Sales Strategy - powering.depowering.de/wp-content/uploads/2017/07/2017_White-Paper_Digitali… · digitalisation brings many opportunities for companies to remain and to expand competitiveness

Wiesbaden, June 2017 www.d-v-s-b.com

Digitalisation in Sales –

Sales Strategy

Opportunities, Risks, and Calls for Action

1 Digitalisation in Sales – Sales Strategy

DIGITALISATION IN SALES –

Sales Strategy

Opportunities, Risks, and Calls for Action

BACKGROUND

You may have caught up on digitisation, but have you

made it to digitalisation? Both terms can be easily

confused and used interchangeably in some contexts.

The term "digitisation" originally refers to the pure

transformation of analog information into digital data.

Whereas, “digitalisation” involves the inclusion of this

already digitized data to peoples’ realities.1 This implies

that the whole process of digitalisation is dependent of

data digitization; however, this does not happen the

other way around.2

All parties in the business world are aware that

digitalisation brings many opportunities for companies

to remain and to expand competitiveness in sales or

other areas. On the other hand, digitalisation involves

risks that companies should always consider.

But what does this really mean to companies? Do they

actually recognize and take advantage of digitalisation?

What are the risks involved and how can they be well managed or hedged? Questioning these

issues has led us to examine fully the issue of digitization in sales and to create

recommendations to act on the field.

Currently, many companies link the concept of digitalisation in sales with eCommerce, an

extension of the classical distribution channels. However, this is just one of the many faces of

digitalisation. Companies must be aware of the additional application

possibilities of new technologies. Then, companies should exploit them, in order to improve their

sales skills and increase the efficiency of organisations.

DIGITALISATION IN

SALES GOES FAR

BEYOND E-

COMMERCE

Digitalisation changes all

aspects in Sales. Companies

that exploit the next

emerging opportunities the

right way can achieve

significant competitive

advantages.

Digitalisation in Sales – Sales Strategy 2

The aim of this paper is to provide a decision-oriented overview of the impact of digitalisation

on Sales strategy. Initially, the various elemnts of the digitalisation are explained to illustrate the

width of the digitalisation.

ELEMENTS OF DIGITALISATION IN SALES

Digital change is clearly noticeable and changes the

market, society, environment and human. Companies

are forced to face the challenge of digitalisation and to

use their opportunities consistently, even and especially

in sales.

New technologies have a significant impact on the

infrastructure that is available to sales organisations.

The broad penetration of the World Wide Web suggests to companies the chance to be involved

in global online sales and marketing. The use of mobile devices, such as smartphones and

tablets, has also become the norm. These appliances provide access to information, data, and

applications at any time and from almost anywhere. Digitalisation also drives the global and

virtual free communication in real time via email, SMS, WhatsApp, and Web meetings. This

process has been increasingly integrated into the corporate workday of many people and has

influenced both the external and internal communication at work, as well as the employee

productivity and their respective job profiles.

In all company processes, new ways to optimize sales and customer processing have evolved in

recent years by the "Internet of Things" and the strong penetration of software, such as ERP and

CRM systems. Besides, significant amounts of data have been produced by the development of

digitalisation. Targeted analyses and uses of this data, which are summarized under the heading

of "big data analytics", allows making decisions, on a factual basis in unthinkable ways some

years ago.

Another face of the digitalisation can be described with the term "Digital Participation" of

customers. Social networks -like Facebook -, review sites, and blogs have already a considerable

influence on purchasing decisions - both online and offline, B2B as well as B2C. Professional

networks, like Xing and LinkedIn, offer to sales staff and even to headhunter the opportunity to

quickly and easily identify, qualify, and to respond to key decision makers.

Digitalisation also changes Sales in traditional retail formats. Therefore, the face of "Digital

Merchandising" includes online product displays on tablets or large displays in shops. In


addition, the product’s presentation can be supported by the use of virtual-reality goggles. The

opening of virtual stores is already starting through the advances of technology.

Through the development of digitalisation, new "digital” business models have also emerged.

Many traditional companies add or even change completely to these business models that are

summarized by the terms Cloud apllications, XaaS, and Sharing Economy. They change sales

activities considerably because now services, instead of capital goods, are sold.

Furthermore, entirely new competitors, which may change market landscapes as “disruptors”

completely. Let’s recall how music market has changed, ever since Apple’s launch of iTunes or

the extraordinary rise of Salesforce.com. In addition, the emergence of virtual market places

providers facilitates market access for any size of business more or less anywhere in the world,

although it also provides an increase in price transparency.

All these developments present opportunities and risks for companies, as a whole, and especially

their sales organisations. In order to exploit the growth potential of the digital world and to avoid

risks as possible, it is important to understand the effects of digitalisation on all elements in

sales. Dealing with these changes poses considerable challenges for sales organizations and is

accompanied by new tasks and massive qualification requirements.


DIGITALISATION AND SALES STRATEGY

Digitalisation has a significant impact on all elements of a sales strategy. The following figure

shows the most important changes at a glance. The darker the respective field, the greater the

changes.

Legend heat map:

Very large influence on sales strategy Large influence on sales strategy

Medium-sized influence on sales strategy Small influence on sales strategy

Very small influence on sales strategy

Market- and

customersegments Competitive strategy Customer care Channel Condition scheme

More accurate and more

differentiated markets and

customer segmentation based on

Big Data Analytics

Global competition endangers

existing competive advantages

Consistent processing of additional

customer touchpoints

-> Assurance of a total customer

experience is necessary

Additional information and

distribution channels that have to

be managed

Establishment of a global and

performance-based condition-

system, which makes cross

references less attractive and

reflects the different services of the

various channels

Easier internationalisation of sales

activities, especially online sales

Emergence of new, industry

foreign competitors with

considerable growth dynamics

Individualized and effective,

datadriven customer care with the

use of Big Data

Increasing importance of digital

distribution channels, increasing

digital partners because of the "the-

winner-takes-it-all" phenomenon

on internet

Increased transparency in the

competitive environment

Generation of new sales

competitve advantage by

consistent use of the opportunities

of digitalisation

Relocation of sales process steps

to the customer (e.g. ordering

process, product configuration,

CRM data management)

Consistent multichannel

managememnt is needed

Automatic generation of

personalized offers and product

recommendations based on Big

Data Analytics

Cost-efficient implementation of

direct sales is possible

DIGITALE

Partizipation

Social media/ networks

Bewertungsplattformen

Easier and comprehensive

informing about customer and

employee satisfaction of

competitors

Consideration of the opportunities

and risks of social media in the

customer relationship strategy is

necessary (e.g. as a sales,

dialogue and information- and

service channel)

Review of the use of socialmedia

platforms as a sales channel

Generation of competitve

advantages by using the digital

opportunities in offline shops

New store concepts and locations

due the new possibilites of online /

offline product presentations e.g.

media presentation of features

Opening of virtual stores on

previously atypical locations is

possible

Contact of new customers by e.g.

Cloud applications

Revaluation of previous strengths /

weaknesses, if services are sold

instead of products

New distribution channels and

partners may be required

New conditions systems are

necessary because of the sale of

perennial services instead of

capital goods

Creating of competitive advantages

by a fast sales integration of new

business models (e.g. sharing

economic)

DIGITALE

Geschäftsmodelle

Sharing Economy

Cloud Apllikationen

DIGITALES

Merchandising

Online

Warenpräsentation

Augmented Reality

Virutal Store

DIGITALE

Infrastruktur

World Wide Web

Smartphones/Tablets

Online Kommunikation

Software (z.B. CRM)

Internet of Things

Big Data Analytics


Segment customer more slender

The definition of a processing market and customer segments is the basis of every sales strategy.

The worldwide network through the World Wide Web facilitates the addressing of smaller

customer segments and the internationalization of sales, particularly online sales.

Due to the growing number of accessible market segments and the processing of digital data

(Big Data turns into Smart Data), it is possible to perform a slender and more accurate customer

segmentation and to adapt sales activities accordingly.

Analysis of competitors in more detail – even outside their industry

The competitive conditions, under which companies operate, are changing by digitalisation. By

increasing transparency in the competitive environment, it is possible for companies to be better

informed about their competitors and to respond early by evaluating data (for example, using

CRM data or monitoring of activities on the Internet).

The emergence of global online retailers, like Amazon, challenges many traditional businesses

in the retail sector, because the former can benefit from scale advantages and cost benefits in a

significant way. They put the traditional wholesale and retail under pressure and increasingly

become important sales partners for many companies.

At the manufacturing level new competitors are emerging, who pressure with the use of

methods of the digital economy traditional industries. The range of examples goes from

automotive (as Tesla, which operate exclusively in direct sales and this multichannel) to heating

control, where Nest uses the classical techniques in the industry only selectively.

Potential competitive advantages through digitalisation

By digitalisation a variety of new tools are available for sales organization, which makes it

possible to generate significant competitive advantages by a systematic and well-planned use.

These include CRM systems, which are also available for small companies by cloud applications

like Salesforce.com. They could not afford the purchase of expensive CRM systems in the past.

Today small companies can work as sales cost-effective and technically professional as much

larger companies.


Social media as a sales tool

Competitive advantages, which can be achieved by a professional use of social media, shall not

to be underestimated. Through the active use of social networks, companies can increase their

visibility and improve their image cost-effectively. Also B2B companies can generate new leads

and retain customers in social networks through targeted actions. For

example, "Maersk Line", the world's largest container ship cruise line,

could not only increase their brand awareness through a Facebook

campaign called #wintermaersk, but has also generated 150 new

leads, which is remarkable for a company in this industry.3

With a systematical use, companies get an information advantage and

can offer more individual and flexible customer service through the use of big data analytics.

New customers can be addressed directly with targeted content, and existing customers can

receive individual offers or purchase recommendations and sales-related information in the

form of posts, blogs or videos. Companies like Booking.com B.V. or Zalando send regularly

personalized newsletter based on data on their past purchases to their customers.

By involving customers in online communities, such as the "Nike + Run Club", customer loyalty

can additionally be increased. Since customers inform themselves on the Internet about

products and vendors, it is also of great importance to manage reviews of sites as "Yelp" or "Shop

Vote" professionally.

Digital Business Models / Consideration of Sharing Economy

Driven by digitalisation new online business models have emerged. In addition to the availability

of cloud applications, which allow small companies access to advanced tools such as CRM

systems, more and more companies expand their range of services to the model of the "sharing

economy" / "Collaborative consumption".

This opens up new opportunities for established providers and counter the threat posed by the

emergence of new market participants. So, services are sold instead of physical products or

innovative goods. For instance, the carsharing models of the big automobile manufacturers in

Germany can be listed. In 2012, Daimler established the service "car2go", in cooperation with

the rental car company Europcar. It enables its customers to use free parked vehicles in the city

area with minute clocking. Customers can locate the nearest vehicle on the internet via

smartphone apps and rent these spontaneously. The distribution is not carried out via the sales

channel “car house”, but mainly digital.


Moreover, XaaS models (Xaas = X as a Service) allow a long-term

customer loyalty and change sales work. Hilti offers its customers all

tools, service and repair costs for a monthly fixed amount. This sale of

multi-year service contracts instead of the one-time sale of capital

goods, requires the implementation of new sales management and

incentive system.

Integration of digital customer care in sales strategy

Customer behavior and the needs of customers have changed through the use of internet and

social media. Customers use all available channels for their purchasing decisions and find out

about the experiences of other purchasers.

Therefore, the expectations for the product and the quality of sales have risen. The customer

wants to be involved and treated as an equal partner.3

As well as the fact that sales should be accessible 24/7 for the concerns of customers today,

companies should implement an intensive care of rating platforms and social networks.

In addition to the simplified customer acquisition and support through the availability of

product-related information, such as the description of solving problems in the network, the own

weaknesses in customer care become more transparent. These evaluations should be used and

managed professionally.

Frequently, personal visits by a sales person have been replaced by web chats and meetings.

This enables a flexible location and time independent customer care, resulting in retrenchments

in travel expenses. However, not all customer contacts should be replaced by digital

communication.

Depending on the product characteristics and the nature of trade, relations must be chosen with

an optimum level of personal customer relationship. In most cases, technical devices and

software systems have a large need for explanation. A complete cessation of personal

counseling for explanation-intensive or advisory products – such as medical, technical products

– would then adversely affect long-term customer loyalty.


Set up customized customer support during the customer journey

The use of digital sales tools and the use of data analysis is revolutionizing the interaction of

sales with the customer. With the implementation of CRM systems as well as the analysis and

use of available data, including the information that is provided by the connection of available

products (Internet of Things), individualized and fact-based customer service and the design of

customized solutions are already possible. In addition, personalized product recommendations

for exploiting the UP and cross-selling potential can also contribute.

The distribution must also enable a holistic customer experience and strive for consistency

across all customer touch points. To identify possible media breaks and optimize weaknesses,

companies must adapt their activities to the customer journey.2

Automotive manufacturers such as VW make it possible for customers to directly agree to an

appointment for a test drive at a local dealer via Facebook after using a Facebook application to

create their own personal dream car.

Thus, the vision of the entire customer life cycle is essential for a successful customer care and

must also be an integral part of the sales strategy.

Select sales channels deliberately and use them synergetically

Over time, the number of available distribution channels that are available to manufacturers has

increased. This sales channel strategy should be adapted to the "Customer Journey" of the target

groups.

In addition, in many markets, social media is becoming more important, as customers rely more

and more on product experiences and recommendations from their network. So, the sales can

be promoted by linking the online stores with social networks. Often, a direct integration of

online stores within social networks, like Facebook, make sense. Eventim as the Europe's largest

ticketing service makes it possible to purchase tickets directly on Facebook.

The attractiveness of digital distribution channels is also

encouraged by the increasing use of mobile devices, such as

smartphones and tablets, where there is an access to social

networks, online stores, or product information on demand

and in any situation at anytime and anywhere. At the same

time, the customer journey is becoming complex and includes more information and buying

channels.


Use digital possibilities in stationary distribution

In stationary sales, the opportunities of "digital merchandising" offer a new shopping experience

for the customer. It is possible to generate competitive advantages in offline sales by an

individualized customer presentation, using online product presentation and the benefits of

augmented reality. In addition, the development of Virtual Stores for customers can be

considered as a revolution of the point of sales.

In 2011, Tesco has opened virtual supermarket shelves in subways and bus stops in South Korea

that linked offline channels with online channels. The waiting time can be used for a grocery

shopping via app. The products are then delivered by express delivery all the way to the

customer’s home. 4

Thanks to Tesco’s virtual open shops at subway stations, pedestrians can make good use

of their waiting time. (Source: businesstoday.de, 2015)

Furthermore, Nespresso wants to exploit the opportunities of digitalization in stationary

distribution, and has recently opened an "automatic boutique" in Munich. This "Nespresso Cube"

provides a shop that is operated exclusively by robots.5

Gain digital competencies at an early stage

Specifically, digitalization has not only an increased number of available distribution channels

and partners, but enables financially and technically more and more manufacturers to exploit

direct sales.


In many industries, this leads to a strategic dilemma. While the existing traditional partners in

wholesale and/ or retail are often not very strong in the online environment, one cannot waive

them, because of their overall significance for conversion.

As a result, important digital competencies are often not acquired, or only at a later stage. New

online players build on supplier relationships to companies that are less dependent on

traditional sales channels. Furthermore, they offer private labels, which they let produce by

contract manufacturing. At the same time, many manufacturers hesitate to build an online direct

sales channel.

In most industries, companies are now working consistently on the establishment and

development of a multi-channel sales system.

Easy switch between the sales channels

It is important in the selection and management of sales channels that an uncomplicated

switching between digital and analogue information and sales channels is ensured. The aim is to

enable a consistent "total customer experience". However, today many companies do not (yet)

succeed in providing such an experience.

Thus, in most companies, there is no optimal networking of traditional and digital sales channels.

This not only leads to a loss of potential customers and sales, but also to a constricted risk of

cannibalization of the individual distribution channels among themselves. 6

To solve the conflict between High Tech (use of technology) and High Touch (dealing with people),

companies are forced to build an integrated omni-channel sales system, which acts starting from

the customer and their needs and designes the sales channels to be permeable and

interconnected.

In addition, companies need to develop a global performance-based condition system for a

multi-channel sales system, in order to avoid uncontrollable cross-references that could exploit

price differences that are significantly facilitated through online trading.

Exploit the opportunities of digitalisation

It is precisely this complexity that requires a consistent and

unconditional reflection of the digital levers of a sales strategy.

The aim is to exploit the opportunities of digitalization in sales

and to avoid their risks.


Current developments require also changes in the sales organization, management, and culture.

In addition, digitalization revolutionizes available sales tools for the sales staff. These

relationships are illustrated in three other white papers, that we will gladly provide you.


Recommendations for sales strategy:

• Establish a slender customer segmentation and use digital data for individual processing

of individual customer segments.

• Take advantage of the increasing transparency in the competitive environment and

learn about your competitors. Be aware of the emergence of new (online) competitors

and business models and develop a strategic approach to new participants.

• Generate competitive advantages through professional use of CRM systems, social

networks, and Big Data.

• Use digital communication tools and get your information in advance for an individual

and flexible customer service.

• Create a holistic customer experience and allow consistency across all customer touch

points.


REFERENCES

1. http://www.enzyklo.de/Begriff/Digitalisierung (Retrieved on 31.03.2017)

2. Binckebank, L. & Elste, R. (2016). Digitalisierung im Vertrieb. Wiesbaden: Springer Verlag

3. Zoltners, A., Sinha, P. & Lorimer, S. (2016). How more accessible information is forcing B2B sales to

adapt. https://hbr.org/2016/01/how-more-accessible-information-is-forcing-b2b-sales-to-adapt

(Retrieved on 31.03.2017)

4. Meurville, M, Pham, K. & Trine, C. (2015). Shop on the Go-This case study looks at how Tesco "virtually"

created a new market based on a country's lifestyle. http://www.businesstoday.in/magazine/lbs-case-

study/case-study-tesco-virtually-created-new-market-based-on-country-lifestyle/story/214998.html


5. App, U. (2015). Nepresso bringt „Automaten-Boutique nach

Deutschland“ http://www.wuv.de/marketing/nespresso_bringt_automaten_boutique_nach_deutschland


http://www.enzyklo.de/Begriff/Digitalisierung

https://hbr.org/2016/01/how-more-accessible-information-is-forcing-b2b-sales-to-adapt

http://www.businesstoday.in/magazine/lbs-case-study/case-study-tesco-virtually-created-new-market-based-on-country-lifestyle/story/214998.html

http://www.businesstoday.in/magazine/lbs-case-study/case-study-tesco-virtually-created-new-market-based-on-country-lifestyle/story/214998.html


DVSB – the sales experts

As a leading management consultancy for sales, we advise our customers across all sectors

throughout Europe. In doing so, we support up to the implementation of concepts and strategies.

Here, our consultants combine analytical and strategic thinking with a deep understanding of the

immensely important human component in sales as well as innovative spirit and latest consulting

methods.

We advocate a sustainable consulting approach.

That is why we develop results that can be implemented immediately. We systematically involve the

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and cheaply by way of prototyping. This ensures acceptance and success stories already in the run-

up to the rollout. In this way, we support our customers until the goal is achieved – sustainably.

DVSB Consulting GmbH

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Germany

www.d-v-s-b.com


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