When people think about digital innovation today they often think of the consumer market. While most of the press goes to all the great products hitting the market, social media, and the rise of the digital native, there is a quiet revolution going on in manufacturing and distribution. I think the recent commercial by GE about a programmer getting hired by GE really nails the current thinking. After the initial congratulations and presenting a cake, the programmer’s friends don’t understand that he will be doing very cutting edge work. And that’s what many people believe.
Often thought of as laggards in the digital space, manufacturers and distributors are making large investments in moving their operations, marketing, sales, and hiring spending towards digital innovation. A recent study published by Gartner’s Mike Burkett detailed the survey findings from C-Level executives in manufacturing and distribution about their investment focus for 2016. The results were fascinating. No longer looking to drive cost cutting, these executives were focused on growth. Investments in Customer Segmentation, Marketing Automation, and Analytics were in the top five categories along with traditional focus on Product & Process improvements. We believe the key for successful transformation to a more digital approach is to focus on gaining the long term advantage in the market rather than only focusing on short term wins.
In our conversations with manufacturing and distribution executives we see four trends that are helping to drive this acceleration to digital maturity:
“I’ll do it myself.” - The average B2B buyer is 57% through the purchase journey before they contact a company or speak with a sales representative according to the CEB. The customer is not waiting for your call. They are getting out in front of the decision by educating themselves using search, videos, reviews, and other assets available to help them online. Smart companies playing for the long term understand that in a digital world, if they are not easy to find and sharing information, they are invisible to potential customers. Investments in customer segmentation, journey mapping, and customer experience initiatives are paying dividends to companies looking to grow revenues and retain customers.
“First place wins a trip to Miami! Second place wins a set of steak knives.” – Sales force efficiency is gaining traction as executives move their teams from order takers towards a more consultative model of selling. By understanding the shift in the customer journey and providing a frictionless eCommerce platform to enable purchases, CEOs want their sales teams to focus on relationships over transactions. Providing mobile tools to make sales calls more efficient in providing additional information beyond order taking gives companies an advantage over those which rely on sales teams to spend their time filling out sales sheets. Playing the long term means understanding that your sales team is your relationship team. Enabling this transition using smart technology provides your team with the tools they need to efficiently understand and support your customers’ needs beyond the simple transactional focus.
What do these four trends mean for the Manufacturing and Distribution industries? A fresh approach to thinking about how digital can help the company grow is needed. Rather than a one-off focus on digitizing one process at a time, companies have the opportunity to rethink their strategy to further incorporate digital into more aspects of their business model. Digital brings efficiency gains and lower costs through technology. But it is a focus on using digital to grow that will help executives win in the long run.