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Quotable Podcast Episode #44: “How B2B Digital Leaders Drive More Revenue Growth" with McKinsey & Company's Jennifer Stanley and Candace Lun Plotkin

Hosts: Tim Clarke & Kevin Micalizzi
B2B customers are consumers, too. And they have consumers’ expectations for 24/7 access to accurate information and easy ways to buy. How can you use digital to give these buyers what they’re looking for in your B2B buying process? Join McKinsey & Company’s Jennifer Stanley, Expert Partner, and Candace Lun Plotkin, Director of Knowledge, as they reveal what they’ve learned from clients and their research. Here's a hint for successful digital transformation: Start small, test, and build from there.

Put the customer journey first, and the sales pipeline metrics second.”

Jennifer Stanley | Expert Partner, McKinsey & Company

Episode Transcript

Tim Clarke: Today we'll be discussing how B2B digital leaders drive more revenue growth with their peers with two very special guests, Jennifer Stanley, Expert Partner at McKinsey and Company, and Candace Lun Plotkin, Director of Knowledge at McKinsey and Company. So welcome, Jennifer, and welcome, Candace.

Jennifer Stanley: Thank you.


Candace Lun Plotkin:  Thank you.


Clarke: So Jennifer, I want to come to you first. I'm sure our listeners are familiar with McKinsey and Company. Perhaps you can give a bit of a background on yourself and some of the work that you do there.


Stanley: Happy to. Nice to be with you today.

I'm a partner in our Marketing and Sales Practice where I help lead our sales and channel management group. And I'm based in Boston. And I have been working in sales and marketing both in and outside of consulting, gosh now, for over, my goodness, 22, 23 years. But it does seem like [long]. But most of it has been in B2B, a little bit in consumer, but the bulk in B2B.  


Clarke: Perfect. And Candace.


Lun Plotkin: Yes. Happy to be with you today. And thanks, everyone, for listening. My name is Candace Lun Plotkin. I am the Director of Knowledge for Marketing and Sales for McKinsey and Company.

I have been with McKinsey about 20 years now. I was a Procter & Gamble marketer prior to that. And I spent a bit of time in the middle of my years at McKinsey as the Chief Marketing and Sales Officer of a technology startup.


Clarke: Perfect. I'm Tim Clarke, Senior Director of Product Marketing at Salesforce. And I'm joined by my co-host, Kevin Micalizzi, Senior Product Marketing Manager at Salesforce, and also the Executive Producer of the Quotable Podcast. Welcome, Kevin.


Kevin Micalizzi: Thank you, Tim. Happy to be here.


Clarke: So let's dive straight in. And as I referenced earlier on, we're going to be really focusing on how B2B digital leaders drive more revenue growth. I want to start off just with what do you actually mean by digital for B2B sales? That's just to make sure we're all on the same page.


Stanley: Why don't I take that one? Candace, if you, of course, have other thoughts, feel free to chime in. But when we talk about digital sales, we actually mean it in two dimensions — one is external and one is internal.

So external are basically everything you'd see as a customer. So these are all your external-facing digital platforms. If you sell online, it's your ecommerce engine. If you're a company who's on social media, it's your Twitter, your Snapchat, your Facebook page, et cetera. So all of those very real digital assets. And then we also mean it internally. So how does a company use digital assets to best enable its salesforce with tools like, obviously, Salesforce.

As well as hard tools in terms of what salespeople can bring out to, say, codevelop their product configuration with a customer on a tablet. So it's both of those things when we speak about digital sales.


Micalizzi: So what are some of the biggest trends you're seeing?


Lun Plotkin: I'll take this one. You know, there is so much happening in the digital space. And I think one of the big things we see that we talk about a lot with many of the clients we work with is really focused on the consumerization of business buying.

And what this means is that we are all consumers in our outside-of-work lives, and all the things that we're seeing in the consumer world where, you know, we have 24/7 access to anything we might want to search or buy. We often have 24/7 access to help through chats, detailed product information that we can get. And we are expecting a real sense of access and a real sense of being able to get information very quickly and very accurately.

And so what we're seeing on the B2B side is there is a ton of demand by customers to be able to use many different channels to reach manufacturers and suppliers. And so that includes digital channels like ecommerce as well as very interconnected channels, face-to-face selling, inside sales, et cetera. So that's one big theme.

I think a second big theme we're seeing is a real look at the customer decision journey. So what is the buying process that customers go through? What are the stages they go through? And how and when and where they want to access manufacturers through that? And what we're finding is a real need to interconnect and make that process seamless, regardless of which channel you access at which point in the buying process.


Clarke: And I'm really interested to get your perspective on the differences between the B2B world and the B2C world.

I think certainly we've seen a lot of progression in the B2C world and the expectation from consumers in the way that they engage with companies. So have you seen any overall differences between B2B and B2C?


Stanley: I'll maybe take a shot at a couple of them. I think one of the big differences is the nimbleness and the mindsets that characterized B2C when it comes to consumer. I think they're far more nimble, and they tend to have a much more open mindset to [try on] things very quickly, learning from them, and then stopping if it doesn't work.

So, for example, you can imagine things like A/B testing just to figure out what kind of bundles or configurations sell the best, sell the fastest, and at the right price point online. A lot of the consumer firms that we see and work with, this is just like normal, everyday working life for them. If I transfer over to the B2B world, and I think about maybe even some of the industrial or manufacturing-led companies that I work with that have these very large legacy salesforces.

Oftentimes they're in arrangements with distribution or demand fulfillment, like their attitude toward how much, how fast we can try things on digital, how nimble we can be, whether or not it's something that our customers will even want because they're so used to interacting with us in those legacy channels. It's almost like you're speaking in two different languages when you're having these conversations. So one of the real challenges, but also, I think, an exciting opportunity for B2B firms is to wrap their heads around this notion of the consumerization of B2B.

And to maybe operate with a little less fear in terms of testing, trying, fixing what they're doing on their digital platforms so that they can reach customers in the way that customers want to be reached, which, as Candace was saying, is probably a few steps ahead of where most B2B companies actually [find] themselves.


Lun Plotkin: And I would also say, in all fairness, right, there is a reason why B2B companies lag behind consumer companies in terms of digital transformation, right?

And those reasons have to do with what they're buying and selling and how they buy and sell. For example, right, there are usually many, many more decision makers involved. Many of the price points are very high. There is often high complexity, technical specifications, and some very, very real buying requirements, as well as requirements to put out RFPs where you're bidding several different companies and suppliers against each other, right?

So the buying and selling process is so much more complex that I think use of digital channels has lagged behind, and there are many good reasons for that. And that being said, what that also means is, picking up on Jennifer's point about this being an opportunity, we see a huge opportunity because we look at companies that have a much higher digital quotient, and they drive growth at five times that of their peers that are lagging even more on the digital side.


Stanley: And Candace, right, this is the exact reason, though, why being nimble and having an agile mindset, I think, is worth it and should take some of the nervousness away from some of these B2B firms is that we know it works.


Lun Plotkin: Absolutely.


Micalizzi: Now when we're talking about transforming the buyer's journey and how sales functions, there are so many possible areas you could transform. What should we be focusing on?


Lun Plotkin: I think that's a really good question, and I think not having the right answers to those questions is actually what keeps a lot of B2B players on the sidelines, even now. We've done a lot of research, and I think there are a few things that are quickly emerging and can be proven with a pretty significant fact base. So I think one is we see that business buyers, in fact, really do want to use online channels in many, many cases.

And one of the places where they're most interested in buying online, actually completing a transaction online, whether it is a small part or something large, complex, and multimillion dollar, is you're seeing 85% of business buyers across industries are quite interested in doing a repurchase. So that means same products, same specifications, or similar specifications. They would love to do that online and, in fact, don't want to talk to a salesperson to do that. So you might imagine that that would be a good place to start.

I think a second place to start is we also see a ton of research happening by business buyers in the online realm and that happens just to get into the consideration set. And so there are many things that B2B companies will want to do to make sure that they're getting into the decision set and that the informational content they have online that can be done through self-serve is very accessible and very accurate.


Stanley: You know, Candace, as you're sharing those, I'm thinking they're excellent examples from that external perspective that I mentioned in terms of what does digital sales mean, I think, on the internal side can often be a good place, too, for a company to get started with a digital transformation, especially in areas where the impact is obvious. And maybe I'll give one example of a services firm that we worked with recently where they created what they referred to and what we would refer to as a dynamic deal-scoring tool.

So when the sales force is going to price a very complex deal that's a combination of product services and is basically an end-to-end solution, they can type in the dimensions of the offer and the price point or price points that they're looking to share with the customer and now instantaneously on their tablet, get a very quick kind of red-yellow-green score of where their suggested price stacks up against all of their peers who priced very similarly complex solutions.

And know whether or not they should potentially go back to the drawing board and try again, or whether they're actually in a pretty good spot, given what the company's been able to achieve. So I share that example because a lot of times, I think, companies can struggle or feel overwhelmed when they hear the term digital transformation when, in fact, you can start with very contained digital efforts, like the one I just mentioned, that are about enabling the sales force and where you can measure financial impact.

And often that's the key to unlocking, I think, maybe a more creative set of ideas among executives once they can see that the ROI from these types of efforts is absolutely there.


Lun Plotkin: Jennifer, that makes me think of another example as well. Many of the companies we work with have a big amount of success by building engines that we would call next-product-to-buy engines, right? So for your set of customers, what would be a similar next product that they would like to purchase or use that other companies with a similar profile are, in fact, buying, right?

And this can be great information for a sales rep to have immediately. And in its simplest form, it's really a recommendation engine. So a sales rep, whether they're inside sales or face to face, might offer that to the customer. The analogy in the consumer world would be Amazon where they say "People like you bought this" or "Would you be interested in this other product?" That can be incredibly helpful and not that difficult to do, and in particular, not that difficult to test to see whether you can move the needle on bringing more products and services to customers that they, in fact, would want and use.


Clarke: So all of these conversations here sound like they're focused on inbound people that already have an idea of what they want to purchase and are obviously looking at different vendors. One of the other conversations that we really have quite a lot on the Quotable Podcast is in the outbound space. So for a sales rep that is really looking at their territory and working out which prospects to really engage with, one of the biggest challenges that we really see there is that in the digital realm, there's obviously so much information that the rep can really look at.

So have you seen, again, from some of your research, what do you see the most successful sales reps really doing, and how are they leveraging technology to really have these relevant and contextual conversations?


Stanley: As you were speaking through that, I was thinking to myself, I'm not sure that it's the sales rep that should bear the primary burden here, given the bulk of information that is available.

I think this is where analytics and marketing come together, if they're already together in an organization, and really owe it to the sales force to deliver very specific insights that help the salesperson know immediately "where should I be spending my time on outbound prospecting?" because otherwise I can easily see, and I have seen, where salespeople try to do this kind of analysis on their own, and they quickly get very overwhelmed.

So there're a few clients that we've worked with, and Candace, I think we've done this together at a few spots as well, where we actually help the marketing organization take the vast amounts of analytics that are available both internally via the CRM system but also externally using publicly available data sources to arrive at new micro-segmentations of who should be high-priority targets, and then deliver those in bite-sized chunks to salespeople so that they're manageable, given, right, there're only 24 hours in the day and, obviously, people have other things to do in their lives [laughs] as well.

But every time I hear this question, Tim, I always kind of come back full circle to this notion that it's not just sales' responsibility to figure this out. There's a broader theme to be played here. And having marketing strategy of the digital team set separately, all at the table deciding what to do about big data so that it's easy to use and consume for the sales force, I think, is one of the most important things that can be done for them.


Micalizzi: Looking at that alignment with sales and marketing, that's one aspect in terms of the transformation. I guess my question for you is, for organizations that haven't embraced this at all, where do you start? What do they need to be focusing on?


Lun Plotkin: I think where to start, what we see work really well across industries and across companies is to start with the customer, right?

And so really understanding how do customers want to buy at different stages of the buying journey, where are their biggest pain points, and then where can we actually help solve against them, right? And in particular, you actually need to, if you wanted to do it quickly, you might take whatever's your highest-priority segment of customers, and you might actually want to map the journey, right? So what happens when this set of customers goes to buy your products? What do they do as they're figuring out what to buy? Where do they get stuck in the process? Do they get stuck because we're too slow to respond to RFPs?

Do they go and buy from other people because they can't get their questions answered as they're trying to compare and evaluate different products and services and brands and companies to buy from? And then depending on what the answers are to those questions, that can give you early clues on where to start and where to try to be agile and offer something. So for example, if the big bottleneck for your most important customer segment is around understanding your offering, pricing, and specs versus other companies, you might imagine trying to build an easy comparison engine that they could use.

You could either put that online, or you could have your sales reps go to them and say, "Hey, let's talk about what you want. Let's actually run it through.” An engine will spit back to you a page that shows where this product stack ranks, where do we rank versus competitors, and that can help you make a choice. You can then very quickly track and see, is that moving the needle? Is that helping people choose your products. And if that's the case, you might do more of that.


Stanley: Candace, I think you're making here a really great case for using the fact base to motivate and align the organization to change, right? So if there's a struggle to get started, often it's because people don't agree on what the priorities should be. And the very first thing you said about the buying journey reminds me that the priority should be the customer. And so let's hear from the customer what they want and need us to do digitally and that's motivating and compelling to them in terms of their willingness to purchase from us and to stay loyal with us.

And I think companies that take that angle as the entree to a transformation end up being able to move much faster because then they can always come back to this is what the customer's asking us for. And that often settles a lot of otherwise very lengthy internal debates.


Lun Plotkin: And as a side note to that, right, we're not suggesting a company go and just launch a digital transformation that may cost a lot of money, right?

What we're suggesting is you take one set of customers. You figure out how they want to buy, where you can use digital enablement to help them buy better or faster or buy more or at better margins. And then we're saying can you create something, whether it's a small A/B test to help prove the point. And if that's the case, you can generate momentum, either to spread to other customer segments or to solve for a different pain point along the buying process.

And I think this speaks to what we were talking about earlier, which is really agility, right? You can't sit and study this problem for a year before you decide what to do. I think what you need to do is be very, very  targeted and say, "Okay, what's our broad digital strategy," number one, and then number two, "Where can we pick a set of customers or a set of accounts and try to solve a pain point that they have. And let's just get out there and try something and see how it works."


Clarke: I know for some of our listeners who are executives and leaders, there's been some great guidance already. But it also sounds like in a couple of those previous answers, there's a clear responsibility on those individual contributors as well, perhaps the people on the first line who are actually seeing some of the challenges or perhaps opportunities on things that can be transformed. So do you have any particular tips for any individual contributors, whether in sales or in marketing, and kind of what role they really should be playing in this overall digital transformation?


Stanley: That's a good one. Quick question: Are you talking about individual people or individual functions or both?


Clarke: It could be both. I'm mainly thinking of, as I was listening to your answers, perhaps a sales rep who is seeing a massive opportunity, just making sure that the responsibility doesn't always sit right at the top, kind of having that culture of feedback and actually getting these people to feed back to the executives some of the things that they're seeing.


Stanley: Gotcha. I'm curious, Candace, to hear what you see as well. But I often think it's a real challenge to do something as simple as get the feedback loop going in an organization today.

And you would think with all of the channels we have to reach one another, you'd think with all of the touchpoints we have in seeing customers that there would be tremendous opportunity. And I think that might be at the crux of the problem with getting good feedback is that a lot of times individual contributors can get really overwhelmed by the information that's coming at them and the number of interactions they're having and getting bombarded with emails and texts and however else people are reaching out to them.

But what I've seen that's been pretty effective is when companies actually go what I call a bit old-school on feedback loops and really just institute some common easy practices, like every third Friday of the month, we're doing kind of the open virtual brown-bag lunch, and that's our time to share what we're seeing in terms of digital opportunities with customers. And whoever's free to join, joins, and it's open to a select group — but not a select group but a big enough and still select group — that might be a better way to put it — group of colleagues so that you have the opportunity to get the richness from them of what they're seeing and experiencing.

And one client I work with does this and basically they get together on a webcast. On one of them a salesperson shared that he was engaging with multiple people at his account — and this is a key account manager, working with a customer in multiple countries — on WhatsApp. And that was the new way that they were engaging instead of emailing or going through the typical company systems.

And they got a lot of decisions made much more quickly and the customers loved it. So the next thing you know, the whole sales team in the region who were serving similar accounts decides to test that out. So simple, and it came from having a normal conversation and regularly scheduled one of those third-Friday-of-the-month brown-bag webcasts. I share that because I think it's a great example of just taking some basic kind of meeting management principles and trying to simplify life for people, and then being willing to go out and test something new and different and quick and letting people know what's working and what's not with the customer.


Lun Plotkin: I have another thought to add to that. I think, Jennifer, what you're suggesting I've seen work really well. I would say there is a collection of companies, and they span high tech, industrial, medical technology, and even healthcare, where I've seen both the top-down, bottom-up approaches work, right? So Jennifer, I think there's the bottom-up that you suggested.

I would also add to that many sales managers, when they have their weekly sales calls, will add a quick three minutes at the end where there's a round robin and people — the sales reps — will either name a pain point or an issue they've seen with customers that's cropped up over the last week, or something they've seen a competitor do that has worked well that we can learn from. So that's one thing, and that's a great way to get the conversation going. And then usually one sales rep is then responsible for collating the responses and making sure that content goes over to marketing.

So that's one way kind of bottom-up. I've also seen a top-down approach work in conjunction with that, where there may be a decision between sales and marketing to launch a small bit of customer research. And that research could be qualitative [mapping] across the journeys, as we talked about earlier, or it could actually be quantitative research, which is slightly more involved. And once you get the information about how customers want to buy, you take that back to the sales in the field and you say, "Here's what we're seeing. Does this resonate?"

And you actually hold a brainstorming session that says, "Here's how we could solve some of these pain points." And that's really important to do cross-functionally with sales and marketing. It also pushes a lot of that kind of cross-functional total commercial view on this, which is some of what we've discussed. And I think it pushes marketing and sales to work together.


Stanley: And Candace, maybe even product development, too, right, so they avoid the "if you build it, [laughs] they will come" kind of [approach].


Lun Plotkin: Totally agree.


Stanley: [Laughs]


Micalizzi: So I know we all know the old cliché, "What gets measured gets done." And I know typically, when leadership has a set of metrics they're following, anything that doesn't fall under that umbrella really is outside of the scope of what they want to look at and what they want to consider. So my question for you is, how should we be measuring success with this transformation?


Lun Plotkin: So I can say we've seen a few things work.

We have seen adding simple metrics like the number of A/B tests that were done, and actually counting things that didn't work and things that did work. That can be helpful because it pushes you to be agile in your testing and not wait a long time, right? So there's a certain amount of quantity that you actually want to generate so you can land on something that will be high quality and work and be scalable. So that's one thing that we've seen.

We've also seen a lot of companies add a metric around collaboration between marketing and sales [at] customers. So are we having conversations with customers where we're really asking them, "Hey, what are competitors doing that's working really well? What are we doing that's not working well? And what are we doing that you wish we could do more of?" So we'll often see metrics like that that really help along the way. And then we'll also often see that companies will add specific digital metrics.

So things like, what is the conversion rate from awareness to asking for an RFP, right? So those would be more hard metrics along the sales process. What is the conversion rate once we get someone to use a comparison engine? If we use next product to buy technology, does that actually help convert into sales? Jennifer, I don't know if you have other ideas.


Stanley: Yeah, just to jump in on that one, because I was going to say what I think tends to be more common now, or more successful might be a better way to put it, is actually not just taking that sales funnel or sales pipeline view of the world and infusing metrics that are digitally oriented, but sticking with the customer view of the world and the customer journey that they're taking and infusing the metrics across the different digital platforms and then linking them back to a sales pipeline.

So there's something here which is also a mindset shift around what metrics matter to put the customer journey metrics first, and then the translation for the sales pipeline metrics second. So Candace, you gave a couple of great examples of like that consideration to, I'm asking as a customer for an RFP. I also think companies are becoming much, much more sophisticated about the very detailed metrics that they're tracking within each stage of the customer journey and on every individual platform, right?

So the typical things like click-through rates and time on your website, what customers are searching for, and what pages they're landing on on your website, and linking that back to the efforts that a company may be making, for example, on credit configurators or next-product-to-buy engines. Is that actually where customers are spending their time? So there're these sort of mega metrics that, Candace, you were referring to a few minutes ago in terms of how the processes, right, that a company is using to go after digital like A/B testing.

And then there's everything all the way down to the very, very narrow and very specific types of metrics that I was just mentioning.


Clarke: So as we move to a close here, there've been some great areas and insights you've really given us and, obviously, our listeners for how they should really focus on the opportunities to do digital transformation. So just looking for some closing thoughts. Jennifer, handing over to you first.


Stanley: I would say find a place to get started if you haven't, and it can be small. And probably even start — well, I wouldn't probably, I would for sure start with understanding the customer's digital expectations.

And then if a company has started, I would say look for where you get the biggest bang for your buck next because having the way to get immediate impact, measurable impact, is a way to galvanize an organization around a broader set of changes. So I suppose my message here is almost one of like have no fear. There's a place to start or a place to jump in and improve for just about every company. And it doesn't need to be all-encompassing to make a big difference, both in the financial and the operating performance of a company.


Clarke: Perfect. And Candace.


Lun Plotkin: What I would leave our listeners with is if you're trying to find a good place to start, you're going to ask customers and you're really going to get in touch with where they're getting stuck, one place in particular to probe is where can you help make the customer's experience be consistent with you, right? So whether it's online or offline, look for the transitions where you're going to transition between one channel to another, or when a single channel is not really meeting the customer's needs.

And probe those spots for where you might be able to use digital enablement to help make the experience seamless.


Clarke: Perfect. Well, look, Jennifer and Candace, we really appreciate your taking your time today to spend with us and for sharing your great insights.


Stanley: You're welcome. It's been great. Thanks.


Lun Plotkin: Thank you so much.


Clarke: And thank you also to Kevin for co-hosting.


Micalizzi: Happy to be here. Thank you.


Clarke: And remember that the best way to keep up to date with all the great sales experts at Quotable is by subscribing at Quotable.com/subscribe. And if you've found this episode valuable, please give us a five-star rating and feedback, and don't forget to share it with your peers, your prospects, and your customers. Thank you.

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