Digital transformation has been a part of distributors’ language for many years. But the speed of transformation has varied: It’s hard, takes significant resources and in some instances, hasn’t been spurred by overwhelming customer demand.
COVID-19 has changed all that. The pandemic and its impacts on operations has affected everyone. Yet, the companies that have embraced digital have weathered the storm better than those that have not.
B2B Digital Strategy: From Discretionary to Priority
Boston Consulting Group recently published an article stating that “Digital transformation has been discretionary and self-paced. Now it must be an urgent priority.” In fact, many distributors are now realizing they must be a digital-first company.
What does that mean? Digital-first goes beyond simply researching, selecting and transacting products online. Consider this: Out of necessity, distributors are not interacting much with customers face-to-face. Counter service is now doing curbside pickup. Sales teams are using the phone and web conferencing tools. Prospecting for new customers has changed as well, leaning more toward digital marketing tools than to stopping by unannounced.
Every distributor and manufacturer I have spoken with in recent weeks has opinions about what the “new normal” will look like. One thing they can all agree on? Businesses that survive, and even thrive, will evolve and put digital at the forefront of their operation.
For distributors, a new customer persona is likely to materialize. In almost every instance, distributors have had to adapt – quickly – to develop new services and/or deliver them differently, and update delivery/pickup options in response to the pandemic. Knowing which of those services will remain and how to evolve in the coming months will be critical.
How to Build a Strong Digital Strategy
To create an effective digital strategy, you need a clear understanding of how customers are changing, leading to a better understanding what products and services are needed in today’s market.
Foundations for building an effective digital strategy include: the voice of the customer, customer segmentation and value proposition.
Understand What Customers Want
Understanding the voice of the customer is critical for every distributor to identify changing needs and expectations. Essentially, it’s about learning how your customers want to shop and buy from your business.
The events of the past few months may have drastically changed your customers’ needs and expectations. You may think you know what your customers want. But a voice of the customer survey from December 2019 may already be slightly out of date, as some customer expectations or needs may have shifted since then. For example, customers that haven’t historically asked to shop, buy and transact with you online may have suddenly been forced to do just that. Abruptly, online chat and the ability to access order history online have become critical to their operations.
Customer needs and expectations can change very quickly. Prioritizing a digital-first approach can help improve the customer experience, especially during a crisis.
Get a closer look with customer segmentation
Segmenting and micro-segmenting customers is one way to identify opportunities when markets are changing rapidly. A common misstep is focusing only on the biggest and best accounts. These are often only the tip of the iceberg when it comes to your customer base.
Instead, drill down into your mid-sized accounts and see what opportunities exist. Look for sweet spots among your current segments, and see how you can segment even further. Your inside sales team can help by exploring business opportunities in these accounts, which previously may have been too small for field sales to focus on. These days, your most important customers may actually be hiding in plain sight within your smaller accounts.
Update your value proposition for today’s markets
Now is the time to update your value proposition. Knowing that customer expectations have changed, it’s quite probable that a value proposition may need to be updated as a result of this, too. That’s because, if customer expectations change, then your value in terms of customer-oriented solutions has probably changed.
A value proposition isn’t a set-it-and-forget-it opportunity. It’s work done on the back-end that distributors must continually reassess. It goes beyond what customers have in their cart and gets to the heart of what they really need. The most successful opportunities are those where the distributor can understand who the customer is and what their priorities are. When you can blend that customer intimacy with the benefits of an online transaction and support center, that’s when nirvana hits.
Here is a video that talks more about value propositions and why they matter.
Get in touch with us to learn more about creating a digital-first strategy.