The B2B customer now expects digital engagement across the entire relationship lifecycle driving change in marketing, sales, and operations. A data driven approach with customer insights is critical to supply chain resiliency, competitive and flexible pricing, and keeping pace with the new expectations of the B2B buyer. Please join this customer session with Accenture and Norfolk Southern to learn more about Industrial Consumerism and how Norfolk Southern is embracing this digital transformation and their vision for the future.
About the Speakers
Brian May currently leads the Industrial practice in North America for Accenture, which includes heavy equipment, industrial products and distributors, among others. He has extensive experience in aftermarket parts/services, connected Vehicle and Product Lifecycle business services. He's passionate about creating value by ensuring a seamless flow across the entire extended value chain from supplier to manufacturer to distributor. At the heart of this integration are customers - meeting their needs and expectations for outstanding service. May has kept this customer satisfaction perspective at the core of his consulting services for more than 30 years and from this historical vantage point, he knows that smart connected product innovation will pave the way towards a future that has in store an industrial renaissance.
Craig Hudson, GVP Customer Operations and Service at Norfolk Southern Corporation, is a visionary executive with over 20 years leading multiple corporate functions including Customer Experience, Customer Service, Supply Chain, and Information Technology. Hudson has a track record of success for directing large-scale innovative initiatives that improve customer satisfaction, expand selling/service channels, optimize processes, and improve operational efficiencies.
Brian May: Hello, everyone. Glad to be with you today, I want to thank our friends at PROS for inviting me to be here with you today, and I want to also thank Craig from Norfolk Southern, who will be with me here in a minute to talk about the exciting stuff they have going on. The topic I'm here to talk to you about today is a great one. Very exciting. You know, we have we've spent a lot of time talking to a lot of companies out there, and I spend all of my time talking with industrial manufacturers and industrial freight and logistics and rail companies. But this topic transcends all industries, and that is around this new set of expectations that the next generation of B2B customers and buyers have. So I'm going to spend just a few minutes talking through what we're seeing in the marketplace, a little bit of our point of view and where we see the market heading. And then I'm going to ask Craig from Norfolk Southern to join me and we'll spend a few minutes talking about what they have going on....
Brian May: So first, let me just spend a few minutes talking about what's going on in the market. The cool thing about my job is I get to talk to a lot of different companies and hear what's on their mind. Hear the things that they're focused on. Here are the things that they're investing in, what their customers are saying to them. And if you look across all of those companies that we talk to, there's some themes that bubble up every single time. Let me hit just a few of these and then I'm going to double click into one. And that's our topic for today industrial consumerism. So first of all, everybody's talking about data. Everybody's talking about how do I leverage all of the data that's at my fingertips now? How do I collect it? How do I leverage technology to house it? And then how do I embed it in my business so that everything I'm doing is data and analytics lead? It's a topic on everybody's mind today and and as we'll talk more about over the next few minutes, that data gives a lot of insight into what your customers are thinking, which is really important as we talk about this topic of industrial consumerism. Second, speed to market, you know, industrials, generally speaking, move fairly slow. Hopefully no one's offended by that, but the clock speed of industrials compared to the expectation that customers have today for responsiveness compared to just how companies need to be able to predict and respond to volatility and take action quickly. Everybody's talking about speed to market being responsive. How do I how do I change the clock speed of my, of my company? Race to services, you know, whether you're making a product or you're moving a product, manufacturing, freight and logistics, how do I wrap a service around that thing that I'm doing to create a different experience for my customer? That could be an equipment company wrapping a fleet management or an asset management service around their core, their core product. Or it could even be moving towards selling that product in a different way, not even selling a product, but selling a service, selling an outcome that company's product might be in the middle of what they're really selling the outcome. Call it product as a service. Again, being talked about by just about everyone. Number 4 is the elephant in the room that’s supply chain. If I could get a show of hands on how many of you have a supply chain that is perfectly humming and working perfectly, I don't think there would be any hands up right now. It's a hot topic for everybody, and it really does impact that expectation that your customers, that your customers have. 5 is the growth pivot. So this is a structural priority for these companies. It's how do I structure myself to be able to respond effectively to these expectations that my customers have to the new stuff that I'm going to be selling because I'm not only selling products now, I might be selling that service. And that means I have to be positioned to do that a bit differently. Number six, of course, cost is always a topic, I mean, being lean, but really the new dimension today around cost is flexibility. There's a lot of volatility in the marketplace. Being able to have cost structures that flex with that effectively is a hot is a hot topic. Number seven, sustainability, you know, across a number of different dimensions. It's of course, how do I make sure my operations are green and sustainable? It's how do I make sure I'm driving that back into my supply chain? And then it's also how do I put products out into the marketplace that are sustainable and friendly to the environment? So clearly that is a hot topic. Then there's number eight, which is really why we're here today, and this is all about this new set of expectations that these B2B customers have. This is what we call industrial consumerism.
Brian May: Let let me talk about it in its simplest form, and it's really simple and really not as debatable as maybe it was even a short few years ago, and the concept is this. So I'm an industrial B2B buyer. I go to work every day and I buy stuff from my partners, my manufacturers or my freight logistics companies. I buy things from them. I go home at night and I stream my movies on Netflix. I buy my dinner off of doordash, where I see down to the minute when my food is going to show up on my front door. I buy my stuff from Amazon that I need to do my home project over the weekend, and then I go to bed. And when I get up in the morning, I open up my Starbucks app and order my coffee so that it's ready when I show up at the Starbucks. So that's who I am now. I show up at my job, my B2B job, and I don't turn that off. That is the exact expectation that I have when I show up at work. That is industrial consumerism. That's that is the expectation that's here today in the B2B world. So let's unpack it a little bit, and I think I'll start unpacking it by saying the title of this presentation is wrong. So industrial consumerism- the next generation customer experience. Next would imply it's down the road a little bit. It's a couple of years from now. Maybe it's five years from now. No, it's the now generation customer experience. This is the expectation that today's B2B buyers and customers have for their partners. And when we look at when we look at, you know, that expectation, we summarize it into five key capabilities that companies need to be thinking about in order to respond to that set of expectations.
Brian May: So when these five things are addressed, that customer would begin to have that experience that they have in their B2C life. So first one. It's all about engaging the customer digitally. That may be selling stuff to the customer through an e-commerce channel or a digital channel, but it doesn't have to be not everything's going to be bought online, but it's engaging them through the entire end to end customer relationship lifecycle when they're browsing, when they're shopping, when they're engineering with you or designing the solution with you, when they're servicing that, getting service on that offering that you give them, when they're figuring what they do, when their product is in service. What do I do because I still have customers I need to meet? Maybe they're going to rent a piece of equipment or a product. So that they can still meet the customer's expectation. All the way to I'm now ready to retire that product that I have and find a new one. And the cycle goes on. They want to be engaged digitally throughout that entire customer lifecycle. Second, it's all about customer insights, I talked about this earlier, there's massive amounts of data out there. There's point of sale data, there's service history data, there's abandoned shopping cart data, you know, there's environmental data, there's data and information about the customer, their company, all of that stuff. You know, the expectation of the customer is that you get that information about me and you use it to help predict, predict the unarticulated need my need before I even think about what my need is. Clearly an expectation of the customer. Three you've got all this intelligence now about the customer. How do I use it to personalize the experience that customer has. Personalize the experience, you know, for years, for decades, for generations companies have been doing segmentation, customer segmentation. You know, I'm going to segment customers by geography, by size, by primary product that they offer or buy, by, by, by, you know, type of relationship we have with them. Segmentation is good, and we still have to do segmentation. The tricky part is today's to be customer, today's customer in general. Wants to have segmentation, but they want the segment size to be one, me, so it's me centricity, customer centricity, as we call it, it's really me centricity. How do I personalize the experience, personalize the interaction with that customer for exactly what they're expecting? And that's where the data and the insights come in. And then that's where things like recommendation engines and engines come in. So that's number three. Number 4 is about breaking down silos between sales, between marketing between those two and the after sales or after service or after-market functions, it's still pretty common. I bought a car back in 2015. I'll leave the OEMs name out. I traded it in 2019. Today, I still get pinged on stuff that they're trying to sell me for that car I traded in two years ago. So the silos have to get broken down. The seamlessness across all of these different functions has to get broken down so that it's a consistent experience across all those. And then 5 is it says automation or automated and connected sales processes. But it's really about how do I create something consistent and predictable and efficient, something that's very easy for the customer to consume. Something that they don't have to work for. Going back to my, going back to my, my, my DoorDash example, you know, they tell me before I have to ask that my hamburger is going to show up on my front door in two minutes. Why would they not want it? Why would that same person not want to know when their product is going to be the service on their product is going to be completed? So these are five capabilities that when companies get these right, they're going to be responding to these expectations that the customers have, we did some, we love doing surveys. You know, we love talking to companies. We love surveying companies because we want to really understand what's making them tick. So we did that on this topic. We talked to 500 industrial companies and these are companies cross size, cross geography, cross segments, you know, different type of manufacturing companies and others because we wanted a good cross-section of of, you know, response in terms of where companies are, where the market is on this stuff that we call industrial consumerism. And here's what we found out.
Brian May: So first of all, the good news 90% of the 500 companies that we talked to get it. They feel, yes, we understand this is exactly what our customers are expecting. We know there's value for them and and therefore for us, when we actually respond to this, they get it. The other interesting thing is 30% they feel these 500 companies feel that in average on average, 30% of what they sell in just a few years, not too many years from now, 30% of what they sell will be sold online digitally. So there's two points that I'll harvest from that. One is 30% is a big number 30% of your business going through a digital channel means you have to have a good digital channel to get that customer to, to go to find what they're looking for to want to buy. So the second thing that I take away from this 30% online sales is that 70% is a big number. So there's going to be a lot of stuff. You're never going to go online more than likely and buy a big mining haul truck, you know, but that doesn't mean that the customer doesn't want to engage in how that customer is, how that truck is designed for them, how they service it throughout its lifecycle. These are all really important things that aren't part of the actual buying process, but still very important factors in terms of responding to the customer and the expectation they have. So so 500 companies, for all intentsive purposes, they get it. They see the value that's being delivered. It goes way beyond just commerce. The other thing we did in this survey then was said, OK, if that's kind of where the market is, where are they in terms of progress against these, against these priorities? And we categorize we did our own segmentation of this group that we talked about and we segmented them into leaders. So leaders would be those companies that actively are pursuing this stuff and they're making progress and they're getting value. Their customers see the value and that's resulting in value for them. Strivers are those companies that are really giving it a shock, but they're running into some barriers, some type of a challenge, some type of an issue. Oftentimes, interestingly enough, it's not that they don't get it or that maybe the technology doesn't work. The technology works. It's more around the acceptance internally, the willingness for legacy sales organizations to move to the new stuff. So strivers going after it, but probably not making as much progress as they would like, and then there's the rest of the group, which is the laggards, that's the ones that maybe they've tried a few things, they've done a little bit of experimenting. But but certainly aren't getting the progress that they would expect. We then asked, you know, from a time horizon standpoint, when do you think you'll start getting this done? When do you think you'll have results that your customers will find interesting? You know, interestingly enough, only 7% said we're going to deliver results in the next one to two years. 58% said it's going to be longer than five years, which means if you're doing the math, there's probably 35 or so that are in the 3 to four year range.
Brian May: So what's the so what here? The so what is this stuff is real. Companies get it, they understand the need to do this stuff, but probably aren't moving as fast as they need to. You know, the opportunity is there. I mean, the companies that get this right first are going to win. These are the ones that are going to get the market share. They're going to grab the loyalty and are going to win. And of course, the flip side of that is there's risk if you don't do this because frankly, the customers aren't waiting around. This is their expectation and they're not and they're not waiting around. So that is that's kind of where we are again. You know, it's a really exciting topic. A lot of action happening. Need to light it up and get after a pace a bit more. But, but certainly very exciting. So thank you for spending a few minutes talking about what we certainly think is a very exciting topic. At this point. I'd like to ask Craig from Norfolk Southern to join me, and let's bring it to life with what's happening there, right? Craig, good to see you.
Brian May: So thanks for, thanks for taking a few minutes. You know, you just heard the last 10 or 15 minutes of what certainly we're seeing happening in the market. I know that Norfolk Southern has a transformation program going on. Could you talk a little bit about what you were hearing and seeing in the market where your customers were saying that resulted in you launching the program?
Craig Hudson: Sure, our customers are saying a lot of what you just said. They want flexibility in their supply chain, obviously for the issues going on today. They want sustainability, which is becoming a very important part of their supply chain to have zero carbon footprint. And they want us to be easy to do business with, right? That's providing an effortless experience, which is the Amazon effect, as you may have called it, a DoorDash effect. Yeah you know, our customers have choices. They can ship either truck or rail, and we want to be that preferred supply chain solution partner. So that is at the core of our digital strategy is, how do we become much easier to do business with and provide a consistent transportation service to our customers customers, as you say, they want to make it easy. Where's my rail car or rail car? Deliver it and make it easy for us, and that's where we want to go in the future. That's industrial consumerism.
Brian May: That is that's awesome. That is. So can you tell us a little bit about the program? What are the different dimensions of the program and how you're attacking the problem?
Craig Hudson: Sure talk about a couple of things for us. First, I want to mention our sustainability program, which we've really taken off. As I mentioned, supply chains, there's a lot of companies that are looking to supply chains to supply a zero carbon footprint. And we take a look at the railroad. One intermodal train can be upwards of 300 trucks off the highway, and that's a significant carbon advantage for us. And customers want us to go in that direction. And we are a couple of other more specific projects, initiatives we're working on around technology, the digital transformation itself. Redoing our entire customer experience on our customer portals. And this is exactly for the reasons you just brought up, right? They wanted easy. They want to get their information quickly and then they want to move on with their job. So one of the things we're doing there is what you mentioned about harnessing a lot of data. We've deployed technology on our site that a lot of large consumer sites use that track the customer journey. And when that journey has friction, we fix it quickly. And when that journey is successful, we amplify that. So that's a large initiative we're doing is to focus on the customer journey. Another initiative that's important to us is we're deploying mobile technology infrastructure to all of our train engineers and conductors. 185-year-old company and deploying mobile technology is quite a change. The reason we want to do that, reason we want to do this is exactly the UPS, Doordash, Amazon effect when you get a delivery delivered to you, right? That driver has a mobile device where they take the picture and record the event. So you get instant information about notification, about what's taking place. And that's what we want for our conductors. Our conductor supply the last mile of service to a customer, which you could say is probably the most important customer touch point because it's the physically getting the car to the customer. So we want them to be able to act like and be UPS drivers, so to speak. And the third one I'll touch on is actually a company we created with other leaders in the industry called rail pulse. And this is all about putting IoT devices on rail cars. At any given time, we have about 120,000 rail cars on our network every day and have IoT devices on every rail car to know where it is, what condition is, then what state is then will provide a lot of information and data for our customers.
Brian May: It's exciting stuff.
Craig Hudson: It is.
Brian May: I know that you also have some things going around or on pricing and you know how you're going to bring flexibility to how you're able to price. Can you talk a little bit about that and what makes you most excited about that part of the program? It's all very exciting to me, right? Yeah we have systems like a lot of industrial companies that are 25, 30 years old, right? Just moving to a modern system such as PROS integrated with a new Salesforce Salesforce platform is very exciting to us. The PROS platform, is part of a transformation that we call deal modernization, it's all about modernizing the deal structure, everything from opportunity management, which we leverage Salesforce to the pricing and publishing, which is PROS to contract management all the way to customer onboarding. And so PROS plays a significant piece of that. Specifically around PROS, a couple of things I'm very excited to have. One, believe it or not, is more real time quoting and rate returns. With 25-year-old systems, they have a lot of manual input and to get a quote back to a customer can sometimes take days. Yeah, right. So the ability to get that instantaneously, which is what our customers expect based upon how they consumer life is what we want to deliver. I'm really looking forward to PROS delivering that. The second thing is I'm really looking forward to is PROS AI engine on pricing. I'm really interested to see how this goes. We have some of the best and brightest market managers who determine pricing, and they're still going to be able to do PROS to calculate pricing their way. But with the AI functionality of PROS, they'll be able to have a price to compare against theirs. And if there's a material difference, right, what I want the pricing manager to say is, OK, what do they see that I don't what is out there going on in the market that I may not pick up on? And that's going to be super exciting for us. That's really an interesting dimension to this, which is how do you bring the technology and the AI and the human kind of interface together to create something that's, you know, special for the customer?
Brian May: Yes so how are you? How are you executing the project? Let's talk a little bit about agile. I know that that's a pretty common way to approach these and probably the way that everything should be approached, but could come with a few tricky things. Can you talk a little bit about how it's being used at Norfolk Southern and maybe what impact it's having on maybe beyond the program, just even culturally how you approach some things?
Craig Hudson: Sure sure. I've been in Norfolk Southern two years. So before this, I led an agile transformation at a pharmaceutical company. So coming in Norfolk southern, we were just starting our agile transformation process. And I feel agile is absolutely necessary and critical to drive digital transformation. You may can do it without, but you're going to end up repeating yourself quickly after that. So a company such as Norfolk southern, where the majority of the employees are lifers, they started there out of school, been there 20 five, 30 years. That type of cultural change is, is, is quite a lift and it's what we've been focusing on. And this would be my recommendation for any industrial company who is like in our shoes. You got to get the culture right. You may hire and we did agile coaches to come in and say, you need to do scrum or you need to Kanban or you need to do scaled agile. And that's the process of it. Don't let that get in the way. Right? put that aside focus on the culture side of it, right? And the mindset of the employee. About 25 years ago, 20 years ago, at the start of agile, a lot of very smart people created the 12 principles of agile right. And they're timeless. They're still very relevant today. Things such as we embrace change for the sake of customer, right? Things such as we empower our teams business and IT work together day to day. These things are just almost common sense today, but in a company of 185-year-old company, that hasn't always been the case. So if we get the culture right, you'll get the rest of it right too.
Brian May: Yeah, that's awesome. I mean, if you think about what you just said, going back to a couple of things I talked about around this thing that I call the growth pivot. If you double click into growth pivot, you'll never hear or see the word agile, but you'll hear all the stuff that you just talked about. How do you how do you pivot the culture to be able to do things differently than they've always done forever? And it's tricky. It can be tricky. So excellent. So Craig, thank you for spending time with us today. Your responses were very insightful. Your thoughts were very insightful. I'm sure our audience finds that the same way. So thank you again. And Thanks to everyone that spent the last 20 minutes or so with us. Hopefully, you found this industrial consumerism topic to be exciting and interesting for your company, so thank you again.