Jonathan Crane: The digitalisation of the commercial function has been well developed for some years, but we are seeing an acceleration of this. Stakeholders in industrial and B2B companies are starting to expect the same experience as they do in a B2C context in terms of marketing, use of data, etc. This provides a significant opportunity for B2B companies.
Simon Andersen: This is already happening. More than two thirds of the buying journey in B2B is now digital, and in a 2019 study from McKinsey, two thirds of B2B customers say they are happy to transact online.
Like B2C, the technology for B2B has improved significantly. It is possible to communicate via channels such as the company website, Google, and LinkedIn, as well as to personalise communications to relevant buyers whether you are selling a pump to a building contractor or a pair of glasses to a consumer. Buyers’ own consumer experiences shape their expectations; they increasingly expect the companies they buy from to know and understand them, and they can now be influenced across multiple channels.
B2B and B2C have many similarities. When done well, B2B companies can use their data just like B2C to improve how they price and sell products, use tools to identify and influence customers online, run effective CRM programmes and allow customers to make purchases online.
SA: The most fundamental difference for the commercial function in B2B is that there are many more decision makers to influence on the customer side, ranging from the CEO, the technical team and the end user. This, in short, explains why B2B has been behind B2C, and at the same time it explains why this is an opportunity.
In addition, the go-to marketing channels are very different (LinkedIn and trade fairs versus Snapchat and Facebook), marketing content is different (text and practical applications versus appealing photography and video), and key systems vary (Salesforce Sales cloud versus Google Analytics).
SA: A great example in our portfolio is Formel D, a global quality service provider to the automotive sector. The company is digitalising its commercial function, which means it is within reach of a truly personalised sales and marketing effort.
The company has not achieved this by chance. It took small, gradual steps and accelerated its efforts by upgrading its CRM tools four years ago. Since then, Formel D has been able to use data to optimise its customer service and support its sales teams in prioritising which customers to meet and what products to sell, resulting in an increase in sales. Soon, AI and marketing technology will help sales and marketing work more closely together for each customer (as in account-based marketing), make better decisions and reach customers with more relevant information.
The impact of digitalising the commercial function is very tangible, and it often results in a 5-10% increase in revenue and reduces costs at the same time.
JC: As an investor in industrial companies, we focus on identifying digital opportunities that we can help our companies implement. The basis for creating value is data availability, active use of an up-to-date CRM tool and a team that is enabled to use this data. This can then lead to significant improvements in pricing and sales team effectiveness. We often see that some of the most sophisticated companies will then take steps to automate their customer touchpoints and use digital marketing and CRM data to drive new leads.
For this to be successful there are four actions that need to be taken: think about the customer journey and map your stakeholder and content needs; personalise content; integrate sales and marketing; and embrace digital channels. This exercise needs to be driven by the sales and marketing teams. It might need a little help from external consultants but it is essential that it is driven in collaboration between sales and marketing. And likely the best piece of advice is just to get started, do a few trials and then adapt the approach.