Last year SAP Australia/New Zealand released the 2016 Digital Customer Experience research, which investigates consumers’ views about the quality of digital customer experiences they receive from local consumer brands and identifies the impact of this on brand loyalty and advocacy. In sharing our research with SAP customers, I meet with many business-to-business (B2B) organisations.
Often the first question I’m asked is, “Our customers are other businesses, so is this research relevant to us?” And my response is always, “Yes, because until Artificial Intelligence runs the world and all future business engagements are conducted chatbot to chatbot, your customer on the other side of the screen isn’t a business, it’s a real person, who is also a consumer.”
Our research with 6,000 ANZ consumers found they’re nearly 5 x more likely to remain loyal to a consumer brand if it provides them delightful digital experiences.
In a business setting, employees typically will have less or no choice about the businesses they have to engage with compared to the wide choice they have as an individual consumer. Therefore, we expect in the B2B segment the impact of an individual employee’s experience on brand loyalty will be less critical to the brand’s business.
However, based on conversations with customers and partners, we’ve found the quality of the digital experience does affect how an employee chooses to engage with a business, which impacts productivity, cost, and efficiency. For example, if a manufacturer wants customers to use an online ordering tool but the tool doesn’t work properly or is hard to use, the customer’s employees may choose to work around it by emailing or phoning in orders. This can increase the processing time and result in the manufacturer having to double-handle the order information to enter it into its system.
When it comes to the impact on brand advocacy, nearly 70% of ANZ consumers would be willing to recommend consumer brands that provide them with a delightful digital experience.
The feedback we receive from SAP’s customers also suggests that the impact on brand advocacy is slightly less for B2B organisations than for B2C brands. This is primarily because large numbers of consumers share feedback about their experiences and recommendations on broad social media platforms, and again, average employees often can’t choose the companies with which their employer does business.
That’s not to say advocacy is not important to B2B companies. An increasing number of B2B organisations, including SAP, use the Net Promotor Score rating, which measures advocacy as a key indicator for customer satisfaction and business health. Aspects of customer satisfaction typically measured include service quality, communication and responsiveness, customer support, the ease of doing business with the company, fit of products and services, and handling of issues. If these aspects aren’t well supported by a positive digital experience, customer satisfaction and the willingness to promote or advocate for the company will be impacted.
The size of a company may also matter when it comes to the the impact of the digital experience on loyalty and advocacy. For smaller B2B organisations, the impact may be greater because their customers are less likely to be locked into long-term contracts and would have more choice of providers, so risk of customer churn is greater.
Consider this: If you have a regular print supplier for your company documents, proposals, posters, and so on, and their online systems for booking, tracking your orders, and exchanging and checking artwork don’t work to your satisfaction, would you stay with them or go to a supplier that provides a better-functioning system? Which of them would you recommend to a friend or colleague who needs print services?
Improved loyalty and advocacy aren’t the only objectives organisations expect from improving customer experiences. More and more I’m asked to share our Digital Customer Experience research findings with our B2B customers and discuss what they can do to improve experiences because enhanced customer engagement is central to organisations’ overall digital transformation strategies. These transformations involve adapting their products and services and creating new channels to sell to and support consumers – all increasingly digital-only.
This is expanding the customer experience conversations outside of the marketing and customer service departments into all business functions and levels. The customer experience – especially the digital customer experience – is relevant and increasingly critical to every part of the business in every brand in the market.
If you’re from a B2B organisation, are you trying to improve your digital customer experience? If so, what are the most critical steps you’re taking? What changes do your customers want to see?
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About Jennifer Arnold
Jennifer joined SAP in May 2015 as Vice President and Head of Marketing, Australia and New Zealand. She is a member of the APJ Marketing Leadership Team as well as the ANZ Senior Executive Team (SET). She leads the ANZ Marketing team in supporting sales goals across SAP’s portfolio, building SAP’s brand and reputation ANZ, and driving SAP’s integrated marketing execution.
Jennifer joined SAP from Unisys where she spent nearly nine years, most recently hold dual roles of Enterprise Services Global Portfolio Marketing Director and Enterprise Services Practice Business Consultant. She was responsible for developing and delivering global integrated demand generation campaigns and sales enablement materials. She also developed and rolled out the company’s global sales personas program.
In her consulting role, she worked with clients to design persona-based business and technology strategies and develop enterprise services analytics projects. Prior to her global roles, Jennifer was the Unisys Asia Pacific Marketing Director, managing a team delivering campaigns focused on IT services, security, infrastructure and applications across the region.
Prior to Unisys,
A rebate involves refunding a portion of an item’s sales price after a transaction is completed. An incentive is a special offer that makes a purchase more manageable or attractive to potential customers, such as lower financing interest rates or extended repayment terms. Sometimes sellers combine the two strategies, but more typically they require buyers to pick which program they want to use.
These strategies have been around for as long as people have had things to trade. In the 18th century, for example, merchants in what is now the United States gave customers copper tokens that they could use to make future purchases. Today, digital transformation is giving us a variety of new ways to attract customers, but some business leaders may be wondering if rebates and incentives are still relevant in the age of real-time data and predictive insights.
The short answer is a qualified “yes, but…,” according to Cara DeGraff, vice president of product management at Vistex, a global provider of software for managing master data, contracts, pricing, rebates, and incentive programs.
While rebate and incentive programs remain vital elements required for businesses to drive revenue and incent buying behavior, “you cannot continue to do the same types of programs,” explains DeGraff. “The expectations are different in the digital economy. Everything is changing.”
Data and analytics are crucial to program success
Part of that change is that customers can access an incredible amount of information and opinion through the Internet. This resource means they are often more informed than past customers and also more likely to have been influenced by peer reviews and conversations on social media.
Companies and their channel partners must be similarly informed and engaged to attract and retain these customers. This level of awareness requires not only granular data and real-time analytics, but also a decision-making culture that allows the sales and marketing functions to adjust and refine their rebate and incentive strategies in concert with relevant online and social media conversations.
“You have to be flexible,” says Gary Adams, consumer products industry principal at Vistex. “Regardless of what you have tried in the past and whether it worked or failed, you have to constantly look for smarter and more efficient and effective ways to use your incentives and rebates. To do that, you have to understand how customer behavior is changing.”
Quality data helps to ensure accurate predictions
Data and analytics are critical components of the digital transformation process. They allow businesses and channel partners to ask new questions, model possible outcomes for proposed programs, and track and assess how those predictions align against actual performance over time.
Of course, collecting useful data remains an ongoing challenge for busy decision-makers. But research suggests that customers will provide this information if they trust the recipient and are given something in return.
“It can be monetary or a product or gift,” says DeGraff. “But to collect data, you need to pay people for actions, not just for purchases.”
How businesses structure these exchanges is important. Experts such as John McDonnell, an industry value advisor for SAP, recommend avoiding overly complex offers. “Keep things simple to avoid confusion by customers about why they are doing business with you,” he says. “Every transaction should be as transparent as possible.”
The side effect of this struggle: an ever-deepening web of legal complexity that has put insurance in a somewhat unique position in the digital era. While Uber transformed the taxi industry overnight, and even banks now offer user-friendly digital services, regulatory bulk still has insurers asking customers to post off forms and speak to brokers on the phone to buy or change policies.
In a world where people have come to expect near-instant digital everything, insurance companies have been allowed to hide behind reams of regulation to largely go on as they were in the pre-digital age. And while customer satisfaction is falling, I’ve heard few campaigning for insurance to go digital. Thus, the industry seems content, even invested, in keeping things the way they are.
Unwinding decades-old systems, building new digital services, and relaunching the business in the hope that it all works as well as before: it just sounds too risky, too daunting, and too expensive for the old, conservative insurance institutions to seriously consider, if they don’t have to.
If the recent past has taught us anything, however, it’s that pent-up frustration with a given industry will eventually explode, leaving a path of destruction and technological innovation in its wake. For insurance, the signs are already there: the percentage of US adults with life insurance has fallen from 59% to 36% since 1960. And you can forget about selling younger generations those nice-to-have policies if it means doing paperwork, rather than tapping an icon in a smartphone app.
The regulatory structure must somehow make it possible for insurance to be Uberized. We know the technology exists, and it’s hard to believe it would take long for Uber-like insurance apps to emerge if law permitted. In fact, some startups are trying their luck already. The website of Lemonade, a fintech using AI and machine learning to manage policies and claims, tells us to forget everything we know about insurance. Uberization will come in the form of a peer-to-peer insurance model, meaning Lemonade isn’t in conflict with its customers over claims, we’re promised.
In an article titled Why I’m betting on Lemonade, the company’s own William Latza wrote: “Traditional insurers are burdened with centuries of development that got them to this point … I’m betting on Lemonade because it is unburdened by legacy.” He is “convinced Lemonade will bring insurance to 21st century consumers who have learned to shun insurance and insurers.”
There is, of course, reason to be skeptical. In a counter-piece, Why I’m betting against Lemonade, law professor Jay Feinman wrote: “Apps, bots and a giveback to charity just aren’t enough to transform the very business model of insurance.” While he hopes he’s wrong, Feinman thinks it’s too much to expect the complex, rule-heavy insurance game to be turned on its head overnight by a spritely startup.
It’s much more likely that change will happen slowly, piece by piece. Technologists will keep plugging away, finding potential in AI, telematics, blockchain, sensors and big data. Regulators will try to keep up, allowing innovation to the point that insurance remains a lubricant that keeps society functioning. The survival of the old insurance institutions will depend on how they react to this progress.
But few are getting carried away just yet. There are rules to be followed – for good reason – and it will take time to change them. Until now these rules have shielded insurance from digital disruption, but it won’t last forever. What can be appified, will eventually be appified, and insurance is no different.
Incidentally, a new SAP Canada whitepaper – IFRS 17: Obligation or Opportunity? – explains to insurance companies how looming regulatory changes can be their springboard into the digital era.
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.
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.
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.
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.
The Digitalist Magazine is your online destination for everything you need to know to lead your enterprise’s digital transformation.
Read the Digitalist Magazine and get the latest insights about the digital economy that you can capitalize on today.
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.