If a $100 million distributor increases margins by just one-tenth of a point, it will gain an additional $100,000 per year. For distributors valued at $1 billion, the same increase equates to an extra $1 million annually.
Such a slight increase may seem simple enough, but it’s probably no secret that improving margins is tricky. You can’t raise prices without justification, or you risk losing customers. Today’s saturated market makes it easy for buyers to shop for a comparable supplier with lower costs. Not to mention, higher prices don’t always equate to higher margins.
Instead, consider your margins through the lens of customer experience. When you offer better service and a more consultative experience, you can justify price increases, improve unit sales per rep, and ultimately drive profitability.
To provide a truly robust customer journey, however, you need the help of artificial intelligence (AI).
4 Ways AI Improves the Customer Experience
AI-powered software has revolutionized the way reps interact with their customers, enabling them to provide more personalized and efficient service. Below, learn four ways AI enhances the customer experience.
1. Offers a Consultative Experience
AI can enable sales reps to have a deeper understanding of each customer, their buying behaviors, and reorder needs — benefiting customers by providing a truly consultative experience.
For example, some distributors leverage AI to guide reps to meaningful customer conversations: AI can surface customers’ potential needs to give reps a talk track for their call or visit. Are they due to order some products? Are they underspending in a certain category?
Then, once the rep is on the phone or visiting the customer, they can see specific AI-generated upsell and cross-sell recommendations from their computer or mobile device tailored to that customer. These product suggestions are based on years of historical data, item pairings, and products frequently purchased together.
Additionally, AI-powered semantic search crawls every single document a distributor has. So, if a rep is asked a specific question about one of the millions of SKUs in the distributor’s catalog, it’s easy to find the answer. Reps can use semantic search to find information related to that product and offer a solution on the fly.
When your sales reps understand their customers’ needs and know which items to offer them — from a consolidated dashboard — they can add value at every step.
2. Anticipates Customers’ Needs
Some distributors leverage AI to enable proactive outreach. By analyzing all the customer’s transactional data over time, AI can anticipate customers’ needs and prompt sales reps to reach out. This allows reps to make helpful, proactive product suggestions before their customers even realize they need something.
Suggestions can include:
- Reorder reminders
- Upsell and cross-sell recommendations
- New product categories customers might not be aware the distributor carries
No matter the specifics of the suggestion, making proactive recommendations signals to customers you’re on top of their account and leaves them with a positive impression. With the unique personalization that AI can bring, your customers will feel like you actually know them.
AI can also highlight categories where customers are underspending. Chances are, if a customer is underspending in your “personal protection equipment” category, they’re buying it elsewhere, possibly not knowing you offer that line of products.
Having this insight helps reps anticipate the product categories a customer should be buying so that they consolidate their orders to a few distributors instead of shopping around from dozens. This improves the customer experience, as customers won’t have to worry about keeping track of orders and can focus on their work.
3. Allows for a Seamless Omnichannel Experience
Global management consulting firm McKinsey & Company recently found that “all B2B customers prefer omnichannel, no matter their industry, country, size or customer relationship stage.” In fact, they’re willing to switch to a different supplier if it means gaining a better omnichannel experience.
By connecting business systems such as ERP, CRM and ecommerce, and storing the data in a centralized location, you can give customers an omnichannel experience.
With omnichannel, customers will have the same experience across every channel and touchpoint. For example, if they browse your online catalog and save an item to their wish list, their assigned rep will see it and know to mention it during their next conversation. This visibility allows reps to “wow” customers and streamline their shopping journey.
AI helps distributors optimize the omnichannel experience from the supply chain to customer service by enabling personalized recommendations, price optimization and more. AI recognizes patterns in the data to help organizations deliver an outstanding customer experience.
4. Provides Personalized Product Recommendations
In addition to providing upsell and cross-sell product suggestions, using an AI-powered tool can also provide personalized product recommendations to customers as they browse your website.
Think back to the last time you went shopping online. You probably saw sections on the website labeled “Other Customers Bought” or “You May Also Like.” These product suggestions are powered by artificial intelligence and use your browsing patterns and purchase history to generate personalized recommendations.
You can employ the same strategy in B2B. In fact, with the rapidly changing B2B buyer expectations, you probably need to. Gartner reports: “B2B buyers spend only 17% of the total purchase journey with sales reps. 44% of millennials prefer no sales rep interaction at all in a B2B setting.”
They also want the same personalized experience they get when shopping for shoes or vacations. Giving a personalized experience also makes good business sense: McKinsey found “companies that personalize marketing and sales more closely to the individual customers are more likely to have gained market share.”
With the magic of AI, you can eliminate the need for manual product pairing. By analyzing your transactional history and product descriptions, AI automatically learns which items pair well together or are usually purchased together. AI then uses that knowledge and the customer’s information to make personalized product suggestions when a customer visits your site.
Improve Your Margins by Improving the Customer Experience
Redefining your value proposition through the lens of customer experience can be a powerful way to improve margins. By leveraging the power of AI, you can add value to every step of the customer journey and ultimately drive profitability.
AI is a technology that improves exponentially, meaning the longer you wait to incorporate it into your customer experience, the less you’ll reap its rewards. Take advantage of its continuously evolving capabilities now and witness the transformation it brings to your customer experience.