Transformation

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5 Ways Digital is Reinventing B2B Selling

From driving demand to enabling sales, new tech solutions make buying easier for business customers.

We’re now several decades into the digital age and yet transformation is still profoundly changing how we work. Until recently, the most disruptive elements have been those that empower consumers, giving rise to entirely new brands and industries like Airbnb, Uber and Spotify. B2B sales organizations–and most B2B sellers–have been several steps removed from the biggest changes. Certainly, B2B companies have deployed digital technologies to enhance business performance. But, in B2B industries such as medical devices, insurance, agriculture and business software, disruption has been less evident.

That’s changing fast, as smart B2B companies race to rethink their selling strategies. Access to data, information and channel alternatives has arrived in B2B and it’s changing the selling landscape. Intermediaries– hospitals, farm cooperatives and brokers, for example–no longer have a monopoly on data. The ability to collect customer data, store it centrally via the cloud and migrate it with orchestration across platforms is quickly breaking down legacy system silos. Data aggregators are emerging, providing a more complete view of the customer. For the first time, end-to-end customer data is a reality in B2B.

The impact of these relatively new changes is transformational. The most evolved B2B companies are reinventing the way they sell and finding ways to increase growth dramatically. But many B2B companies are still struggling to find the best path to modernize selling to accelerate growth.

The Five Digital Shifts Impacting B2B Selling

At Prophet, we see the impact of digital in B2B selling in five selling shifts:

  1. Digital sales enablement
  2. Digital outsourcing
  3. Digital relationship development
  4. Data-driven solutions
  5. Digital demand generation

We’re working with clients to tap into each of these shifts more effectively, leveraging these future-proofing strategies to achieve uncommon growth:

  1. Digital Sales Enablement:

This is the shift where many B2B companies have already made substantial progress by using digital tools and data to enable sellers to become more effective. Sales enablement tools, including Salesforce, Oracle and SAP are so well embedded that they are expected to be a $5 billion market within three years[1]. These platforms, networks and apps help individual salespeople achieve more and help sales teams work more effectively.

In the past few years, these platforms have shifted from customer relationship management to helping customer teams more fully engage the entire customer decision-making team. The advantages are immediate: Better equipped and coordinated salespeople accomplish more. They increase revenues, strengthen customer relationships and stay with companies longer.

  1. Digital Outsourcing:

Companies are shifting more of selling’s routine chores to digital functions because studies of sales time utilization indicate two-thirds of a typical sales person’s day is spent on non-selling tasks[2]. Outsourcing frees-up sellers to focus on what they do best: building and expanding human relationships.

Many early efforts included more precise targeting, better sales resource planning and automating routine order-taking functions. More advanced B2B companies are also successfully making it easy to order spare parts or accessories online and handling problem resolution with advanced AI bots and call centers. These new tools make freeing up the sales persons’ time to develop relationships while increasing team efficiency and effectiveness through improved resource deployment.

  1. Deepening Relationships:

The combination of new, more targeted vehicles such as LinkedIn advertising to reach B2B decision-makers with compelling content like video and virtual reality has opened up a shift called account-based marketing (ABM).

ABM is more personalized and tailored to the needs and criteria of individual decision-makers than traditional push email and digital advertising campaigns. It is also an integrated effort that coordinates the use of salesperson interaction and digital engagement for maximum impact and efficiency. The digital components also extend engagement into an anytime, anywhere experience through the 24/7 advantages of online and mobile vehicles.

“While the full impact of digital transformation on the sales process is still evolving, it’s clear that the classical model–where marketing and communications generated interest while the sales team closed the deal and expanded relationships–is dead.”

  1. Data-Driven Solutions:

Oceans of data flooding the B2B value chain are shifting what sellers sell as well as how they sell. As suppliers gain greater access to data about their customers–and their customers’ customers–they have expanded the playing field for moving from selling products and services to providing data-driven solutions.

Infused with analytics and insights, solution-sellers can more readily mix the elements of the customer value proposition including pricing, value realization, value-added services, experiences and core offer innovation to suit the customers’ particular needs. In a data-driven world, they are better able to extend solutions into partnerships with other providers and make them interoperable with the customers’ systems and the ecosystem of the industry. These strategic decisions are also blurring the lines between sales, R&D, marketing and operations and demanding better leadership and teaming behaviors from sales team members and other functions.

  1. Demand generation:

This may be one of the most exciting and rapidly evolving areas of B2B selling, particularly in intermediated businesses. The explosion of data and a rapidly expanding set of vehicles to reach B2B decision-makers among the customers’ customer is making it possible to create direct relationships with them. These channel and content alternatives are enabling established sellers to generate demand in three principal ways:

  1. Bypassing the intermediary to sell directly
  2. Generating sales pull through the intermediary
  3. Hybrids of 1 and 2 where smaller size customers or certain offerings go direct, and larger size customers or parts of the portfolio are sold via intermediaries.

The Organization Imperative

All five of these B2B selling shifts spark the need to rethink the organization, redefine the roles of sales, marketing, e-commerce, data analysis and customer research and build new, often agile ways, for these teams to work together. It also requires rethinking the digital stack of how platforms and data work together in a way that can support the shifts and adapt to future changes.

Generally, we see a blurring of the roles of sales and marketing as digital investments that were previously the domain of communication-oriented marketers are redeployed to accelerate selling momentum. While the full impact of digital transformation on the sales process is still evolving, it’s clear that the classical model–where marketing and communications generated interest while the sales team closed the deal and expanded relationships–is dead.

And while we realize that B2B selling in many companies may never be fully automated, it’s essential to acknowledge how much digital can do to make it more efficient, not just more effective. Research consistently shows that the top 20 percent of a sales team is truly productive, while the bottom half often has a neutral or even negative impact on revenue growth. Hiring and training humans gets more expensive all the time, while the cost of using digital tools to find, target, serve and support customers in routine areas is plummeting.

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[1] Jim Lundy, Lead Analyst, Aragon Research, 2017 “Aragon expects the worldwide sales engagement platform market to grow from U.S. $1.57 billion in 2017 to $5.59 billion by 2023.”

[2] Salesforce.com, Top Productivity Trends, Salesforce Blog, 2019

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We don’t expect many B2B companies to be able to modernize selling without bumps and hiccups. The key to tackling these bumps is to think through the shifts and build momentum while in parallel developing and enhancing the organization’s capabilities to handle these shifts.

Our marketing and sales consulting practice helps B2B companies around the world overcome disruption and identify paths to achieving uncommon growth. Contact us to learn how we can help you.

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The Next Chapter of Digital Transformation in China

In China’s ecosystem, transformations are changing as we enter the ‘second half’ of the digital revolution.

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Now in its fifth year, Altimeter‘s annual “State of Digital Transformation” research continues to document the constantly evolving enterprise. As disruptive technologies and their impact on organizations and markets continue to progress, our research aims to capture the shifts and trends that are shaping modern digital transformation.

Our global study revealed insightful differences between businesses operating in China, and those in the rest of the world, on how they think of and approach digital transformations.

In China’s distinct and fast evolving landscape, digital transformation is even more important.

In the past few years, the tech giants BAT (Baidu, Alibaba, Tencent), JD and some of our most recent tech unicorns including Didi Chuxing, ByteDance (TikTok and Toutiao), RED and Meituan Dianping among others, have led the first wave of digital transformation. Now, we are entering the ‘second half’ of the digital revolution, where more traditional businesses are transforming themselves to become more digitally-led to compete and thrive.

  • Over the past decade, China’s growth and technology transformation has been led and fueled by BAT (Baidu, Alibaba, Tencent). We are now entering the next chapter of digital transformation where businesses and brands must adapt and lead their own digital transformation to compete and thrive.
  • In China’s unique digital ecosystem, almost all companies are undergoing digital transformations. Compared to other countries in the world, Chinese enterprises embrace digital transformation in a more proactive way—with CEOs playing a bigger role in leading the effort. Additionally, companies in China prioritize consumer-facing touchpoints, such as customer experience and e-commerce, to a significantly higher degree in their digital transformation.
  • It is worth noting that having a strong organizational culture is instrumental to sustainable growth. However, companies in China are overwhelmingly more concerned with ROI than internal initiatives like organizational structure and employee engagement. While driving a customer-centric growth is a competitive advantage for companies operating in China, internal organization, way of working and company culture are also essential enablers for tapping into the Body, the Mind, and the Soul of the organization.

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Driving Uncommon Growth for Digital Native Brands

As these once-disruptive brands hit speed bumps, sharper omnichannel thinking can recapture growth.

As successful early-stage founders and investors would agree, building with a product-market fit focus is one of the top priorities in launching a company (perhaps second only to raising capital to enable the prior). Once a company has reached organic growth and reach with a product-market mindset, the priorities need to quickly shift towards strategic growth and scale.

As the digital marketplace continues to become further saturated and competition has become too numerous to name, we are helping digital-native brands focus on a few strategic objectives to help them reach uncommon growth.

6 Strategic Objectives to Help Digital Native Brands Reach Uncommon Growth

1. Build an irreplaceable, valuable brand

The digital marketplace is now an unbelievably crowded space packed with digital natives as well as droves of large consumer product brands investing in direct-to-consumer initiatives. (According to a recent Salesforce study, “despite all the criticism CPG companies receive in regard to their retail and commerce strategies, at least 99% say they’re investing in direct-to-consumer strategies.”) With such a competitive marketplace all vying for much of the same customers, the value of a meaningful brand is higher than ever.

For many digital natives, growth curves flatten quickly before they can truly build an enduringly valuable brand position. But for those that have a relevant story to tell with their brands (Dollar Shave Club, Everlane, Airbnb), strategic growth comes in the form of growth-stage capital, acquisition exits and IPOs. For traditional CPG companies and the financial market, effectiveness and success in brand building and amplification have become a clear differentiating growth indicator for targeting digital-native brands for inorganic growth.

2. Create a strategic customer targeting strategy to posture for growth

Customer acquisition is VERY difficult at the growth stage for most organizations. It takes additional capital and sophisticated growth techniques for digital-native start-ups to achieve scale without burning through profits. The question we most often hear from our growth-stage,  digital-native clients is, “Now that we have figured out our initial entry market, how do we grow with new, unidentified targets and geographies?”

The first step is in taking a comprehensive look at the market landscape and executing market and customer segmentation mapped to the company’s value proposition. The strategy will be followed with a cohesive roadmap with savvy demand gen and acquisition techniques. However, this poses a chicken/egg dilemma. Many will say that they need strategic capital in order to reach these new customers. But it is very difficult to raise that capital unless you have a strategic plan in place. We’ve found that completing an expeditious, yet effective, customer targeting strategy provides investors a plan they can buy off on, which forms the basis for an immediate plan of action once the capital comes through.

3. Take customer data to the next level 

Digital native brands are rich in data. However, we often find the abundance of data untapped and under-utilized in driving strategies and operational execution. Sophistication comes from not solely basing strategies on historical data, but driving current data into actionable insights that drive the execution of the product and user experience (most often through machine learning).

“Despite all the criticism CPG companies receive in regard to their retail and commerce strategies, at least 99% say they’re investing in direct-to-consumer strategies.”

Customer expectations are driving companies to think about next-gen data strategies. It’s not just about the tools and technology used to access and manage data; It’s the deeply human insights to understand and implement behavioral data-driven retention and acquisition strategies. Journeying through the landmines of data value exchange, ethics in AI and overall customer data privacy become even higher stakes with global expansion.

4. URL to IRL. Getting physical with the brand experience

With the rising cost of digital customer acquisition, many successful growth-stage digital-native brands are finding growth in brand awareness and customer acquisition with offerings in a physical retail experience (Warby Parker, Casper). However, going physical without considering the customer journey with a brand will often come up short.

It is critical to have a customer-centric approach in understanding and meeting the customer’s journey with the brand toggling in the metaverse of both digital and physical.

5. Expanding with a brand portfolio

Perhaps the market assessment tells you that an unserved market will require a different brand identity or positioning. Too many razor options for facial-hair growing men? Grooming products and supplies? Razors for women? Will the master brand be sufficient or stretched too thin? Should there be a sub-brand to capture additional opportunities among adjacent consumer segments?

Prophet vice-chairman and master brand guru, David Aaker, writes about innovating with new brand subcategories in his book coming in 2020 titled, “Achieving Uncommon Growth in the Digital Age: Own Game-Changing Market Niches.” In it, he’ll discuss how game-changing market niches create growth, how digital drives and enables new market niches to win, and how to find, evaluate, manage and build barriers around these game-changing market niches.

6. Growing together with your employees and brand advocates

In reaching out to new targets and markets, it’s easy to lose sight of the early-stage magic that created traction with customers and employees in the first place. Accelerating the speed and scale of growth without alienating the core consumer group takes extra care and caution in brand management disciplines.

The often unforeseen challenge in strategic growth is in paving the way for organizational growth – keeping the best talent, training existing talent for skills required for the next generation of growth, and luring new talent to fill resource gaps and needs. With a competitive market, it’s more than free food perks at this stage. Start-up culture is part of the secret sauce – so how do you grow without losing sight of the most important ingredient of success – employee culture?

Due to the nature of the start-up hustle, most digital-native companies have not prioritized professional development support and are not the best positioned at cultivating talent. Where speed to market is a constant drumbeat, work-life balance and communication are often weak. And as the fight for talent increases, companies need to rethink team growth. Another clear differentiating growth indicator is how companies are leveraging employee/team optimization to help with growth.

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In the post-digital-revolution age where businesses are pervasively disrupted – entry barriers to earning the “first pots of gold” are ever low, while driving toward the second, third pots of gold, and achieving enduring growth is extremely challenging. Moving from organic growth focused purely on a mind-blowingly-great product or service to making strategic choices based on an understanding of their unique brand, customer and employee culture is a necessary path to achieve 2.0 and 3.0.

If your digital native brand is ready to determine its path to uncommon growth, let’s set up a time to discuss. Our team of strategic consultants is ready to help you chart the course.

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The Next Chapter of Digital Transformation in China

Our research finds that in China, change efforts are more likely to be customer-focused and led by CEOs.

How to Unlock Uncommon Growth in the New Digital Era

Digital transformation is one of the most closely followed topics in the world today. And in China’s distinct and fast evolving landscape, digital transformation is even more important. In the past few years, the tech giants BAT (Baidu, Alibaba, Tencent), JD and some of our most recent tech unicorns including Didi Chuxing, ByteDance (TikTok and Toutiao), RED and Meituan Dianping among others, have led the first wave of digital transformation. Now, we are entering the ‘second half’ of the digital revolution, where more traditional businesses are transforming themselves to become more digitally-led to compete and thrive.

Prophet’s digital research arm, Altimeter, recently published The 2018-2019 State of Digital Transformation report, aiming to capture the shifts and trends that are shaping modern digital transformation, globally and in China. We surveyed 554 digital strategists, C-suite and other executive-level leaders from organizations with at least 1,000 employees, across three geographies: North America (US and Canada), Europe (UK, France and Germany) and China. Our global study revealed insightful differences between businesses operating in China, and those in the rest of the world, on how they think of and approach digital transformations.

Altimeter identified ‘The Six Stages of Digital Transformation’ to help companies understand where they are — and where they need to be — on the road to digital transformation

In this article, we will discuss some of our observations and findings as well as implications on how to drive digital transformation and unlock uncommon growth in China.

Digital transformation is no longer an option, but an enterprise-wide initiative that is increasingly led by the CEO.

Our study demonstrates that almost all companies around the world, and even more so in China, are undergoing some sort of digital transformation. Digital transformation is no longer an option but a crucial component in any business growth strategy. In China, 89% of the companies interviewed are undertaking cross-disciplinary and enterprise-wide digital transformation, higher than the rest of the world.

Q: Is your organization undergoing a formal digital transformation effort in 2018?

In the past, it’s oftentimes the CIO/CTO that leads digital transformation initiatives. Nowadays, they are increasingly led from the top. 42% of the companies in China said that their steering committee for digital transformation is led directly by the CEO, which is significantly higher than what we found in other countries (29% in rest of the word).

Q: Which role or group does the steering committee primarily report to?

Companies in China are ‘playing offense’, using digital transformation as a way to differentiate, drive revenue, enhance customer experiences and acquire new customers.

When we asked which departments are prioritized in their digital transformation efforts, Chinese companies compared to the rest of the world are far more focused on digital transformation in the space of marketing and customer experience (83% of digital transformation in China touch customer experience, 58% marketing, 75% e-commerce, compared to 32%, 40%, 23% respectively). China is also applying and directing digital transformation towards product and innovation, far ahead of the rest of the world.

However, Chinese companies seem to be putting less emphasis on its digital transformation behind internal efforts such as HR, employee and legal.

Q: You mentioned that your role directly supports the digital transformation of a specific business unit. Which business unit(s) do you support?

This orientation of digital transformation toward external factors over internal efforts is closely linked to China’s highly competitive digital ecosystem and dynamic market landscape. To serve rapidly changing consumers and respond to a fast-moving and innovative environment, businesses in China use digital to stay competitive. Every industry has to keep up and evolve – retail only exists as “new retail,” finance is simply fintech and manufacturing is all about IoT, robotics and AI-powered solutions.

For companies in China, digital transformation is all about ‘playing offense’ and driving a competitive edge. Digital transformation helps identify growth opportunities (62% in China versus 48% in rest of the word), it helps understand consumer behaviors and preferences (50%  versus 45%) and it helps respond to increased competition (45% versus 40%).

On average, global firms tend to use digital transformation as a means to drive operational efficiencies, whereas China tends to focus its digital effort to drive customer demand and experiences.

Q: What are the key drivers of digital transformation within your organization?

The drive for growth is clearly reflected in Chinese companies’ long-term priorities of digital transformation as well. When deep diving into the areas of focus for their transformation, one can clearly see how CX and customer data strategy dominate the agenda. While 62% of the firms in China are investing in IT and technology to better manage data, a third of companies in China are still finding their way to design new and improved customer experiences, to integrate better and make e-commerce more intuitive, to improve the agility of their operations.

It is worth noting that organization and internal transformation is relatively low in terms of priorities for many Chinese companies, compared to CX and other growth-centric efforts.

“For companies in China, digital transformation is all about ‘playing offense’ and driving a competitive edge.”

Q: Each of the following describes different types of digital transformation initiatives. Please indicate which initiatives are most important to your long-term digital transformation efforts. (Data shown above is from China respondents only)

As high as 74% of the Chinese companies interviewed are in the process of (28%) or have completed (46%) mapping out the customer journey.

BAT or the like of Didi have raised consumers’ expectations. Any consumers interacting with a brand and business expect fluidity, just in time, total personalization, and complete integration cross touch points and interactions.

Q: Which of the following best describes your company’s efforts around the customer journey/experience?

Companies in China see ROI and budget as bigger challenges than organization and culture.

As companies in China evaluate whether to increase investments in digital, they expressed concerns about the lack of data and ROI. In fact, 61% of companies in China expressed concerns over the lack of data and ROI, while only 34% shared concerns with budgeting. While external factors clearly motivate companies in China to transform digitally, they are less worried about internal facing ones compared to the rest of the world.

In other countries, a lack of clear vision (18%) and company culture (23%) pose major challenges for companies. Whereas in China, these numbers are substantially lower, at only 11% and 6% respectively. This again signals the confidence and determination of businesses in China to drive forward digital transformation despite internal obstacles. The top-down cultural norm in China and the fact that many employees are digital native and fluent as consumers, provide businesses a competitive advantage, being more intentional and more rapidly willing and ready to transform.

Executive Summary

  • Over the past decade, China’s growth and technology transformation has been led and fueled by BAT (Baidu, Alibaba, Tencent). We are now entering the next chapter of digital transformation where businesses and brands must adapt and lead their own digital transformation to compete and thrive.
  • In China’s unique digital ecosystem, almost all companies are undergoing digital transformations. Compared to other countries in the world, Chinese enterprises embrace digital transformation in a more proactive way—with CEOs playing a bigger role in leading the effort.  Additionally, companies in China prioritize consumer-facing touch points, such as customer experience and e-commerce, to a significantly higher degree in their digital transformation.
  • It is worth noting that having a strong organizational culture is instrumental to sustainable growth. However, companies in China are overwhelmingly more concerned with ROI than internal initiatives like organizational structure and employee engagement. While a driving customer-centric growth is a competitive advantage for companies operating in China, internal organization, way of working and company culture are also essential enablers for tapping into the Body, the Mind, and the Soul of the organization. Another global study by Prophet, Catalysts: The Cultural Levers of Digital Transformation, argues that organizational culture and the employee experience have a vital part to play in shaping progress. As a result, the human factors in digital transformation have grown in prominence.

We believe, in order for businesses to win with digital transformation, they must adopt four necessary shifts in mindset and way of working:

1. From being technology-focused to being customer-obsessed

Technology is a means, not an end. Investing heavily in IT or data systems is undoubtedly important. However, without deep understanding of your target audience, you are just doing digital for the sake of digital. Businesses must leverage digital approaches and strategies in a smart way to identify, understand and serve their customers in a more agile and profound way.

2. From tech-led sponsorship to multidisciplinary sponsorship

Digital transformation is instrumental to the future of any company, and how business will operate. CEOs must play a pivotal role in driving the transformation agenda forward.  The CEO must clarify the strategic roadmap, drive cross-disciplinary collaboration, coordinate resources, and encourage trial and error across the organization, to experiment, learn, to codify and ultimately scale up.

3. From investing in operations and touch points only to investing in people and culture

The growth of a business and brand is deeply rooted in its internal capabilities and the company culture. This is especially true in the digital age where a company’s organization, people and culture need to be more agile and adaptable. However wonderful the digital infrastructure or system is, the capability of the team (the mind), the mindsets (the soul), the new operating model (the body), anchored on a clear purpose (the bigger Why, the firm’s DNA), are what matter in delivering truly effective, winning digital transformation.

4. From regarding digital transformation as a cost center to keep up, to thinking transformative investments to achieve uncommon growth

Although digital transformation requires significant investment, the outcome will be extremely beneficial if successful. Instead of worrying about the cost, identify clear objectives and benchmarks to continuously measure ROI and impact on revenue growth and profitability, while adjusting investment accordingly. After all, digital transformation is not a ‘whether or not’ question, it is a must have, must do.

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FINAL THOUGHTS

Successful digital transformation means shifting focus from technology to customers and moving resources towards internal organization, employees, culture and measurement. As China’s digital ecosystem becomes increasingly sophisticated, on top of investing in consumer facing digital initiatives, companies must adopt the mindset to look inward—to their own organization, culture and work style—to find sustainable growth in an era of disruption.

Where does your company stand in digital transformation compared to other companies around the world? Click here to download the global report for more insights.

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Experience-Led Transformation: Where to Start & How to Measure Progress

There’s harmony and happiness in the “X frontier.” Here’s how to find it and make it work for your customers.

When Charles Dickens said, “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness,” he may have been comparing a typical customer journey map to an ideal state experience.

The Benefits of Experience-Led Transformation

Look around: the “big four” Amazon, Apple, Facebook and Google all achieved initial critical mass by providing singularly satisfying, consistently outstanding experiences.

The world’s top innovative companies of 2019, such as Meituan Dianping (handles virtually ANY type of booking and delivery in China), Grab (squeezed Uber out of Singapore and broadened into food, travel booking, financial services and now even health insurance service delivery), Stitch Fix (the radically data-driven personal styling at scale fashion business), or Sweetgreen (fast casual, farm to table restaurant chain empire) – are all built on the backs of consistently satisfying experiences, at scale.

These companies move far beyond optimizing customer experience (CX), they are reaching the new “X frontier” – creating a harmonious environment for employee experience (EX) and partner experience (PX) in their respective value chains.

Because of these disruptors, expectations for general experience delivery has been raised everywhere. Sixty-seven percent of customers say standards for good experiences are higher than they’ve ever been; 76 percent expect companies to understand what they need and meet their expectations; and 64 percent find customer experience to be more important than price when it comes to making a purchase. Clearly experience drives customer value creation and loyalty.

We know it pays off for businesses, big time. Experience-driven businesses report between 1.6x – 1.9x higher YoY financial value growth because of improved retention, repeat purchase rates, average order size, and as a result, higher customer lifetime value (CLV).

In a nutshell: the rules have been reset and expectations raised. Experience is critical to success and risk of inaction intensifies– so WHY are so many organizations STILL nowhere close to transforming their approach to experience?

Common Challenges of Transforming Experiences

Two of the biggest challenges we hear from executives are:

  1. CX is a systematic and daunting task that involves every single muscle of the organizational mind, body and soul. Where do I start?
  2. The payoff sounds nice in theory, but how do I know if we are making progress? How do I measure this?

Where to Start with Experience-Led Transformation

There is such a thing as CX maturity. Knowing where your organization is on the maturity curve will help you determine where to start and prioritize battles to fight now vs. later. There are six criteria that typically defines an organization’s CX maturity level:

  • Vision & Strategy: to what degree does the organization (from CEO to frontline) share a CX-centric vision and govern CX with a formal, top-down, enterprise-wide process?
  • People & Culture: to what degree does the focus on CX drive the formal and informal cultural rituals and processes; do CX dedicated teams, cross-functional integration, and on-demand access to formal training exist, and is consistently adopted?
  • Design & Deliver Experiences: to what degree does the organization translate the CX vision to detailed blueprints and use it to manage the day-to-day operations and understand the degree to which the delivery matches the designers’ intention and deliver on the specific customer needs?
  • Segments & Data: to what degree does the organization have clear alignment on the customer segment(s), their priorities, and integrate multiple sources of data to track the holistic customer experience across online and offline channels, and have a clear data integration, live dashboard reporting, socialization & governance process in place?
  • Analytics, Measurements & Continuous Improvements: to what degree does the organization utilize integrated data and advanced analytics to guide continuous decision making, investment prioritization, improvement process and pinpoint ROI?
  • Agile Management: to what degree is the CX management process dynamic, real-time, based on maximizing value capture and is tied to key individual incentives?

The Power of Organizational Alignment

Most organizations are at an “ad-hoc” state, characterized by having siloed functionality and lack of commitment to holistic CX training, no coherent governance process or CX aspirations, limited conceptual journey mapping that treats all customers alike, and reactionary insights meant to describe the past rather than prescribe future actions.

If your organization is at the “ad-hoc” state, aligning leadership on the vision of transforming CX and justifying the investment by creating a case for change is crucial – without leadership alignment and focus businesses prolong the vicious cycle and incur wasteful costs.

“These companies move far beyond optimizing customer experience (CX), they are reaching the new “X frontier” – creating a harmonious environment for employee experience (EX) and partner experience (PX) in their respective value chains.”

Once organizations achieve alignment, the next step prioritizes the most critical use cases (i.e. prioritizing CX investment, reducing churn) and identifies the things standing in the way from delivering against these use cases. Approaching CX in this way ensures that the transformation will have the greatest impact and more importantly allows for the creation of a targeted initiative pipeline to close the gap.

One of our financial service clients wanted to prioritize CX investments to maximize value, and quickly realized the organization achieved greater maturity for data integration and analytics.

They were drinking from the proverbial data fire hose and had the data scientists in place to analyze these disparate types of data; however, they lacked connection to the customer or the business to provide a data-driven way of prioritizing opportunities.

3-Pronged Approach to Transform Customer Experiences

To overcome these challenges, we engineered a three-pronged approach to help transform CX:

  1. Lead with the Customer: fine tuning the segmentation to lend more insights about customers, identifying needs and motivations of highest value customers
  2. Connect to Business Impact: making sure all analytics and data process is empowered and managed so that the results can tie to business impact
  3. Drive Data-Backed Decisions: pointed the insights gained through analytics toward specific business leaders and their KPIs to drive better/more informed decisions

These three areas were then translated into specific work streams with assigned owners from various functions of the organization to can start to create the first wave of quick wins for the CX transformation journey.

How to Track Your Transformation Progress

Once the transformation gets initiated, how do you know if progress is being made?

Big leaps in technology, data, process and governance will register on the maturity assessment itself in a year or two. For less significant improvements a finer odometer needs to be used more frequently – to demonstrate quick wins and proper momentum, testing and learning, or quick course correcting.

A best-in-class B2B CX measuring system includes four components, each with a distinct role to play:

  • Annual Customer Survey: provides a comprehensive view of customers on ongoing topics of interest – a mechanism to track progress over time. Offers an opportunity to test a greater variety of questions and stimuli, including new hypotheses from BU leaders and marketing teams. Typically, CX metrics included in the annual customer survey would include customer satisfaction, NPS, specific touchpoint assessments based on recent experience, and competitive benchmarking.
  • Transactional Survey: provides a more nimble and frequent view of the most critical leading and lagging indicators identified by internal leadership and the annual surveys – all to help drive short- to mid-term decision making. This might be in the form of a website pop up survey right after you finish a transaction and have that experience fresh to mind.
  • In-Depth Customer Research: provides an opportunity to conduct in-depth research (typically qualitative) on specific subjects based on acute or broader strategic questions. Helps generate new ideas and opportunities to track/test in the annual survey efforts. For instance, the sales are down this month in a specific region and leadership is wondering if there are CX mistakes they need to learn from – given the narrow concentration and timely manner of this issue, in depth qual is best chosen over a survey
  • Account Conversations: plays a vital role in identifying account-specific issues and insights through the relationship managers.

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FINAL THOUGHTS

In summary, the elevated importance and urgency of experience-led transformation is widely evidenced both by the success and demise of companies on the two ends of the spectrum. Knowing where to start, and how to measure progress might just help some get started on this crucial transformational journey.

Begin your experience transformation journey.

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The Evolved Healthcare Enterprise: An Intro to the Three Archetypes

Are you a transformer, an invader or creator? The answer can change your growth trajectory.

Recently, it was announced that Amazon will start marketing PillPack pharmacy services to Prime members, and healthcare is watching. Today’s digitally-native organizations are inherently more agile than their decades-old competitors. Companies that think about digital differently are focused on driving growth – not just implementing the latest technology.

Evolved Enterprises: Driving Uncommon Growth

Prophet characterizes these companies as evolved enterprises because they are committed to three fundamentals of our digital age to drive uncommon growth.  These companies are:

  • Customer experience-centric: No matter who their customers are, these companies understand they are in the business of experience and they design their business models explicitly to compete on experience and innovation.
  • Building exceptional brands: Because digital businesses are interactive by definition, customers must have positive associations with your brand, which requires a radically reimagined marketing machine.
  • Mastering demand-generating capabilities: From aligning and deploying the salesforce to be more effective, to designing and curating martech stacks that are relevant and timely, these organizations know how to be efficient and effective with customer interactions.
  • Unleashing the talent of their people: Empowered, autonomous teams at the help organizations operate at the speed of digital. They are fast, flexible and responsive. When grounded in a shared purpose, this freedom unleashes innovation, engages employees and attracts critical talent.

These characteristics have proven to hold true across industries, including healthcare. Many healthcare executives would argue that they are not only true, but most traditional healthcare organizations are lagging behind. Historically, this is largely because healthcare organizations have had a somewhat captured market.

When they were founded, operations were frequently the sole challenge. Whether it was labor-management of a health system, manufacturing and distributing products, underwriting a diverse portfolio of insurance plans, etc., simply getting the work done, was the key challenge. There was a need to be product or service-focused. Digital has changed that, and winning organizations today are customer experience focused (not just customer-focused).

The Three Main Archetypes of Healthcare Consumer-Centricity

In my colleagues Jeff Gourdji and Scott Davis’s latest book, Making the Healthcare Shift: The Transformation to Consumer-Centricity, we see a number of organizations showing promise on their transformation journey. These “transformers” are one archetype of the evolved healthcare enterprises. In the following blog series, we’ll explore the following archetypes of Evolved Healthcare Enterprises that are emerging across the healthcare ecosystem:

Transformers

As mentioned above, these are traditional healthcare organizations seeking to transform and adopt traits of modern Evolved Healthcare Enterprises. These are often companies that fit nicely in the payer, provider, and life sciences sectors Geisinger Health is a great example of a transformer. The Geisinger Medical Center was founded over 100 years ago, as your typical hospital. However, it’s experience-first initiatives such as money-back guarantees and other innovative consumer, clinical, and cost approaches make it an evolved healthcare enterprise in the transformer category.

Creators

These are organizations that start as evolved healthcare enterprises, typically in the last 20 years and are digitally native, and synonymous with start-ups. They sometimes fit within traditional healthcare categories, such as the health insurer, Oscar. Frequently they are creating new sub-categories such as Patients Like Me that provide patient peer groups, helping support each other as well as sharing and discussing a variety of treatment methods that aid in research. Or Exact Sciences and their product Cologuard brings lab testing into the convenience of people’s homes.

Invaders

These are proven evolved enterprises outside of the healthcare industry that are moving in, often grabbing headlines such as Amazon, Apple, and Google. And with good reason, Apple Health Records and its ability to enable more portability of patient medical records is helping to break down EMR silos as patients move through the larger healthcare system. Amazon is now making bonafide medical devices that are HIPAA-compliant. Their “invasion” is quite real and is gaining more momentum every day.

“Companies that think about digital differently are focused on driving growth – not just implementing the latest technology.”

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FINAL THOUGHTS

In the subsequent parts of this series, we will dive deeper into each of these archetypes. We will highlight the inherent strengths  as well as the disadvantages of each archetype. Regardless of whether you’re a transformer, creator, invader, or none of the above, this series will underscore the amount of change we’re seeing in healthcare today as well as the opportunity the healthcare industry has to unlock growth by by embracing the digital age. Change is here, and it’s coming from everywhere.

Learn more about the ever-changing aspects of impactful healthcare customer experiences.

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PODCAST

Healthcare Transformation: How Do We Get There?

On the Healthcare Rap podcast, Jeff Gourdji, co-author of the new book Making the Healthcare Shift, breaks down the 5 necessary shifts for becoming consumer-centric, and how marketing and technology are involved. All that, plus an inside look at launching his book and a shout-out to little moments that make a big difference.

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Influence Podcast: Making the Healthcare Shift

7 min

REPORT

Key Elements of a Next-Generation Digital Marketing Strategy

Get new insights into demand generation, driving digital commerce and optimizing customer experience.

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Six Drivers of Digital Marketing Success

Digital marketing has come a long way from simply putting banner ads on the internet. It has evolved from mass messaging to personalized messaging, and finally to integrated communications in blended physical and digital environments.

In addition to the traditional goals of creating awareness about the brand, marketers can now choose from a new range of goals, ranging from demand generation, driving digital commerce, and optimizing the customer experience of products and services.

In order to deliver on these new goals, marketers need a next-gen digital marketing strategy, one that goes beyond the scope of what marketers could traditionally achieve and harnesses the power and complexity of today’s marketing technology and data platforms.

This report defines the key characteristics of a next-gen strategy, and identifies 6 drivers of its successful implementation to help you evaluate your team’s readiness for the next phase of its digital evolution.

In this report, you will learn:

  • What defines a ‘next-gen’ digital marketing strategy
  • What key factors drive success in this new marketing paradigm
  • How to prioritize the use cases and technologies that are most important to your marketing organization

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REPORT

The State of Digital Transformation 2019

Most transformation efforts continue to focus on modernizing customer touchpoints and enabling infrastructure.

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Digital is an enterprise-wide strategic priority — but there’s work to be done

Now in its fifth year, our annual “State of Digital Transformation” research continues to document the constantly evolving enterprise. As disruptive technologies and their impact on organizations and markets continue to progress, our research aims to capture the shifts and trends that are shaping modern digital transformation.

In 2019, strategic digital transformation is only becoming more pervasive moving beyond IT to impact competitiveness throughout the organization. Budgets are soaring. The list of disruptive technologies on the radar of stakeholders is expanding. Ownership is moving to the C-Suite and managed by cross-functional, collaborative groups. Customer experience (CX) continues to lead digital transformation investments, but as we observed in 2017, employee experience and organizational culture are also rising in importance to empower and accelerate change, growth, and innovation.

Digital Transformation as an Enterprise-Wide Movement

This year, it’s clear that digital transformation is maturing into an enterprise-wide movement. Digital transformation is modernizing how companies work and compete and helping them effectively adapt and grow in an evolving digital economy.

What’s also evident is that there is still much work to do as companies are, by and large, prioritizing technology over grasping the disruptive trends that are influencing markets and, more specifically, customer and employee behaviors and expectations.

The State of Digital Transformation: 5 Key Takeaways

  • A successful digital transformation is an enterprise-wide effort that is best served by a leader with broad organizational purview. For the second year in a row, CIOs are reported as most often owning or sponsoring digital transformation initiatives (28%), with CEOs increasingly playing a leadership role (23%).
  • Market pressures are the leading drivers of digital transformation as most efforts are spurred by growth opportunities (51%) and increased competitive pressure (41%). With high-profile data breach scandals making daily headlines, new regulatory standards like GDPR are also providing impetus for organizations to transform (38%).
  • While there is a growing acknowledgment of the importance of human factors in digital transformation – like employee experience and organizational culture – most transformation efforts continue to focus on modernizing customer touchpoints (54%) and enabling infrastructure (45%). But many organizations are not doing their due diligence when it comes to understanding their customers, with 41% of companies making investments in digital transformation without the guidance of thorough customer research.
  • Organizational buy-in remains a top challenge for those leading digital transformation. The companies we studied report digital transformation is still often perceived as a cost center (28%), and data to prove ROI is hard to come by (29%). Cultural issues also pose notable difficulty, with entrenched viewpoints, resistance to change (26%), and legal and compliance concerns (26%) stymieing progress.
  • Innovation is staking its claim within the organization. Nearly half of respondents report that they are building a culture of innovation, with in-house innovation teams becoming the norm.

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BOOK

Making the Healthcare Shift: The Transformation to Consumer-Centricity

SCOTT DAVIS, JEFF GOURDJI

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Summary

As the industry sits on the edge of disruption, healthcare organizations need to transform to stay relevant.

Healthcare organizations now have both the motive and means to empower, engage, equip and enable consumers. While healthcare organizations have recognized the need to change, they have struggled to get started and sustain the effort. Based on conversations with leading healthcare organizations such as Mayo Clinic, Intermountain Healthcare, Geisinger, Anthem, Aetna, Pfizer, Novartis and more, the book identifies five required shifts organizations can make to better compete in this evolving landscape.

Through case studies and practical examples, Making the Healthcare Shift provides healthcare leaders across the healthcare ecosystem with a playbook to make their organizations more consumer-centric.

“Making the Healthcare Shift: The Transformation to Consumer-Centricity” is available at Amazon, Barnes & Noble, Google Play or wherever books are sold.

Highlights

  • Identifies the five shifts healthcare companies need to make to become more consumer-centric.
  • Offers case studies and practical advice on how to make these five shifts become a reality.
  • Reveals how traditional healthcare organizations (payers, providers, pharma companies) can prepare for the changes to come and re-invent how they engage with consumers.
  • Provides practical advice for healthcare leaders across the globe who have the fortitude to transform their organizations to both compete and win in the age of healthcare consumerism.

Endorsements

Andrew Dreyfus
Chief Executive Officer, Blue Cross Blue Shield of Massachusetts

“The time has come to put the consumer at the center of everything. Scott and Jeff offer a guide to that important change. It’s grounded in consumer relationships that are built on partnership and collaboration”

Kevin Kumler
President of Health Systems, Zocdoc

“Our partners are getting more than the technology we provide – we help healthcare organizations become more digital and agile in nature. Scott and Jeff do a great job providing practical advice on how healthcare organizations can successfully partner with digital health companies.”

David Edelman
Chief Marketing Officer, Aetna

“Living the transformation in health, I know the path is not simple” That is why it is so refreshing to see the learning Scott and Jeff have brought in an extremely useful guide for change.”

Peter Corfield
Chief Commercial Officer, Spire Healthcare, U.K.

“…This book will help healthcare leaders – in any geography – win with consumers in their markets.”

About the Authors

Scott Davis

Scott is the Chief Growth Officer of Prophet, a leading strategic growth firm.  In over 25 years of brand and marketing strategy consulting, he has worked across an array of clients, including, GE, Allstate, Hershey’s, Microsoft, Boeing, Sara Lee, NBC Universal, the NBA, Target, Gulfstream, United Airlines, the City of Chicago. His work in healthcare includes Johnson & Johnson, the Blue Cross Blue Shield Association, Mayo Clinic, Novant Health and an array of provider systems in the US and across the globe. Scott is a frequent guest lecturer at MBA programs across the country and served as an adjunct professor at the Kellogg School of Management at Northwestern University. Scott is a contributing columnist at forbes.com and is the author of 3 previous books, including The Shift:  The Transformation of Today’s Marketers into Tomorrow’s Growth Leaders.

Jeff Gourdji

Jeff is a Partner and co-leader of the healthcare practice at Prophet.  With over 20 years of leading high-impact marketing & strategy projects, Jeff brings a breadth of experience that comes from working across many industries as a marketing practitioner, management consultant and political strategist. Jeff has worked extensively across the health care value chain across an array of growth challenges.  His current and past clients include Mayo Clinic, Northwestern Medicine, Encompass Health, Anthem, Eli Lilly & Company and several Blue Cross Blue Shield plans. Jeff is a frequent speaker and writer on healthcare topics and has been published or cited in Becker’s Hospital Review, Modern Healthcare, Medical Marketing & Media (MM&M), PM 360 and the Chicago Tribune. Jeff received his B.A. from the University of Michigan and his M.B.A. from the University of Chicago Booth School of Business.

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Want to speak to Scott or Jeff about how to become more consumer-centric? Contact us today.

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The Body, Mind and Soul of Digitally Evolved Organizations

Getting employees to believe in transformation efforts requires a bold new way of thinking.

Why Corporate Culture is the Biggest Impediment to Digital Transformation

When it comes to digital transformation, many companies say the hardest part is changing the culture itself. They often do a great job signposting new corporate values, like innovation and agility. They hold town halls and may even pour millions into expensive technology initiatives. At best, they get poor adoption rates. But often the worst happens: Nothing changes.

After a few rounds of announcements, disappointed (and increasingly cynical) employees sit back and wait. Their leaders tell them that things must change, but then offer platitudes about their position as traditional industry leaders. “There will always be a need for pharmaceutical sales reps,” they might say, or “Those start-ups don’t even make money.”

Meanwhile, employees watch, keenly aware of digital natives that threaten to disrupt their own industry. They have few choices: They can leave for fleeter firms, or stay put, watching the clock tick.

Do Your Employees Believe in Your Digital Transformation?

For most older organizations, the digital age presents a very specific challenge: How might we compete when the assumptions about where and how value is created have changed? They know the answers lie in digital, and it’s not as though these born-before-the-Internet companies have been standing still. Most have many digital things–websites, sophisticated email strategies, social media and probably at least one mobile application.

Still, progress is slow. And employees, who spend their outside time experiencing companies like Amazon, Netflix and Spotify, are painfully aware of how behind the curve their own employers are. Convincing them that true digital transformation is even plausible, never mind possible, is difficult. Why should they believe you?

“How might we compete when the assumptions about where and how value is created have changed?”

What makes it worse is that even though employees can see–everyone can see–that the company needs to make radical changes, internal strategy teams focus on gradual tweaks and long-term transformation, to minimize disruption. While employees can see the company needs to travel vast distances to catch up, their employers are only taking baby steps.

Relatively few organizations have truly asked themselves, “What would we look like if we’d been designed in the last 20 years?” and then set a rapid roadmap, three years at the most, for working backward to create those capabilities and the culture to support them.

Challenges of an Incremental Approach to Digital Transformation

And the unrecognized truth is that taking an incremental approach to digital transformation comes at a tremendous cost. The widely reported “retail apocalypse” is an obvious example. Over the last 25 years, nearly all retailers worked hard, but slowly, to launch to e-commerce websites and mobile apps. They tried to balance conflicts between physical and virtual stores, creating expensive loyalty programs that gathered customer data.

But their incremental approach was often too little, too late. In the U.S., for example, grocers didn’t fully anticipate the speed with which Amazon and Walmart would enter their markets with advanced digital capabilities for serving shoppers. Dozens of chains, including Toys R Us and Payless Shoes, were forced into bankruptcy by online competitors. Mainstream and luxury department stores, from JC Penney in the US to Harvey Nichols in the UK, are teetering. Across Europe, high streets have been similarly decimated, with House of Fraser the latest to struggle. And in Asia, online retail continues to sizzle, led by Alibaba’s Taobao and Tmall, as well as JD.com.

That’s just one industry. Look at what Airbnb is doing to hotels and Uber and Lyft to taxi operators, or the way Grab is shaking up food delivery in Asia. These digital companies are succeeding because they know we live in an experience-first world. Customer wants are rapidly evolving, requiring dramatically new levels of organizational flexibility, agility and adaptability.

And that responsiveness is about technology, yes. But it’s very much about humans. Data can tell us what people have done in the past and what they need, but it can’t create new products and services. Digital technology can’t see trends, nor help you decide how to shift a business as markets evolve. It can’t drive culture, those values and beliefs that make people want to come to work for you every day.

Transforming an Organization’s Body, Mind and Soul

At Prophet, we’ve started thinking about digital transformation as rewiring the Body, Mind and Soul of the enterprise.

Body: Reinvent the Operating Model

A company is trained and equipped to achieve its vision if it can do three seemingly simple things:

  • Design customer-focused business processes unencumbered by bureaucracy
  • Create an organization with the right roles, empowered to make those processes fleet and effective
  • Shape a governance structure that makes it supremely easy to do the right things, versus being designed purely to block the wrong things

Modern operating models frequently depart from traditional approaches, organizing communities of practice instead of departments and using multi-disciplinary teams to understand customer needs and design new products, services and experiences.

For instance, a large financial services firm determined that its key strategic goal was to dominate the industry in customer experience and differentiate itself through service. But it was bogged down by business units so siloed that its best customers, those who purchased the broadest range of products, got the worst experience. Working with our team, the leaders agreed on a digital transformation vision. Two years after launching its new operating model, it has moved from being the customer-experience laggard to an industry leader, according to several analysts.

Mind: Energize the Talent

The relentless pace of innovation means that many companies struggle with a mismatch of skills and capabilities. This can even happen to digital companies: We recently worked with a global tech behemoth that couldn’t find a market for its newest products. It wanted to deliver innovative Software-as-a-Service (SaaS) products targeted at healthcare, but its talent wasn’t up to it. Product managers had never developed SaaS products before. Project managers weren’t trained in agile software development.

Addressing challenges within the Mind of your organization means pinpointing these mismatches, and either building skills through training or recruiting new talent.

Soul: Create More Meaning

The corporate soul, like the individual one, is as important as it is subtle. We approach Soul starting with the very DNA of firm: by identifying the purpose of an organization. We then begin defining the supporting values that make the firm a place that people love to work. Our recent research on purpose, based on 350 business leaders, confirms that this purpose must be evident to employees (and consumers) every single day.

And it must address big questions: What role do we play in the community? How well do we manage our impact on the environment? Is our workforce diverse? Are we adapting to technological change? Are we providing the retraining and opportunities that employees need to adjust to an increasingly automated world? Those with a well-defined purpose, like Starbucks, Patagonia and LEGO, inspire the way their people think and work toward the kinds of transformation that ensure values for customers and meaning in the work itself.

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FINAL THOUGHTS

Balancing all three is challenging. But healthy human-centered enterprises recognize that mind, body and soul are connected. Organizational health–and the ability to step boldly into future transformation–comes from synchronicity between the three.

Learn more about how to spearhead your brand’s successful digital transformation.

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