, online forums, and review sites, but often, more effort needs to go into fostering the customer relationship.

Text me maybe?

Half the world’s population is online, half of the global population owns a smartphone, and half the world’s web traffic comes from those phones.

Conversational commerce evolved from our fairly new reliance on mobile devices to communicate. As friends, family, and co-workers began to connect via mobile, they expected to be able to take that simple form of conversing into their professional lives.

Global Insights Info Graphic.jpeg

Familiarity builds trust for consumers, starting with the aforementioned social media, apps, and online forums. As texting, social media, and email have grown to overtake traditional forms of communication, brands have been gifted with enormous insight into their customers: A whopping 80% of respondents in a 2017 Global Consumer Insights Report said they were willing to share information and data with businesses.

Businesses can’t afford to leave their customers, or potential customers hanging. Follow-up needs to be immediate, consistent, and relevant. If a brand doesn’t respond within 24 hours, they can expect that their competitor will. In general, consumers expect a response within three hours, noted Nicholas Kontopoulos, global vice president of Fast Growth Markets Marketing at SAP Hybris.

Modern courtship, same principles

While the tools of dating might be more advanced in the digital era, the old-fashioned values of courtship still hold true. Consumers want to be nurtured and emotionally incentivized, if not financially. They want surprises. They want perks and discounts. They want recommendations based on the information they shared when they began to develop trust with a brand, so that business would understand their likes and preferences. In other words, don’t bring home a dozen roses if tiger lilies are preferred.

Personalized service needs to happen across all touchpoints, from first engagement through the point of sale, and after.

Customers will allow brands to have their data to form a closer, one-on-one experience – but they demand transparency in how that data is shared and protected. In other words, don’t kiss and tell. 80% of consumers said that using their data without their knowledge is the number one turn-off.

After all, falling in love is easy. Staying in love is the challenge.

Keep the flame alive with your customers. Download the 2017 SAP Hybris Global Consumer Insights Report for free here.

This article originally appeared on the Future of Customer Engagement and Commerce.

Comments

More Than Noise: Digital Trends That Are Bigger Than You Think

By Maurizio Cattaneo, David Delaney, Volker Hildebrand, and Neal Ungerleider

In the tech world in 2017, several trends emerged as signals amid the noise, signifying much larger changes to come.

As we noted in last year’s More Than Noise list, things are changing—and the changes are occurring in ways that don’t necessarily fit into the prevailing narrative.

While many of 2017’s signals have a dark tint to them, perhaps reflecting the times we live in, we have sought out some rays of light to illuminate the way forward. The following signals differ considerably, but understanding them can help guide businesses in the right direction for 2018 and beyond.

When a team of psychologists, linguists, and software engineers created Woebot, an AI chatbot that helps people learn cognitive behavioral therapy techniques for managing mental health issues like anxiety and depression, they did something unusual, at least when it comes to chatbots: they submitted it for peer review.

Stanford University researchers recruited a sample group of 70 college-age participants on social media to take part in a randomized control study of Woebot. The researchers found that their creation was useful for improving anxiety and depression symptoms. A study of the user interaction with the bot was submitted for peer review and published in the Journal of Medical Internet Research Mental Health in June 2017.

While Woebot may not revolutionize the field of psychology, it could change the way we view AI development. Well-known figures such as Elon Musk and Bill Gates have expressed concerns that artificial intelligence is essentially ungovernable. Peer review, such as with the Stanford study, is one way to approach this challenge and figure out how to properly evaluate and find a place for these software programs.

The healthcare community could be onto something. We’ve already seen instances where AI chatbots have spun out of control, such as when internet trolls trained Microsoft’s Tay to become a hate-spewing misanthrope. Bots are only as good as their design; making sure they stay on message and don’t act in unexpected ways is crucial.

This is especially true in healthcare. When chatbots are offering therapeutic services, they must be properly designed, vetted, and tested to maintain patient safety.

It may be prudent to apply the same level of caution to a business setting. By treating chatbots as if they’re akin to medicine or drugs, we have a model for thorough vetting that, while not perfect, is generally effective and time tested.

It may seem like overkill to think of chatbots that manage pizza orders or help resolve parking tickets as potential health threats. But it’s already clear that AI can have unintended side effects that could extend far beyond Tay’s loathsome behavior.

For example, in July, Facebook shut down an experiment where it challenged two AIs to negotiate with each other over a trade. When the experiment began, the two chatbots quickly went rogue, developing linguistic shortcuts to reduce negotiating time and leaving their creators unable to understand what they were saying.

Do we want AIs interacting in a secret language because designers didn’t fully understand what they were designing?

The implications are chilling. Do we want AIs interacting in a secret language because designers didn’t fully understand what they were designing?

In this context, the healthcare community’s conservative approach doesn’t seem so farfetched. Woebot could ultimately become an example of the kind of oversight that’s needed for all AIs.

Meanwhile, it’s clear that chatbots have great potential in healthcare—not just for treating mental health issues but for helping patients understand symptoms, build treatment regimens, and more. They could also help unclog barriers to healthcare, which is plagued worldwide by high prices, long wait times, and other challenges. While they are not a substitute for actual humans, chatbots can be used by anyone with a computer or smartphone, 24 hours a day, seven days a week, regardless of financial status.

Finding the right governance for AI development won’t happen overnight. But peer review, extensive internal quality analysis, and other processes will go a long way to ensuring bots function as expected. Otherwise, companies and their customers could pay a big price.

Elon Musk is an expert at dominating the news cycle with his sci-fi premonitions about space travel and high-speed hyperloops. However, he captured media attention in Australia in April 2017 for something much more down to earth: how to deal with blackouts and power outages.

In 2016, a massive blackout hit the state of South Australia following a storm. Although power was restored quickly in Adelaide, the capital, people in the wide stretches of arid desert that surround it spent days waiting for the power to return. That hit South Australia’s wine and livestock industries especially hard.

South Australia’s electrical grid currently gets more than half of its energy from wind and solar, with coal and gas plants acting as backups for when the sun hides or the wind doesn’t blow, according to ABC News Australia. But this network is vulnerable to sudden loss of generation—which is exactly what happened in the storm that caused the 2016 blackout, when tornadoes ripped through some key transmission lines. Getting the system back on stable footing has been an issue ever since.

Displaying his usual talent for showmanship, Musk stepped in and promised to build the world’s largest battery to store backup energy for the network—and he pledged to complete it within 100 days of signing the contract or the battery would be free. Pen met paper with South Australia and French utility Neoen in September. As of press time in November, construction was underway.

For South Australia, the Tesla deal offers an easy and secure way to store renewable energy. Tesla’s 129 MWh battery will be the most powerful battery system in the world by 60% once completed, according to Gizmodo. The battery, which is stationed at a wind farm, will cover temporary drops in wind power and kick in to help conventional gas and coal plants balance generation with demand across the network. South Australian citizens and politicians largely support the project, which Tesla claims will be able to power 30,000 homes.

Until Musk made his bold promise, batteries did not figure much in renewable energy networks, mostly because they just aren’t that good. They have limited charges, are difficult to build, and are difficult to manage. Utilities also worry about relying on the same lithium-ion battery technology as cellphone makers like Samsung, whose Galaxy Note 7 had to be recalled in 2016 after some defective batteries burst into flames, according to CNET.

However, when made right, the batteries are safe. It’s just that they’ve traditionally been too expensive for large-scale uses such as renewable power storage. But battery innovations such as Tesla’s could radically change how we power the economy. According to a study that appeared this year in Nature, the continued drop in the cost of battery storage has made renewable energy price-competitive with traditional fossil fuels.

This is a massive shift. Or, as David Roberts of news site Vox puts it, “Batteries are soon going to disrupt power markets at all scales.” Furthermore, if the cost of batteries continues to drop, supply chains could experience radical energy cost savings. This could disrupt energy utilities, manufacturing, transportation, and construction, to name just a few, and create many opportunities while changing established business models. (For more on how renewable energy will affect business, read the feature “Tick Tock” in this issue.)

Battery research and development has become big business. Thanks to electric cars and powerful smartphones, there has been incredible pressure to make more powerful batteries that last longer between charges.

The proof of this is in the R&D funding pudding. A Brookings Institution report notes that both the Chinese and U.S. governments offer generous subsidies for lithium-ion battery advancement. Automakers such as Daimler and BMW have established divisions marketing residential and commercial energy storage products. Boeing, Airbus, Rolls-Royce, and General Electric are all experimenting with various electric propulsion systems for aircraft—which means that hybrid airplanes are also a possibility.

Meanwhile, governments around the world are accelerating battery research investment by banning internal combustion vehicles. Britain, France, India, and Norway are seeking to go all electric as early as 2025 and by 2040 at the latest.

In the meantime, expect huge investment and new battery innovation from interested parties across industries that all share a stake in the outcome. This past September, for example, Volkswagen announced a €50 billion research investment in batteries to help bring 300 electric vehicle models to market by 2030.

At first, it sounds like a narrative device from a science fiction novel or a particularly bad urban legend.

Powerful cameras in several Chinese cities capture photographs of jaywalkers as they cross the street and, several minutes later, display their photograph, name, and home address on a large screen posted at the intersection. Several days later, a summons appears in the offender’s mailbox demanding payment of a fine or fulfillment of community service.

As Orwellian as it seems, this technology is very real for residents of Jinan and several other Chinese cities. According to a Xinhua interview with Li Yong of the Jinan traffic police, “Since the new technology has been adopted, the cases of jaywalking have been reduced from 200 to 20 each day at the major intersection of Jingshi and Shungeng roads.”

The sophisticated cameras and facial recognition systems already used in China—and their near–real-time public shaming—are an example of how machine learning, mobile phone surveillance, and internet activity tracking are being used to censor and control populations. Most worryingly, the prospect of real-time surveillance makes running surveillance states such as the former East Germany and current North Korea much more financially efficient.

According to a 2015 discussion paper by the Institute for the Study of Labor, a German research center, by the 1980s almost 0.5% of the East German population was directly employed by the Stasi, the country’s state security service and secret police—1 for every 166 citizens. An additional 1.1% of the population (1 for every 66 citizens) were working as unofficial informers, which represented a massive economic drain. Automated, real-time, algorithm-driven monitoring could potentially drive the cost of controlling the population down substantially in police states—and elsewhere.

We could see a radical new era of censorship that is much more manipulative than anything that has come before. Previously, dissidents were identified when investigators manually combed through photos, read writings, or listened in on phone calls. Real-time algorithmic monitoring means that acts of perceived defiance can be identified and deleted in the moment and their perpetrators marked for swift judgment before they can make an impression on others.

Businesses need to be aware of the wider trend toward real-time, automated censorship and how it might be used in both commercial and governmental settings. These tools can easily be used in countries with unstable political dynamics and could become a real concern for businesses that operate across borders. Businesses must learn to educate and protect employees when technology can censor and punish in real time.

Indeed, the technologies used for this kind of repression could be easily adapted from those that have already been developed for businesses. For instance, both Facebook and Google use near–real-time facial identification algorithms that automatically identify people in images uploaded by users—which helps the companies build out their social graphs and target users with profitable advertisements. Automated algorithms also flag Facebook posts that potentially violate the company’s terms of service.

China is already using these technologies to control its own people in ways that are largely hidden to outsiders.

According to a report by the University of Toronto’s Citizen Lab, the popular Chinese social network WeChat operates under a policy its authors call “One App, Two Systems.” Users with Chinese phone numbers are subjected to dynamic keyword censorship that changes depending on current events and whether a user is in a private chat or in a group. Depending on the political winds, users are blocked from accessing a range of websites that report critically on China through WeChat’s internal browser. Non-Chinese users, however, are not subject to any of these restrictions.

The censorship is also designed to be invisible. Messages are blocked without any user notification, and China has intermittently blocked WhatsApp and other foreign social networks. As a result, Chinese users are steered toward national social networks, which are more compliant with government pressure.

China’s policies play into a larger global trend: the nationalization of the internet. China, Russia, the European Union, and the United States have all adopted different approaches to censorship, user privacy, and surveillance. Although there are social networks such as WeChat or Russia’s VKontakte that are popular in primarily one country, nationalizing the internet challenges users of multinational services such as Facebook and YouTube. These different approaches, which impact everything from data safe harbor laws to legal consequences for posting inflammatory material, have implications for businesses working in multiple countries, as well.

For instance, Twitter is legally obligated to hide Nazi and neo-fascist imagery and some tweets in Germany and France—but not elsewhere. YouTube was officially banned in Turkey for two years because of videos a Turkish court deemed “insulting to the memory of Mustafa Kemal Atatürk,” father of modern Turkey. In Russia, Google must keep Russian users’ personal data on servers located inside Russia to comply with government policy.

While China is a pioneer in the field of instant censorship, tech companies in the United States are matching China’s progress, which could potentially have a chilling effect on democracy. In 2016, Apple applied for a patent on technology that censors audio streams in real time—automating the previously manual process of censoring curse words in streaming audio.

In March, after U.S. President Donald Trump told Fox News, “I think maybe I wouldn’t be [president] if it wasn’t for Twitter,” Twitter founder Evan “Ev” Williams did something highly unusual for the creator of a massive social network.

He apologized.

Speaking with David Streitfeld of The New York Times, Williams said, “It’s a very bad thing, Twitter’s role in that. If it’s true that he wouldn’t be president if it weren’t for Twitter, then yeah, I’m sorry.”

Entrepreneurs tend to be very proud of their innovations. Williams, however, offers a far more ambivalent response to his creation’s success. Much of the 2016 presidential election’s rancor was fueled by Twitter, and the instant gratification of Twitter attracts trolls, bullies, and bigots just as easily as it attracts politicians, celebrities, comedians, and sports fans.

Services such as Twitter, Facebook, YouTube, and Instagram are designed through a mix of look and feel, algorithmic wizardry, and psychological techniques to hang on to users for as long as possible—which helps the services sell more advertisements and make more money. Toxic political discourse and online harassment are unintended side effects of the economic-driven urge to keep users engaged no matter what.

Keeping users’ eyeballs on their screens requires endless hours of multivariate testing, user research, and algorithm refinement. For instance, Casey Newton of tech publication The Verge notes that Google Brain, Google’s AI division, plays a key part in generating YouTube’s video recommendations.

According to Jim McFadden, the technical lead for YouTube recommendations, “Before, if I watch this video from a comedian, our recommendations were pretty good at saying, here’s another one just like it,” he told Newton. “But the Google Brain model figures out other comedians who are similar but not exactly the same—even more adjacent relationships. It’s able to see patterns that are less obvious.”

A never-ending flow of content that is interesting without being repetitive is harder to resist. With users glued to online services, addiction and other behavioral problems occur to an unhealthy degree. According to a 2016 poll by nonprofit research company Common Sense Media, 50% of American teenagers believe they are addicted to their smartphones.

This pattern is extending into the workplace. Seventy-five percent of companies told research company Harris Poll in 2016 that two or more hours a day are lost in productivity because employees are distracted. The number one reason? Cellphones and texting, according to 55% of those companies surveyed. Another 41% pointed to the internet.

Tristan Harris, a former design ethicist at Google, argues that many product designers for online services try to exploit psychological vulnerabilities in a bid to keep users engaged for longer periods. Harris refers to an iPhone as “a slot machine in my pocket” and argues that user interface (UI) and user experience (UX) designers need to adopt something akin to a Hippocratic Oath to stop exploiting users’ psychological vulnerabilities.

In fact, there is an entire school of study devoted to “dark UX”—small design tweaks to increase profits. These can be as innocuous as a “Buy Now” button in a visually pleasing color or as controversial as when Facebook tweaked its algorithm in 2012 to show a randomly selected group of almost 700,000 users (who had not given their permission) newsfeeds that skewed more positive to some users and more negative to others to gauge the impact on their respective emotional states, according to an article in Wired.

As computers, smartphones, and televisions come ever closer to convergence, these issues matter increasingly to businesses. Some of the universal side effects of addiction are lost productivity at work and poor health. Businesses should offer training and help for employees who can’t stop checking their smartphones.

Mindfulness-centered mobile apps such as Headspace, Calm, and Forest offer one way to break the habit. Users can also choose to break internet addiction by going for a walk, turning their computers off, or using tools like StayFocusd or Freedom to block addictive websites or apps.

Most importantly, companies in the business of creating tech products need to design software and hardware that discourages addictive behavior. This means avoiding bad designs that emphasize engagement metrics over human health. A world of advertising preroll showing up on smart refrigerator touchscreens at 2 a.m. benefits no one.

According to a 2014 study in Cyberpsychology, Behavior and Social Networking, approximately 6% of the world’s population suffers from internet addiction to one degree or another. As more users in emerging economies gain access to cheap data, smartphones, and laptops, that percentage will only increase. For businesses, getting a head start on stopping internet addiction will make employees happier and more productive. D!


About the Authors

Maurizio Cattaneo is Director, Delivery Execution, Energy, and Natural Resources, at SAP.

David Delaney is Global Vice President and Chief Medical Officer, SAP Health.

Volker Hildebrand is Global Vice President for SAP Hybris solutions.

Neal Ungerleider is a Los Angeles-based technology journalist and consultant.


Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

Comments

Tags:

Death Of An IT Salesman

Jesper Schleimann

As software shifts from supporting the strategy to becoming the strategy of most companies, the relationship and even the sales process between the vendor side and the customer side in the IT industry is subsequently also undergoing some remarkable changes. The traditional IT salesman is an endangered species.

I recently had the pleasure of participating in a workshop with one of Scandinavia’s largest companies to create new business models in the company’s operations business area. As an IT vendor, we worked with the customer in an open process using the design thinking methodology—a creative process in which we jointly visualized, defined, and solidified how new flows of data can change business processes and their business models.

By working with “personas” relevant to their business, we could better understand how technology can help different roles in the involved departments deliver their contributions faster and more efficiently. The scope was completely open. We put our knowledge and experience with technological opportunities in parallel with the company’s own knowledge of the market, processes, and business.

The results may trigger a sale of software from our side at a point, but we do not know exactly which solution—or even if it will happen. What we did do was innovate together and better understand our customer’s future and viable routes to success. Such is the reality of the strategic work of digitizing here on the verge of year 2018.

Solution selling is not enough

In my view, the transgressive nature of technology is radically changing the way businesses and the sales process works. The IT industry—at least parts of it—must focus on completely different types of collaboration with the customer.

Historically, the sales process has already realized major changes. In the past, you’d find a product-fixated “used-car-sales” approach, which identified the characteristics of the box or solution and left it to the customer to find the hole in the cheese. Since then, a generation of IT key account managers learned “solution selling,” with a sharp focus on finding and defining a “pain point” at the customer and then position the solution against this. But today, even that approach falls short.

Endangered species

The challenge is that software solutions now support the formation of new, yet unknown business models. They transverse processes and do not respect silo borders within organizations. Consequently, businesses struggle to define a clear operational road. Top management faces a much broader search of potential for innovation. The creation of a compelling vision itself requires a continuous and comprehensive study of what digitization can do for the value chain and for the company’s ecosystem.

Vendors abandon their customers if they are too busy selling different tools and platforms without entering into a committed partnership to create the new business model. Therefore, the traditional IT salesperson, preoccupied with their own goals, is becoming an endangered species. The customer-driven process requires even key account managers to dig deep and endeavor to understand the customer’s business. The best in the IT industry will move closer to the role of trusted adviser, mastering the required capabilities and accepting the risks and rewards that follow.

Leaving the comfort zone

This obviously has major consequences for the sales culture in the IT industry. Reward mechanisms and incentive structures need to be reconsidered toward a more behavioral incentive. And the individual IT salesperson is going on a personal journey, as the end goal is no longer to close an order, but to create visions and deliver value in partnership with the customer and to do so in an ever-changing context, where the future is volatile and unpredictable.

A key account manager is the customer’s traveling companion. Do not expect to be able to reduce complexity and stay in your comfort zone and not be affected by this change. Vendors should think bigger, and as an IT salesperson, you need to show your ability for transformational thinking. Everyone must be prepared to take the first baby steps, but there will definitely also be some who cannot handle the change. Disruption is not just something you, as a vendor, deliver to a customer. The noble art of being a digital vendor is facing some serious earthquakes.

For more on how tech innovation is disrupting traditional business models, see Why You Should Consider Disrupting Your Own Business.

Comments

Jesper Schleimann

About Jesper Schleimann

Chief Technology Officer, Nordic & Baltic region

In his role as Nordic CTO, Jesper’s mission is to help customers unlock their business potential by simplifying their digital transformation. Jesper has a Cand.polit. from the University of Copenhagen as well as an Executive MBA from Copenhagen Business School.