Article
Cut back or grow during a recession? You don’t need to choose
Through digital ways of working, you can achieve both efficiency and growth
September 26, 2022
Article
Through digital ways of working, you can achieve both efficiency and growth
September 26, 2022
The traditional wisdom goes something like this: When the economy is running hot, that’s the time to experiment with creating new offerings for customers in the name of future growth. When the near-term economic future is unclear, that’s when you dial back innovation and focus instead on efficiency and cost takeout.
The operative word there? “Traditional.” Those were the old days. That philosophy is no longer relevant, and that way of running a business is outdated.
We live in different times now—digital times. And businesses that adopt a digital mindset and digital ways of working don’t have to choose between growth and efficiency anymore. They can do both at the same time. And that allows them to stay competitive among both their traditional peers as well as digital natives—whether the economy is on fire or on ice.
As an example, let’s look at two of the biggest revenue-generating functions in any organization: sales and product development.
The more valuable a company is to its customers, the less vulnerable it is to economic swings—which is why customer centricity should be a core part of your sales process. But today’s customers expect high-touch service. Executing on that manually—especially at scale—takes a lot of time. That’s not only an inefficient way to work. It also translates into lost revenue: Sales reps get bogged down trying to sell products and services to lots of new customers while also trying to sell more to—or at least retain—all the existing ones. That leaves them less time to close more and bigger deals with more customers. Another issue: lack of buyer insights. Time and revenue likewise go up in smoke when sales reps don’t have a full picture of who their customers are and what they value. They end up targeting the right buyers with the wrong offerings; targeting the right buyers with the right offerings, but at the wrong time; or even just plain targeting the wrong buyers. So how do you build a better understanding of your customers while also reducing the effort it takes to provide high-touch service?
It starts with data. End-to-end intake and analysis of data from every touchpoint—both physical (e.g., a sales rep) and digital (e.g., an app)—allows you to gain deep insights into your customers. This creates a single source of truth that is constantly being updated, allowing your sales function to:
Identify who your ideal customers are—even if that changes over time—and more effectively segment accounts
Target the right buyers with the right offerings at the right time in their buying journeys
It may sound like a big, expensive, time-consuming can of worms to open. But it doesn’t have to be any of those things. A 2019 Forrester report noted data warehouse automation platforms—that is, technologies that automate data ingestion and management—can “close the data-to-insight gap.” These platforms “facilitate shorter development cycles and require fewer human resources with specialized data modeling skills,” offering businesses a simplified, cost-conscious alternative to fully customized data platforms. In other words, you spend less time and money preparing your data—and more time actually using it.
With continuous data ingestion and analysis, you’ll not only better understand your customers, which itself will drive more and bigger sales. You’ll also better understand their buying journeys—and what they need to better understand the value you provide.
That will point you to another opportunity: You’ll see where you can build digital touchpoints into your sales process that seamlessly join human-led efforts to engage customers at key moments—allowing you to provide that high-touch service more efficiently, even at scale.
Supplementary digital tools—for example, a self-guided online portal that allows customers to learn about products and services on their own—lets each sales rep spend less time and effort engaging each customer individually. That frees them up to sell more things to more people.
Here’s some even better news: Customers buy more when multiple interactions with a business help them better understand their own goals—and they don’t care if the interactions aren’t 100% human-led.
Gartner research found that buyers who reported their purchase decisions were primarily led by sales reps were less likely to complete a high-quality deal. The buyers with a digital self-service option that helped them learn more about their needs? They were more likely to spend more than they originally intended—because they felt more confident about their purchase decision. Bottom line? Data-driven insights into customer needs and goals, plus digital touchpoints and tools that seamlessly supplement the human-led sales process—it’s a magic combination for making the whole sales process more effective. Customers get a better buying experience—leading them to buy more and spend more, fueling top-line growth. Sales reps are saved from time-sucking manual activities—which boosts the bottom line—while more effectively targeting the right customers with the right offerings at the right time, helping them bring in more revenue.
Of course, an effective sales process is nothing without the right products and services for you to sell. That’s where digital-centric ways of working and a data feedback loop comes in. Within an innovation cycle, it looks like this:
Teams use market data and competitive intelligence to reveal a current or emerging market need.
Product teams quickly deploy an early version that is not fully baked—in other words, it functions, but the 2.0 features and benefits aren’t built in just yet.
Why? Because even after all the upfront data analysis, you still need to be sure your customers actually want it.
What’s more: Just because your customers say in surveys or focus groups (or even tell you face-to-face) they’re interested in your idea, don’t take only that data to the bank. Instead, go get more.
Test and learn. Test-drive the beta version with your ideal customers—the ones you zeroed in on using the data you collected in your end-to-end data intake and analysis processes.
Ask them: Do they like it? Will they actually use it? How much would they pay for it? What would make it even better?
Take that data back to your product teams and let them iterate. Then test the next version with users again—continuously—so you’re always making it better.
This agile, data-driven innovation process isn’t just more efficient than throwing spaghetti at a wall. It also helps you add more value for your customers (and bring in new revenue streams) in three ways:
New products and services: You should never launch anything new just for the sake of having more stuff in the market—no matter how excited product teams are about their idea, or how cool it is. It should always be based on real-world internal and external data that reveal proven market demand and customer need. Think of one of the most famous failed consumer products of all time: New Coke. Blind taste-testing 190,000 consumers indicated the product would be a success. But Coca-Cola’s market research testers failed to ask test subjects—many of whom were diehard Coke fans—how they would feel if the company swapped out the original recipe with this new formula. Coca-Cola found out very quickly that its customers might have liked the taste of New Coke—but they didn’t actually want it to replace their go-to cola. So don’t be afraid to innovate and build new things, even in a challenging business climate. After all, crises alter customer behaviors and reset their expectations, as well as make them more open to trying new things from brands unfamiliar to them. But dig deep during user testing to be sure it’s the right move before you debut anything new. Not all organizations can take the financial and reputational hit that Coca-Cola did and come back from it.
New features: Teams don’t necessarily need to build net-new products or services to generate new sales revenue. Sometimes they just need to update an existing one.
New features and benefits can entice current customers to buy the 2.0 version or upgrade their subscription to the premium version. Once again, though, the key is to add value with the right product enhancements. Customers won’t care if you’ve rolled out something new if it doesn’t improve their current experience and add value in some way. Consider Apple’s recently unveiled iPhone 14. It doesn’t look much different from its two predecessors. But Apple also added two new safety-centric features: Emergency SOS via Satellite and Crash Detection.
For people on the fence about upgrading their iPhones, these new, potentially life-saving features could seal the deal. In fact, it was data from real customers—actual Apple users’ stories about how the company’s products saved their lives in some way—that inspired Apple to roll them out.
Continuous and constant iteration: One big way product teams can add value for buyers: iterating existing products’ design to create greater fluidity between the digital and physical elements of the customer experience—because seamlessness builds customer stickiness. For example, navigating a major airport is often hectic. Travelers are bombarded with a ton of information at every turn—from digital screens, static signs, PA system announcements, and more—and most of it isn’t relevant to them, which adds to the chaos. That led Delta Air Lines to roll out a new digital offering: Parallel Reality. It’s a single large screen that shows information relevant to a traveler’s individual needs: wayfinding directions to a gate, flight info, lounge volume, etc. Built-in technology allows up to 100 people to see only their own info—and no one else’s—at the same moment. In other words, Delta’s product team took a physical element that exists in every airport—a big screen—and iterated it, adding a unique digital-enabled twist to make the travel experience a little less chaotic for customers. This iteration not only seamlessly blends the physical and digital elements of Delta’s customer experience—it also adds next-level personalization. (By the way, this is only available in the Detroit Metropolitan Airport for now while Delta tests it with users—and it’s likely Delta will further iterate, based on customer response data, before rolling it out to more airports.)
Bottom line? Organizations should always be aiming to work more efficiently and productively—while also building the cool new stuff that brings in revenue. One keeps the bottom line healthy. The other drives top-line growth. And to be a successful business, you need both. By leveraging data-driven insights and shifting to digital ways of working, you’ll transform your organization from top to bottom—not just sales and product functions, but across the board. You’ll trim waste by helping people work smarter and faster, reducing inefficiencies. And you’ll create greater value for your buyers with better, more innovative offerings, which results in business growth. And you don’t have to pick a lane. With data and a digital mindset, you can do both.