Harness the power of data integration to provide more powerful B2B solutions

For B2B suppliers, finding ways to strengthen and increase the value of the solutions they provide is a proven and effective way to accelerate growth. Over time, solutions-driven companies have moved beyond the predictable precepts of “solution selling” and product bundling to solve important customer problems by linking products, services and advice in ways that deliver significant customer value. Hewlett-Packard’s move to link systems integration and networking support to its hardware offering is a classic example of the effectiveness of moving from products to solutions.

Our client work has highlighted the opportunity to move to higher, more integrated and more comprehensive levels of solution delivery by integrating the power of exploding digital data sources, predictive analytics and digital information interchange with customers. These solutions do not merely use big data to target customers or improve how companies promote existing products or services. Instead, they integrate data into the actual solution so the solution adapts and becomes more valuable as a customer uses it.

Data-integrating solutions are emerging because data has reached a tipping point, with 90 percent of it generated within only the last two years. The power of integrated solutions is all around us. Caradigm, a joint venture of GE Healthcare IT and Microsoft has begun providing data integrated solutions to help hospitals better coordinate patient care and fill in treatment gaps. Logistics companies such as UPS are incorporating traffic congestion data into route planning to improve package delivery times. Facility managers have begun using smart heating and cooling systems that adapt the use of resources to the environment, energy prices and demand.

Monsanto is an example of a company at the forefront of unleashing these new, data-integrating solutions. Over the course of less than a decade, it has moved from leadership in producing seed with improved yield characteristics to becoming a greater partner with farmers in improving field productivity. And at the same time, it has outperformed its industry peers by nearly five-fold. The shift from seed-product producer to field-solution provider has involved several steps, including the introduction of an agronomist force that helps farmers make better choices.

Recently, Monsanto has accelerated the solution shift by purchasing Climate Corp., a data source for weather and climate information and is integrating its information with soil and crop data, creating powerful new solutions that improve farm performance. Importantly, these solutions are not static. They learn and become more meaningful as weather and soil conditions change and as farmers experiment.

Data-integrating solutions are emerging because data has reached a tipping point, with 90 percent of it generated within only the last two years. Yet few companies have a plan to use these new sources of information and customer value effectively. To achieve gains that are truly transformative, B2B companies must learn to harness this data to build integrated solutions that elevate them above the role of the vendor. It requires harvesting the most relevant customer information available and offering insights that make them genuine business partners.

Pitfalls in the search for solutions

The rare B2B company is able to prosper through a steady flow of extremely innovative products and services, offerings that are so unique and protectable that competition cannot keep up. But most must use every tool possible to avoid becoming commoditized, to stay relevant as customer requirements change and to differentiate in more global and competitive markets.

And adding related products and services and providing expertise for broader solutions has certainly been effective in avoiding being treated as an ordinary supplier and more like a strategic partner, enabling interactions with higher-level decision-makers. These stronger, more solid relationships—at least theoretically—also decrease the risk of losing business to a competitor.

But creating a tangible and measurable return on the added investment continues to be a challenge. Many B2B companies find it difficult to charge for the extra investments or generate a premium through their core pricing. Customers begin to see such innovations as a “favor” for giving a supplier all the business, value-added service with benefits that are hard to rely on or quantify. When solutions don’t yield margin or a platform for meaningful growth, they don’t remain sustainable and wither without additional support. Companies may start a pilot project here or there, but the risk tolerance is low. If they can’t figure out a way to make it profitable rapidly, they shut it down.

The power of data-integrating solutions to create customer intimacy

Digital technologies are enabling B2B companies to get close to end customers quickly and cheaply, and these insights are providing tools that jump-start growth. Dunn & Bradstreet has joined forces with Salesforce Analytics Cloud to build a more valuable prospecting solution by making financial and firmographic data available to millions of salespeople, even via mobile device. Avery Dennison has found new ways to combine high-technology labels with data to improve end customer package line speeds. The label, packaging, data solution increases overall packaging productivity without giving up on-shelf impact.

At Prophet, we’ve become adept at finding new ways to help our clients leverage data integration to achieve growth. Here are four data-driven strategies that show plenty of promise. With this new data and fresh insights, the odds of success are better, and the stakes for failing to do so are higher:

Combine product, expert service with data Cisco has shifted its primary business away from just communications and networking/switching components to include systems integration, software, network design advice and monitoring. It’s enabled them to build and maintain powerful collaboration communities around key issues, such as productivity or call-center management. Landis + Gyr has moved beyond the sale of electrical meters to smart meters and provides data collection and analytics. It’s now working to improve the energy efficiency of the entire electrical grid, making it more resilient and robust.

Enhance your product with powerful data Halyard Health, formerly the Kimberly Clark Healthcare division, makes the gowns, masks and gloves that help control infections in hospital settings, a process that has come under intense scrutiny with the rise of such illnesses as MRSA and Ebola. In providing data on best practices, hygiene, and ER and OR efficiency, Halyard launched a service called AiRISTA, installing a simple tag at hand-washing facilities that tracks when and how frequently providers wash their hands. It helps ER personnel become more compliant with washing their hands, which in turn reduces infections and lowers hospitals’ re-admittance rates. In doing so, Halyard has moved from selling gloves and gowns to selling data powerful enough to significantly improve patient health and ultimately lower operating costs.

“The rare B2B company is able to prosper through a steady flow of extremely innovative products and services, offerings that are so unique and protectable that competition cannot keep up.”

Leverage data to go direct B2B companies can no longer sit on the sidelines and let others disintermediate their distributor relationships by appealing to their end customers. Channel conflict is an age-old issue, which expanding data access is rapidly making more complicated and more difficult to manage. Airlines such as United are no longer sitting and watching intermediaries (data collectors like Kayak) take control of the travel planning of large corporations with heavy travel needs. Others with historically restricted access to end customers, such as pharmaceutical companies, are providing data to build direct (if not actually transactional) relationships with physicians and sufferers around ways to improve overall patient health while keeping within regulatory restrictions.

Harness the power of data companies such as Citibank don’t just issue credit cards or use big data to improve campaign targeting. They are also organizing and finding insights based on their billions of transactions to use as a separate business to support their B2B clients. They are helping their B2B clients improve forecasting demand for products, adjust merchandising plans and modify staffing assignments based on improved access to high-quality data.

Make this search for solutions better than the last
Often, our clients tell us they’re not sure where to begin the search for the best ideas for integrated solutions. We’ve found three guidelines keep B2B companies on track:

• Get closer to your customers: Putting the customer—and your customer’s customers–at the center of your decision-making has never been more important. Understand deep needs and behaviors, and study what they do on the web. Push beyond traditional market research methods to collect and mine actual behavioral data on your customers.  Augment everything you do with collecting data on web traffic.  The best solutions come from a more nuanced understanding of customer behaviors based on data and traditional insights gathered from market research.
• Build, buy or partner: In many cases, the data and insight landscape is changing too fast for you to become an expert. You can choose to build, but it will require a multi-year investment with low NPVs in the short term. Explore partnerships and potential acquisitions. You can accelerate your knowledge more quickly by leveraging what others already know about how to effectively use data.
• Stay committed: Integrated solutions take time to get right. Be ready to fail fast, but don’t back down. Failures are to be expected, and even encouraged, because in regrouping, you’ll improve your organization’s agility.

You might also be interested in…

B2B growth leaders such as Avery Dennison, GE Healthcare and Pentair share a few common essentials that are the key to their success. They prioritize meaningful innovation. They target customers who appreciate value and are willing to pay more for it. They create and deliver solutions that are hard to duplicate.

Accomplishing this takes hard work, a belief in profitable growth and an unrelenting focus on the underlying needs of customers. Put simply, these companies think through where to play and how to win one application, one industry segment at a time.

We’ve worked with B2B companies with a strong track record of sustained, profitable revenue building and have since identified five growth essentials for success:

Focus On Your Customers

You have to focus on the customers who are the key decision-makers in the value chain. A manufacturer of labels has to think about the CPG company that determines how packages are labeled, not just the distributor. Commercial insurers need to add value to the companies seeking risk management who ultimately buy their products, as well as the brokers who sell them. Finding the right decision-makers and building relationships with end customers is crucial. Their insights will ultimately drive new product and service innovation at your company.

“Finding the right decision-makers and building relationships with end customers is crucial.”

Avery Dennison put its core label business back on a sustainable growth trajectory by supplementing its distributor-focused sales effort by identifying, understanding and addressing the needs of the end customer – packaging engineers who were the drivers of packaging decorating innovation. Segment teams learned where packaging engineers played and who advised them in different industries. The Avery Dennison segment teams determined how to tailor innovation and product information to meet their requirements. By making innovation and marketing more relevant, they boosted sales.

You might also be interested in…

As the Chief Growth Officer at Prophet, I see a lot of companies struggle with growth—both where to find it and how to manage it. And unfortunately, oftentimes marketing isn’t even part of those conversations. That’s why I never stop marveling at the way Steve Robinson, Chick-fil-A’s senior vice president and chief marketing officer, and his team combine their role as marketers with the businesses’ broader goals and growth targets.

Recently, I sat down with Steve to talk about what he’s learned in his 32 years at the fast-growing QSR chain. Between gains from its existing restaurants and opening new stores, the company has been growing at the enviable rate of roughly 13 percent annually, which means the business doubles every five to seven years. Not jealous yet? For the last several years, it’s even managed to do so with no borrowing.

“Our growth is based on two things,” he says. “The first is brand relevance, which includes everything from menus, buildings, service, technology, packaging and sustainability. And next, we have a strong focus on our Operators to ensure they have what they need to grow same-store sales.”

Here are six of Chick-fil-A’s marketing strategies that apply to the many companies looking to find new paths to growth:

Build your “raving fan” base

Long before social media experts talked about WOM and brand ambassadors, Chick-fil-A had identified a type of customer it nicknamed “Raving fans.” Of the 7 to 10 million people eating at its restaurant each week, this is a rabid subset, about 10 to 15 percent of its total audience. They visit Chick-fil-A four or more times each month, and are so jazzed about the company that they even dress up as the brand’s famous cows to celebrate “Cow Appreciation Day” to win a free sandwich.

Of course, Robinson says the company always strives to bring new fans in at the top of the funnel. But these die-hards “are crucial to the health of the business and help us grow. Our goal and strategy is to build special relationships with them.” To that end, Chick-fil-A Operators go to incredible lengths. They might follow a customer out to their car, holding an umbrella on a rainy day. A recent example: After Auburn’s recent defeat of the University of Georgia, some homebound fans phoned in an order, even though the store was about to close. Not only did the restaurant stay open, when the Operator discovered they were bereft “Dawg” fans, he gave them the meal for free. “No one told the Operator to do that,” Robinson says. “They create these fans themselves every day, and we’re constantly amazed at the innovative ways they think of to deliver this level of unexpected service.”

Know what will make your customers happy tomorrow

Whether it’s a Peppermint Chocolate Chip Milkshake, ever-more-clever cow “Eat Mor Chikin” ads, or a new mobile payment app, Robinson says the company tries never to lose sight of what delights its customers.

“Yes, great crave-able food is the most important thing. But how do we plus-it-up with great service, interactions, and experiences?”

Steve Robinson, Chick-Fil-A

That also means reaching beyond known pleasure points to discover new ones: “Sometimes customers don’t know what they want yet. Our job is to uncover those things and get out ahead of them. It’s like my favorite Wayne Gretzsky quote, ‘We need to go where the puck is going, not where it’s been.’”

To that end, Chick-fil-A recently opened “Hatch,” its 80,000-square-foot innovation center, to explore new ideas in food, design and service. Among its breakthroughs so far: Streamlined technology to make ordering and payment faster and easier, and a new way of fixing chicken that actually required patenting and building a new custom grill. “By May, you’ll hear us talking a lot about this new platform for grilled chicken. That is a hardware innovation, but it is key to our marketing message of relevant menu improvement.”

Build relationships, not transactions

Selling more sandwiches is a good thing, but to Robinson, almost beside the point. Real growth, he maintains, comes from rich relationships, not minor sales blips. College football is one of his favorite examples, and the company has been involved with college sponsorship for 17 years. “It’s our sweet spot,” he says, “a demographic and lifestyle fit.  College fans, alumni, and viewers index very high for Chick-fil-A.” The company tracks engagement by measuring reactions to digital offers made during games: Some 75 percent of Chick-fil-A customers watch with a second screen in their hand.

“We also activate on the ground, giving away food at Chick-fil-A Bowl games, and at events on campus. Our Operators strike vendor relationships with stadiums. We have Operators in the communities who have great relationships with over 200 athletic departments where we provide catering.” Yes, it’s an expense, and not always an easy one for everyone to grasp. “But for us, measured in terms of relationships built and enjoyment for fans and our customers, it’s worth it.”

Stand up for your customers, even when it’s difficult

Robinson, who is also on the executive committee, says marketing has earned its seat at the table primarily “by being a relentless advocate for the customer.” Sometimes, he concedes, that requires tenacity. A current example: Building restaurants that are LEED-certified, a sustainability certification that carries greater expense. “That may not sound interesting to all of our leaders, but it is very important to our customers. Which makes it a priority.”

Decide how you won’t grow

Robinson and his team are keenly aware of the fierce battle for share of America’s stomach. More than half of the country’s meals are now eaten away from home. As restaurants proliferate, even convenience stores and grocery chains are now selling prepared meals, fighting for every breakfast, lunch and dinner. “But we know we will not compete on price. For us, the evolution has been how to do more than food. Yes, great crave-able food is the most important thing. But how do we plus-it-up with great service, interactions, and experiences?”

Bring grace to the table

Robinson admits he’s had to learn a lot, both personally and professionally, to roll with the punches that come with engaging on a political or social issue.  Last year, the company found itself embroiled in a controversy over remarks Dan Cathy, COO and son of founder Truett Cathy, made regarding same-sex marriage. The ensuing firestorm resulted in boycotts, protests, and even nasty Tweets from some mayors. The company eventually issued a statement that it would harken back to what has always been most important to Chick-fil-A – serving everyone with honor and respect. “The experience reminded me about the spirit of hospitality, of graciousness, that this company was founded on. Everyone is welcome at Chick-fil-A. Everyone should feel at home. The root idea is grace, and our Operators have really leaned in and stayed true to that model, even handing out food and water to protesters. Staying true to our core values can help weather any PR storm.

You might also be interested in…

Quick wins are crucial to any growth strategy. They build momentum and fund investment for longer-term growth initiatives. Cost-cutting, acquisition and restructuring are important tools in improving short-term gains, but they often distract organizations from building revenue organically.

Immediate, customer-driven revenue gains are often overlooked in the search for quick wins. When combined with prudent cost reduction they yield tangible results and keep employees focused on the customer. They also build the marketing, sales and innovation competencies needed to grow even faster in the future.

At Prophet, we’ve developed a checklist of ten rapid revenue drivers based on the repeated achievements of successful growth organizations. But first, let’s ensure we’re all clear on what organic growth means:

What Is Organic Business Growth?

Organic business growth is achieved by using your existing resources to expand your business. On the other hand, inorganic growth is done through mergers, acquisitions, and takeovers.

Organic growth is a key method for yielding tangible results, keeping employees focused on customers, building marketing, expanding sales, and innovating.

10 Ways to Organically Drive Business Growth

To help you determine some quick ways to drive organic growth, we’ve developed a list of ten essential strategies, based on organizations we’ve seen grow successfully:

1. Sell More to Your Best Customers

It’s easy to believe your biggest customers are also your best customers. But, usually, it’s a myth. An analysis of profit contribution, cost-to-serve and organic growth potential can highlight key customers worthy of an intense, cross-company focus. We’ve repeatedly seen that type of full-court press on just 10 to 20 percent of the customer base (the best customers) boost bottom-line profit by 5 percent or more.

2. Make the Most of New Customer Relationships

The early days of a new relationship are critical, and yet one of the most overlooked parts of the customer experience. Clients across categories consistently express the greatest willingness to buy more and to try different products just after they come on board. Why not take advantage of that honeymoon period, offering more products, services and accessories?

There’s a long-term benefit as well. Our studies on behalf of clients have found that on average, customers who make a second purchase within 90 days of the first purchase are more than double the lifetime value of the average customer.

3. Focus on Your Sales Team

For immediate impact, adding or beefing up the sales team is one of the most effective drivers of organic growth.  This is especially true in industries with multiple sales channels. We’ve seen it work for a national insurance company, which got immediate results by resisting the urge to cut costs and instead adding sellers to its highest-growth market. And we have also found a consistent pattern of profitable revenue gains from targeted sales-strengthening moves in Fortune 500 companies. Many didn’t even increase headcount, but rather redeployed existing resources, using better training and better processes. Redeploying resources generates an almost instant payback versus the typical six to 12-month payback from new sales hires.

4. Optimize an Upcoming Launch

Too many line extensions and not enough blockbusters scheduled for launch next year? Prioritizing the most important introductions and focusing on execution is one of the simplest ways to organically boost revenue. It won’t create best sellers, but it avoids having a plethora of small launches dilute impact among customers.

It doesn’t happen as often as it should because it takes day-to-day diligence and a willingness of functional teams to work together. But when leaders focus on cross-functional priorities, time-to-market improves an average of 20 to 30 percent, mostly from avoiding the delays that build up in over-extended organizations. These gains require little to no incremental investment.

5. Raise Prices Strategically

While across the board price increases may be inadvisable in competitive markets, there are usually groups of customers or clusters of products that can withstand a price increase without slackening demand. Our clients have repeatedly identified 20 percent of their lines with lower elasticity due to a different competitive set or different buyer profiles. Selective price increases are one of the fastest and lowest risk moves a company can take because almost all the benefits flow to the bottom line and the investment in analysis takes only a few weeks.

6. Implement a Measurable Media Strategy

Insufficient data is no excuse for not being able to assess the impact of media investments or failing to conduct marketing mix analysis. If media isn’t measurable, shift the mix to media that is. If it is measurable, dig in and start optimizing. We have found that companies who have shifted marketing dollars to digital mediums have been able to quickly launch, test and learn new value propositions and pricing, which can add 10 to 15 percent incremental revenue.

7. Consider Organizational Change

Organizational change can definitely result in greater working efficiency and increased productivity, but keep in mind that organization-wide restructuring is incredibly taxing for leaders and employees— it creates upheaval and usually takes a while to pay off.

The cross-functional dependencies required to innovate, sell and market are easily disrupted— so evaluate your goals and your timelines before you decide to rock the boat now, or whether you need to focus on short-term growth.

If your primary goal is long-term organic growth, consider an organizational change. But if your priority is short-term business growth, concentrating on encouraging and supporting the work of informal multi-functional teams will have a greater impact.

8. Refresh Best-Selling Products

When times are tough, supply chain leaders want the sales force to focus on over-inventoried products. Finance frets about margins. And product engineering looks to the newest thing – even if it doesn’t have a benefit. Don’t indulge. Take your best-selling products and focus on selling more of them.

Crayola increased crayon sales by 50 percent in a single year by renaming a few colors. Samsung boosted washing machines sales by 15 percent, simply by making them in bright reds and blues. Find ways to refresh the products through color, materials and packaging. Explore new marketing avenues through brighter merchandising, sharper messaging and more inspired promotions.

9. Rework Your Sales Pitch

It’s usually just a few highly skilled members of the sales team who produce the bulk of incremental sales. Use their experience and customer understanding to rework the pitch for the rest of the team. A sharper pitch, particularly when it shifts focus to customer issues and delivers solutions, can have an immediate organic growth payoff.

Avery Dennison generated remarkable results by doing just this for their reflective materials division. A single pair of salesmen sold five times the average. It turned out they talked about the advantages of the product in a totally different way than their colleagues. The revelation changed the way everyone else went to the market and transformed the marketing message.

10. Set Concrete Goals & Reward Success

It is amazing what people can do if they have a concrete goal to speed up a launch or introduce an important initiative. Detailed process redesign may be crucial to long-term speed-to-market improvements. But in the short term, there is no substitute for asking teams to go faster, celebrating their success and rewarding them for the additional effort. The secret sauce? Growth leaders at these companies take the time to find and unclog administrative and process bottlenecks their teams are facing.

You might also be interested in…