As a follow-up from our interview with Roberto Longo from McKinsey & Company on the state of Digital Marketing, we are excited to share today’s guest blog post by Homayoun Hatami, also from McKinsey & Company. As a senior partner who leads the EMEA Marketing and Sales practice, Homayoun shares his perspective on new and innovative ways to unlock growth potential despite operating in a disruptive environment.
Companies are grappling with disruptive trends but great sales leaders focus on the opportunities far more than the threats. This is a great time to grow, but you need to know where to look to capture the next wave of growth; you need to understand the technology that’s creating new channels to reach new customers; and you need to unleash the power of advanced analytics and artificial intelligence to open up new worlds.
Ambitious sales organizations are already making giant strides on these three fronts.
All sales leaders must pay attention to what is happening in the wider world to anticipate opportunities. The best make trend analysis a formal part of the sales planning process. Knowledge is one part of the equation, the other is the will and the means to translate macro-shifts into real top-line impact fast. The first-mover advantage created by forward-looking sales plans drives sales in areas where competitors have yet to arrive.
Companies must be willing to take risks and create sales capacity long before the revenue will materialize. More than half of the fast-growing companies we interviewed for Sales Growth look at least one year out, and 10 percent look more than three years out with some investing more than 6 percent of their sales budget on activities that support goals at least a year out.
Of course, dumb luck can sometimes pay off, but winning sales organisations make their own luck by developing the ability to peek around corners and consistently identify sales opportunities that may not materialise for more than a year. Resource commitment is important: forward planning must be part of someone’s job description—not just part of top management’s lengthy to-do list.
Almost every B2B buyer goes online before purchasing, which resulted in a trillion dollars of established B2B digital commerce sales in the US in 2015. It’s not just research, more than a third of B2B buyers prefer using digital channels when purchasing. After all they’re used to doing it at home now.
Sales organisations must respond, but channel structures and management are struggling to keep up. A majority of senior sales leaders see channel management as a major gap in their organisation’s capabilities. OEMs can no longer rely on agents and resellers as the primary customer touch point, they need to understand how to play a much more active role throughout the customer’s buying journey.
Companies are understandably nervous about the threats: as many as one million B2B salespeople could lose their jobs to self-service digital commerce by 2020. Digital also enables greater price transparency, which has led to 4 percent lower average prices in the automotive industry for example. Meanwhile, digital natives are entering markets at different points in the value chain diluting profit pools and threatening the competitive barrier of existing OEMs’ partner networks.
Of course the opportunities are also enormous. Digitisation provides a wealth of tools to help OEMs radically overhaul how they serve customers. They can engage with customers along the whole decision journey, delivering a more consistent experience. Such tools please customers, but also slash the cost-to-serve compared to more expensive indirect channels.
Big data and advanced analytics are finally catching up to their own hype, while machine learning and intelligent automation are not far behind.
Companies that make extensive use of customer analytics have profit improvements that are 126 percent higher than their competitors. Advanced analytics can help guide decisions across the sales organisation, yet only just over half fast-growing companies claim to be moderately or extremely effective in using analytics to make decisions.
The results are more encouraging when looking at specific sales activities, where around three quarters believe themselves to be above average. It seems that while companies recognise the potential, there is some way to go before advanced analytics drives decision making.
Companies need to quit pondering and make a full-blooded bet on big data. Analytics helps identify the best opportunities and thus businesses can prioritise those activities most likely to drive profitable sales growth. Leaders’ judgment still matters, but it can be augmented by large datasets that can remove uncertainty about available choices. Big data promises to end bad decisions.
Automation can do all the boring but necessary stuff, which means people can do what people do best—forge empathetic relationships. Let the Artificial Intelligence do the time-consuming task of lead management; after all a bot can contact 100 percent of leads and keep them warm for weeks or months via email.
Companies that have pioneered the use of AI in sales rave about the impact, which includes a 50 percent increase in leads and appointments, cost reductions of 40 to 60 percent, and call-time reductions of 60 to 70 percent. Customers love it too as they get what they want faster.
AI is already transforming a wide range of industries and functions. By 2020, customers’ relationship with an enterprise will be almost devoid of human contact. Is sales—once the preserve of the smiling people-person—becoming a ruthlessly efficient function with no need for people? We think not. Or at least not quite.
For more insights and trends from over 3,100 global sales trailblazers, download a copy of Salesforce's second annual State of Sales research report.