Embrace Self-Serve to Win in the Digital Era
Digital selling is the highest priority topic around many conference room tables today. Executives are questioning how they ready their organizations to sell digitally. Whether your company is B2B or B2C, it has to sell effectively via digital channels. While some may think this is a discussion for tomorrow, we believe it is a conversation for today. The future is now. Join Andres Reiner, President and CEO of PROS, as he discusses the digital selling imperative.
About the Speakers
Andres Reiner joined PROS in 1999, appointed to his current role in November 2010, and today also serves as a member of PROS board of directors. Reiner has led PROS to record revenue growth, fueled by his vision and strategy around innovation, customer success, and helping people achieve their full potential. Under his leadership, the company has expanded its global reach and scale, introduced numerous new products, entered new markets, grown its partner ecosystem, completed three acquisitions, and more than doubled the size of the PROS team.
Jody Fales serves as VP Digital Solutions for Anixter. Digital Solutions is transforming customer engagement for competitive advantage at Anixter — enabling and innovating services through a suite of digital solutions to attract, engage, and connect customers. Digital Solutions delights customers through frictionless transactions and project/program simplification delivering value and freeing our customers to focus on their core businesses. As technology and world events continue to accelerate Digital as a critical business capability, Anixter is accelerating our leadership position in web, materials management, and integration capabilities. Fales joined Anixter in 2015 as part of the acquisition of the HD Supply Utilities and Electrical division, providing leadership in various IT and commercial roles including product data management and as VP of sales and marketing technology platforms. Fales holds a BA degree from the University of Florida where he graduated cum laude. In addition to his professional responsibilities, Fales is involved in public service having most recently served six years as a board member for Habitat for Humanity of Greater Orlando.
After studies and a Ph.D. in mathematics, physics, computer sciences, and economics, Jochen Göttelmann started his professional career as a software developer at Dresdner Kleinwort Benson. After several IT positions in reinsurance and IT consulting, Göttelmann spent 12 years at Allianz Global Investors before he joined Lufthansa Cargo as CIO in 2015. Göttelmann’s career has been in IT with a high business focus, dedicated to applying technology to enable business and drive digitalization.
Jacky Wright is a transformational global leader, innovative technologist, and recognized STEM advocate. She is a senior executive whose extensive career spans multiple industries. As Chief Digital Officer and Corporate Vice President of Microsoft US, Wright inspires and leads teams to drive innovation, adopt sustainable and accessible business models, and digitally transform. In late 2017, Wright took a civic leave from Microsoft to join HMRC as their Chief Digital Information Officer, leading one of the largest digitally-enabled transformations in Europe and the technology decisions underpinning HMRC’s EU Exit plans. Her strategy choices will help deliver HMRC’s ambition to become one of the most digitally advanced tax authorities in the world. Wright has been widely recognized for her many contributions in technology and diversity, including an honorary doctorate from Aston University, inclusion on Britain’s Powerlist 100 of Most Influential People, the Top 100 BAME Leaders in Business, and Savoy Magazine’s Top Women list. She has also been featured in numerous publications, including CIO Magazine, “Meet a tech industry pioneer who leads by example” and the Wall Street Journal – CIO Journal. Wright is a member of the Board of Directors for nVent, Board of Trustees for Harvey Mudd College and Prostate Cancer UK, and serves on the Board of Year Up – Puget Sound Chapter. She also serves on various advisory boards, including the HP Women’s Innovation Council, the Demo CIO Council, and the CIO Winmark Advisory Panel.
Peter Sheldon is a well-known industry expert in eCommerce and omnichannel technology, having previously held the role of Vice President and Principal Analyst at Forrester Research. He spent five years leading Forrester’s global research on digital commerce technologies, helping to challenge the thinking and lead change for eCommerce executives undertaking major digital transformation and commerce technology programs. Today, Peter leads commerce strategy for Adobe.
Jennifer Dudley leads the Configure Price Quote (CPQ) Process & Capabilities team for Hewlett Packard Enterprise’s Customer Operations organization worldwide. Dudley’s team is responsible for the development and delivery of product configuration solutions for HPE’s partners and sales team, including weekly launches of new and sustaining product introductions. Dudley is also responsible for HPE’s quoting solutions, including big data pricing analytics to guide sellers and special pricing for must-win deals. Dudley has more than 15 years of experience in the technology industry and had served as the director of HPE’s Knowledge Engineering Services team since 2018. In that role, she is responsible for transformation programs and tools to enable HPE to rapidly win business while managing against margin, revenue, and portfolio goals. Prior to that role, Dudley held program manager and IT team lead roles at HP focused on automated business process management and CRM. Jennifer holds a degree in Computer Science from Principia College and an MBA from Washington University in St. Louis. She is based in Seattle, Washington.
Andres: Hello, and welcome to Outperform 2020. I would like to start by thanking all of our customers and partners for your amazing support of PROS. I love having so many of you from around the world with us here virtually....
Andres: Let's take a look at who's joining us. We have over 3,400 registrants representing nearly 90 countries, 29 industries and over 800 companies generating 4.7 trillion in revenues. What an incredibly diverse group. We're excited to share what's new with PROS over the next few days. I'll start by sharing some incredible new innovations.
Andres: Innovation is core to who we are. We've always innovated ahead of the market to make sure you have the technology you need to compete and win. We're excited to showcase amazing new innovations, with other 400 new features to help you win in the digital era. We're showcasing our next generation user experience, with other 130 Remagine screens and workflows, based on a UX that included over 1,000 of our users.
Andres: I wanted to take a moment to thank all of the amazing customers that participated in this UX research project which was our largest ever. We're also launching our next-generation dynamic pricing for digital commerce, which is going to revolutionize omnichannel commerce for B2B and B2B2C. I'm also super excited to launch our partnership with Adobe in our new Magenta accelerator, which will bring the power of PROS omnichannel commerce to all Magenta customers around the world.
Andres: We're also launching the next generation dynamic pricing for airlines, which now supports a class-free world, which is another first in the industry for PROS. We're also excited to share these with you, as we're laser-focused on innovating in areas that will help you win today. So now, let's take a moment to reflect on 2020. You know, 2020's not the year that any of us planned for. It's a year that's been hard at a personal level for us, or families, or people and our customers. It has stretched us in many ways, and it's given us the opportunity to grow as people, companies, and as a society.
Andres: We're also committed to supporting our customers whether you're thriving or recovering. We have seen customers come back strong through difficult times. And just as in the past, we're going to emerge stronger together. This disruption is challenging all of us to rethink what's possible. And we have to lean into that. Let's take a moment to see how this disruption creates an opportunity.
Andres: : Let's put in perspective one data point. US e-commerce penetration went from 16 percent at the end of 2019, to 33 percent in April of 2020. Think about that for a moment. We shifted more in three months than we did in the last decade. Data point number two. We recently partnered with Hanover Research to survey B2B buyers. We found the number of buyers doing the majority of their purchases through digital self-serve channels rose from 28 percent last year to 40 percent today. We have seen years of digital selling acceleration happen in months.
Andres: And finally, what are we seeing among our very own customers? Take Saint-Gobain Glass as an example. Pre-COVID, 10 percent of their sales went through e-commerce. Post-COVID, 80 percent of their sales are going through e-commerce, powered by PROS Smart CPQ. That's an incredible shift. A transformation that we frankly probably wouldn't have thought it was possible. And a shift that creates an incredible opportunity for us to gain share if we embrace the self-serve imperative.
Andres: So what is this self-serve imperative? It's about meeting buyers where and how they want to buy. And our own personal experiences are shaping how we want to buy. This bar is raising every day. And whether you're B2B or B2C, if you're not leaning into self-serve, you're at risk. We're entering an area where the expectation is that companies are self-serve first.
Andres: Let's talk to two tech visionaries about what they're seeing in the market. So I'd like to welcome Peter Sheldon from Adobe, and Jacky Wright from Microsoft. Great to have you here at Outperform. Thank you for the amazing partnership and for being here with us today. I'd like to start, if you could each briefly introduce yourselves, your role within your company, and tell us a little bit about you. Peter, do you want to start?
Peter Sheldon: Sure. So Peter Sheldon. I am the senior director of commerce strategy at Adobe. So my role is really helping Adobe with understanding, where is commerce going? It's a very forward-looking view into 2025, 2030, to say, how is commerce going to evolve in terms of the way that buyers will interact, the automation that will drive those experiences, et cetera. And I think it's been a very fascinating time, especially with all that's happened with COVID, because a lot of those predictions and visions of how we saw it evolving are really coming true faster than we had previously predicted.
Peter Sheldon: That's my role in Adobe. I've been in the commerce space for many, many years, having previously been an analyst at Forrester Research, where I covered the commerce technology space.
Andres: That's great. Jacky, do you want to briefly introduce yourself?
Jacky Wright: Yeah, thanks for having me. So I'm Jacky Wright. I am the chief digital officer for Microsoft's US business. And when you think about my role, it is kind of twofold. One is to enable the sales force to sell digitally, transforming our customers in their outcomes. And the second piece is to build deep market-making capabilities for our customers through transformation.
Andres: That's great. So what are both of you seeing today in the market? I talked a little bit about how we've seen an acceleration of movement into digital? We've seen in in B2C, we're seeing it in B2B. I'm curious to see, what are you seeing?
Peter Sheldon: I think on the Adobe side, you hit the nail on the head. It's this word acceleration. We've seen both existing customers as well as prospects really change our priority as it relates to digital transformation, especially if it relates to commerce projects, we've seen investment in commerce technology be really moved very much to the top of the priority list, especially as it relates to capex investment.
Peter Sheldon: And I think one of the biggest things we've seen from our prospecting customers is a real focus now on, how do we get this done quickly? We can't procrastinate. We notice, there's this sort of acceptance now that digital transactions, it's not just the future. It's the now. Whereas before, perhaps it was the future. And how do you accelerate moving the future to now? And everyone's, I use the word scrambling a little bit to say, how do we realize that vision as soon as possible?
Jacky Wright: Yeah. And I'd like to add to what Peter said. The whole notion of accelerating through digital is the way, right? So you want to be digitally first, and I think when you think about where companies are going, there have been some that have been on this journey. You can look at the banking industry, where the changing customer behavior, contact-free, and the expectations, have changed the way banking works.
Jacky Wright: And so that has only now just accelerated due to changing things such as the pandemic that has caused interrupted supply chain. This whole notion of contact-free is now in a whole new way. And so forcing companies to now think about how to do it in an accelerated way.
Andres: Yeah. And as you talk about, this buyer expectation has changed dramatically, if we think about both B2B and B2C. What's your notion... typically B2B and B2C believe they're very different. What's your perspective on that?
Peter Sheldon: I think my perspective is, that was definitely the notion in the past. I think they're now starting to realize, especially on the B2B side, that they're not as different as they thought they were. Yes, there's all these nuances, yes, there's all these complexities. And perhaps the actual end part of that customer buying journey is a little more complex. But if you look more the up-front of that customer buying journey, I think most B2B firms are realizing that they need to take a page out of Amazon's playbook and recognize that a lot of their buyers, their customers today, are Millennials. And those Millennials are absolutely not just used to B2C buying experience, but they absolutely demand it. They expect it to be mobile only, mobile first. They expect it to be fast, intuitive, and 100 percent digital.
Peter Sheldon: And I think the B2B firms are finally waking up to that, that some of their legacy processes and old ways of doing things just don't resonate anymore.
Jacky Wright: And to your point, Peter, that was the case. People were recognizing that. But this convergence of Millennials and their changing behavior and patterns. And now digitally selling with an Alibaba, as an example, when you look at that and you think about the whole supply chain, the whole supply chain now has to be closer to the customer.
Jacky Wright: So whether you're doing a config price quote, so that you get the price immediately... end of your supply chain, everything now has to be digitally enabled.
Andres: Yeah, absolutely. Why do y'all think... so it seems pretty obvious that the world is moving to digital. It seems pretty obvious, both our B2B data and our B2C data shows that customers want to buy in a self-serve model. So why haven't more companies, especially in B2B, embrace this new digital first self-serve model? What's holding them back?
Jacky Wright: So I would say there are a couple of things. And Peter, feel free to add in. I think there's an element of culture. And so when you think about the culture in a typical organization, you've got everything from a Zoomer to a Boomer in there, and how a company engenders the ability to understand and think differently, hinges on everybody participating. And so the culture of your organization is a big one.
Jacky Wright: I also think it's how you think about moving to digital in an accelerated way. And if you have the legacy systems in your environment, that ability to move fast is hindered. And so you need to think about, how can I move at an accelerated pace, and at the same time, look at my infrastructure and what I have there to be able to do that. Peter, I don't know if you agree with me.
Peter Sheldon: No, 100 percent. And I think the only thing that I would add to that is, it's not just the culture and some of the technology constraints, but I also think that sometimes digital in the past has been perceived as an internal threat. So I'm talking specifically about channel conflict. We've got people in the sales organization that say, "Hey, well digital's going to be the place that all of our customers are going to place all their orders, what does that mean for my field and all my sellers?" And I think for a lot of manufacturers that obviously traditionally have had a distribution channel, there's a feel of, we're selling direct now, and we're selling through digital tools. What does that mean, if 98 percent of our sales come from our distributors.
Peter Sheldon: So there's always been a channel conflict fear in the past that I think hasn't necessarily stopped firms from experimenting and doing PLCs and sort of experimenting with digital. But they've never had that confidence to dive in the deep end. And I think what COVID has done is really changed that mindset and said, look, it's do or die now. We have to jump in the deep end, and we have to accept the reality that yes, this may create some channel conflict, but we're going to have to face it head on now.
Andres: Yeah, and then, do you think Peter and Jacky, it's really not just about the channel conflict, it's really about the end customer experience, and that customers may traverse different channels. And how's that playing, if you're not there, if you're not accessible in a digital channel, you may not be able to sell your products. You may not be able to capitalize on the market opportunity. How are companies thinking beyond that? And then potentially this shift of both B2B and B2B companies becoming B2C and direct-to-consumer as potential models that they apply to ensure they're relevant within the market?
Peter Sheldon: Yeah, I think we certainly see a lot of B2B firms now seriously looking at a direct-to-consumer model and saying, the best way to understand what the modern consumer wants from that digital experience is to have a direct relationship with them and sell directly to them. And so in that mindset, I think a lot of them are experimenting with new brands, new direct-to-consumer product lines. And they're doing that really just trying to understand this brave new world. And to build that direct relationship with the customer to get all the analytics, and the customer's buying behavior, and feed that back into their product or to actually help them accelerate the evolution of the products.
Peter Sheldon: And they're really realizing that there's a huge amount of benefit that they can realize by having that direct-to-consumer, not just selling model, but that digital engagement. So yeah. There's definitely a newfound set of enthusiasm for at least experimenting with the direct-to-consumer model.
Jacky Wright: Yeah. And I would characterize it as meeting the customer where they are. So when you think about the virtual experience and how a customer buys today, it is changing. And so you're only as good as meeting the customer where they are.
Andres: Yeah, I love that. It's absolutely right. It's being where the customer is when their buying journey begins, and helping to support them. So how do y'all recommend for companies to get started? Because I know some companies struggle with how to get started in this movement. Based on your experiences, how do you recommend them to get started?
Jacky Wright: So I would first start out by saying that every company needs to see themself as a digital company. Because if they don't start with that mindset in mind, they will be irrelevant. So this notion of digitally first, in how you think, how you work, how your supply chain works, that is first all about mindset. And then when you move from mindset to actually doing PLCs and really driving not just new product integration, new product introduction, but also thinking about your whole supply chain. It's how do you make sure you get the right people involved and engaged, inclusive, to be able to think differently about doing that?
Andres: That's great. Yeah, Peter?
Peter Sheldon: The only follow-up I was going to add to that was, I think again, it's about trying to market. I think firms are realizing, we've got to dive in the deep end, we've got to try this. So let's not do a two-year implementation project. What can we get live in two months? How can we find a product line, a channel, how can we digitize it and get learning? So it's all about, let's get feet on the ground. Maybe some of this is new to them, but it's like, hey, we just got to embrace, and let's get out there on the front lines and see what this means to our business.
Andres: Yeah. And I believe all of us have been innovating to help companies drive this fast time to value, and allow them to get started quickly. And I mentioned in my opening about our new Magenta accelerator that we just launched, and I'm excited about that, to really be able to power this real-time pricing capabilities to all B2B sales opportunities, and be able to drive it fast time to value. Which is critical to win.
Andres: In terms of the future, we're barely scratching the surface of what digital can do to help transform sales. What do you think the future holds?
Peter Sheldon: I think we'll see more automation in the sales process. I think with AI and machine learning, I think that vendors, manufacturers, distributors, can get a lot smarter about not just personalizing the buying experience, but really making intelligent recommendations to the buyers, and maybe even predicting what the buyers need, and placing orders on their behalf. Especially again, as we get into replenishables, consumable products, spare parts. And really take that burden off the buyer, [inaudible 00:19:13] automate that.
Peter Sheldon: So I think that's one area where we'll see more automation in the buying process.
Jacky Wright: Yeah, I would add that as you think about the ability to be agile, how does it change, and look at the pandemic and look at what it's done. Your whole supply chain is changed now where you have to think about in region, for region. How do I adjust? How could I predict and anticipate the things that are going to happen relative to customer buying behavior and the sales process?
Jacky Wright: And I think the point about AI and using data and analytics to really anticipate seeing around corners and help you be more agile, accelerate and create new products is the way.
Andres: Thank you very much, Jacky and Peter. It was amazing to have you here at Outperform 2020. We're excited to be showcasing our joint solutions and our virtual demos at Outperform 2020, and we look forward to continuing to innovate together to help our customers win in this digital era. Really appreciate it, we're very grateful for the amazing partnership. So thank you, look forward to seeing your soon.
Andres: What an incredible panel. It's clear that we have to win at self-serve. And at PROS, our mission is to help people and companies outperform. We've innovated for decades to help companies compete and win in the digital era. So here's what we believe is needed to win in a self-serve world, and how we've innovated to power self-serve commerce.
Andres: We've innovated on products like a real-time pricing engine so that you can respond in real time and on demand. We've also innovated on solutions like our Smart CPQ and our travel retail platform, as well as deep AI capabilities that allow you to deliver extreme personalization at scale. And these solutions allow you to deliver a consistent omnichannel experience, whether it's online, partners, direct sellers, or marketplaces. We enable you to deliver a digitally connected sales experience. All with our passion and commitment to helping you win in a self-serve world.
Andres: I'm excited to welcome some of our amazing customers, so they can share their journey on how they've brought self-serve to their markets. I'd like to welcome Jennifer Dudley with HP, Jody Fales with Anixter, Jochen Göttelmann with Lufthansa Cargo to share a little bit about their stories. Welcome. I'd like to first start with each of you sharing a little bit about your roles in your digital selling journey. Jen, would you like to start?
Jennifer Dudley: Yeah, I'd be happy to, Andres. Thanks so much for the opportunity to be here and share a little bit about the work that we've been doing with PROS. So I am currently the leader of the processing capabilities at Hewlett-Packard Enterprise within our configure price and quoting organization. The responsibilities there are really focused on taking our enterprise business, so servers, storage, networking, and being able to enable our sellers and channel partners to quote and delight, excuse me, delight customers.
Jennifer Dudley: So the business that we've been managing with PROS is between 12 and $14 billion of revenue under management to date, over a program that has spanned about seven years so far. And the last frontier that we've been focused on recently in our engagement with PROS has been really enabling self-service for our selling teams.
Andres: That's awesome. Thank you Jen. Jody, would you like to share a little bit about your organization and your role?
Jody Fales: Absolutely. Thank you Andres. So I'm Jody Fales. I have the privilege of leading our digital solutions team for Anixter, which is really about connecting our customers with all of our services and solutions inside the business, through three primary areas. Is through our website capabilities, our integration capabilities on how we connect customers in ways that make sense to them to our business, and to materials management solutions. And we've just seen a tremendous ramp-up over the last year and an acceleration in 2020 as customers are shifting and adopting these solutions.
Andres: That's awesome. Thank you, Jody. And Jochen. Would you like to share a little bit-
Jochen Göttelmann: Yeah. I come from Frankfurt in Germany, so I have the pleasure to oversee the IT department at Lufthansa Cargo. Lufthansa Cargo is the air freight division within Lufthansa Group. We're a group of our own with about 15 subsidiaries all across the world. And we take care about all of the logistic business in Lufthansa.
Jochen Göttelmann: Lufthansa, as you probably know, consists of major brands like Lufthansa themselves, but also Swiss, Austrian, and Brussels, and a couple of other smaller European airlines. And our business model is basically a combination of freighters and the [inaudible 00:24:47] of the planes. And at the moment, I'm maybe dedicated to drive especially our sales, IT into the next decades. So with the replacement of a couple of legacy systems, but also the introduction of major process and innovations to [inaudible 00:25:07] of the air freight industry.
Andres: That's great, Jochen. Thanks for sharing, and we're proud of our incredible partnerships with HP, Anixter, and Lufthansa. Lufthansa spans over 30 year relationship. Excited to have all of you here today. Jen, you have a pretty vast partner community, and I know you've put a lot of effort in your organization on how you support them. How have you seen that change today, in any potential changes in the future?
Jennifer Dudley: Yeah. That's a good question, and just to follow up the previous comments, I think we have been on a transformation journey for several years now, to really enable both our partner community that consisted of about 30,000 different partner users that are engaging with us on pricing and quoting, and our own sales teams to really be able to realize the promise of faster and simpler quoting to deliver a real-time response back to customers.
Jennifer Dudley: And I think in current environment, we've been able to really realize the opportunities that the pandemic and some of the constraints with our competitors, supply chains, and even our own presented by being able to bring back to that self-service quoting motion a real-time price that reflects the puts and takes from costs that we saw with components coming into Q2 and Q3, and to be able to really respond with a variety and an increased volume of quotes. We saw the number of quote records that were produced both by our channel partners in a self-service motion in sales and a self-service quoting motion, really increase as businesses needed to react to the updated infrastructure needs.
Andres: Yeah. It's interesting Jen, we've seen from many of our customers that really, there's a lot of changes happening parallel. Your costs are fluctuating. Your channel and your customer mix is also fluctuating. So being able to support this in real time is probably more critical than ever. There's more change that's happening all at the same time and being able to adapt to that change quickly and in real time, it's clearly a must-have in this day and age.
Jennifer Dudley: That's absolutely right. And I think that we're seeing with the sophistication of our pricing guidance and self-service quoting that we're really able to make those changes real time rather than having to wait until the first of the month or on a quarterly refresh.
Andres: Exactly. And Jochen, you focus on taking Lufthansa Cargo to this self-serve world. You want to talk a little bit about what change in the market as you rolled out this new sales motion?
Jochen Göttelmann: Yeah. Actually, some people say that air freight is lagging maybe two decades behind the center of business. This means people still love to print out paper, attach it to their shipments, our clients are in the [inaudible 00:28:21] of a great [inaudible 00:28:22]. They still love to pick up the phone, asking our salespeople for a quote, asking for [inaudible 00:28:28], for a better quote coming back to us a day later, and finally negotiating over the phone, or even sending an email, just give me a price.
Jochen Göttelmann: And so, people are still... in air freight it's still a lot of people business. A lot of transactional business with human involvement. And this of course changed quite a lot in the past month. And then people were no longer able to meet in person, but only to call or email, and we see a rise in more self-service like transactional sales, be it with our direct website, direct [inaudible 00:29:19] without any involvement of a human being. Also some platforms are coming up, like Booking.com for air freight.
Jochen Göttelmann: And I would say it's a slow trend towards more digital and more machine-machine interaction, which has been truly and significantly sped up during the last month by the COVID-19 crisis.
Andres: That's great. And you see that playing a new role as you look forward, how's this self-serve going to shape the buyer's expectation and this need for real-time self-serve quoting?
Jochen Göttelmann: Yeah, the buyers want to have a quote, meaning a price offer which they can directly book. They do not want to wait for answering minutes or hours later, to an email or to a phone call. They want to have full transparency, also with our competitors. And of course they always want to have a good price in the sense of [inaudible 00:30:28]. But also really a price which gives them sense to our capacities.
Andres: Yeah, that makes total sense. And Jen, in this area of real-time demand, buyer's expectation is something that you've seen at HP. You want to share a little bit, what changes have you seen in this area, and how critical is it?
Jennifer Dudley: Yeah, that's right. We are also seeing certainly in a different industry, but a similar expectation from buyers, that we're able to respond. I think our top customers tell us they expect a response from us in two or fewer days, at least 80 percent of the time. And what that means from within HPE's configuration, pricing and quoting processes, is that we've had to really think about our strategy for meeting those expectations around a model that considers the low-touch and high touch pricing.
Jennifer Dudley: And so consistent with the experience that we were talking about in terms of a low touch experience, partners and sales reps on behalf of their customers expect that we can return back a price at which they can really win, or at least make good progress on the negotiation in real time. And at HP, we call that the instant price response.
Jennifer Dudley: But we also recognize that for some of the largest and most strategic deals, that further analysis and negotiation is necessary. And so for that, we reserve the capacity that we've been able to free up from the instant pricing, the low-touch motion, and use that really for a big desk and into finance negotiation. And although that takes longer, we have a much richer set of analytics, and a better starting point from that instant price than we had at the beginning of our transformation journey.
Andres: That's great. And Jody, I wanted to transition a little bit beyond thinking of your own e-commerce and self-serve. What about marketplaces? What's a critical role of digital marketplaces in the future?
Jody Fales: Right. So marketplaces have been around for a while. And as the technology becomes easier and cheaper, everybody's getting into the game. Suppliers are getting into marketplaces, our customers are establishing marketplaces. We're establishing marketplaces, right? So currently today, Anixter is connected into more than 12 currently, that we offer the ability to see curated catalogs to provide pricing and inventory information for our customers to help them in the purchasing journey.
Jody Fales: So I just think it's going to be expanding more. And the key for us in the future is, how do we stitch the value chain across the full supply chain and make it even easier and fuel it with more information, and actual information for customers to make better and better choices?
Andres: Yeah. That makes total sense. And Jen, I wanted to cover an area. There's a lot of companies that worry that as you move to self-serve, it creates channel conflict. This is a very common topic. And I wanted to get your perspective since you're far along on this journey.
Jennifer Dudley: Yeah. That's right. So this was, I would say, a concern at the beginning of our journey. And we've really worked with a process end to end that allows us to address that from the start. So our pricing guidance and self-service quoting is delivered through what we call an integrated quoting system. It really starts with the partners logging an opportunity in Salesforce.com, our CRM system, and then they can optionally register that opportunity as a new business benefit through a process that we refer to as deal reg.
Jennifer Dudley: One of the benefits of that deal reg process for new business opportunities is the ability then to escalate for pricing. And I talked earlier about our low-touch and high-touch strategy. So we are willing to give an instant price to any partner who has access to the integrated quoting process. But we are only really differentiating that pricing then that we give once the deal has been registered, the partner is investing in that opportunity, and we further differentiate the pricing that we offer through the escalated or high-touch process.
Jennifer Dudley: And so really a lot of those concerns that we may have had at the get-go have been relieved by the consistent execution of this process. And honestly, the transparency that we're bringing in the instant price delivery across all of our partner opportunities.
Andres: That's great, Jen. Thanks for sharing that. And Jochen, I wanted to... you lead the cargo area, but I wanted to get your perspective. The Lufthansa Group has led the way in this area of self-serve on the passenger side as well. Wanted to get your perspective on any changes on the passenger side of the business.
Jochen Göttelmann: Yeah. It's a very, very good question, and it's an extremely important topic for our [inaudible 00:35:41] the penchant business. So in some sense, we would like to regain the direct relationship with our clients. So in the past years, we had a lot of travel agency online or established ones, or booking platforms, stepping in between us and the clients.
Jochen Göttelmann: So we still, of course, know the name of the client, but we don't know anything about his personal preferences, about his potential for auxiliary services. And we would like to get the direct connects with the client back by incentivizing booking directly via out web page, so that we directly can add additional services, sell better seat, sell better mutes, whatever. And also, really create a long-term relationship with the client instead of just getting transaction by transaction from the booking platform.
Jochen Göttelmann: It's also a question of cost, of course. We have seen the so-called JDS Group, computing systems, adding pretty expensive fees on all the bookings, which is again, a competitive advantage for us compared to low-cost airlines. Whenever they're showed with the JDS systems, like our deals or so, and they all do everything to regain the client relationship back from the platforms.
Jochen Göttelmann: But of course it's a little bit trickier, and sometimes even a dangerous game, of course. The platforms are not your enemy, they are sort of a safe channel. And you have to somehow find a good working mode with them, using them, but also not giving up the full relationship to them.
Andres: Yeah. But you've innovated quite a bit being able to support through your direct channels. Any marketplace in as well on the group side has been another area that you've innovated that traditionally was high-friction deal desk oriented, very typical B2B. And today, you can actually book a group of 40 people with the same passenger experience.
Andres: So this has been areas that the Lufthansa Group has put a lot of emphasis on, the in customer experience and learning about their preferences, and allowing them to do business the way they want to operate. Which is great to see that leadership decision.
Andres: So now I'd like to talk a little bit about the role of the salesperson, and how that's changing. As we move, we've talked a little bit. Everything's moving to self-serve and digital. So how's the role of the salesperson changing? And I thought, Jody, I wanted to get your perspective on that.
Jody Fales: That's a great question, Andre. I think it's part of the secret sauce too, on how we're going to be successful with digitization. So when we think about serving customers, our lighthouse has always been technology when you want it, people when you need it. It's a digital first approach. And we think of digital like a virtual assistant for the sales team. It isn't something to be feared or avoided. It's not going to take away your job. It's a tool that helps you be more efficient.
Jody Fales: So as we continue to expand our digital footprint throughout our business, we want to be able to continue to fuel our sales team with more and more transparency, more automation, connecting them to very actionable insight, that at the end of the day, enables a pivot in shift from administrative activities to more complex and rich discussions that really help to solve customer problems. And we take away the burden of, where's my order? What's the price of this individual piece?
Andres: Yeah. It's really moving the role to be more strategic, more evangelist role of helping to support customers, but still allowing customers to move to digital. So in terms of as we roll out these capabilities, obviously self-serve is better for the customer, because they feel they're in control. How about the value side, and the value measurement for your businesses? Anything you could share? Jen, if you wanted to start?
Jennifer Dudley: Yeah. So in order to understand the initial implementation and the potential for further deployment within HPE, we really started this journey with a pilot and control group where we were able to measure the impact of what for us was a deal pricing operation initiative. In that measurement, we were able to establish a 200 basis point improvement for the pilot group versus the control.
Jennifer Dudley: And as we continued to expand our deployment, we were able to show that we were scaling that benefit. As we have made really the pricing guidance part of the way we run the business, of course our pilot and control measure has gone away. But I think what we've seen most recently with self-service that's been so exciting for us, is a strong correlation between a faster time to respond on quotes, so what we call quote turnaround time, and our ability to win the business or our win rate. And where we look at a segment of the partner population, we see that when we can bring that turnaround time below two hours, which is really the window where our instant price plays that we see approximately a one percentage point win rate improvement. So really tangible results from both the pricing standpoint-
Andres: That's pretty significant. One percent improvement to win rate, and then you talked about 200 basis point on margin. That's pretty awesome. And Jody, anything you could share?
Jody Fales: Sure. I think in terms of maybe two macro metrics for us. One is the ability to win business. And I'm thinking broadly across all of our digital services. In Anixter, we have an excess of a billion dollars of our business supported by one of our digital channels. You don't come to Anixter to buy digital. You don't come and say, "I'd like to purchase access to your website please." But it's removing the friction and making it simple, often times offering custom solutions or tailored solutions at the customer's place of business that allows us to serve them in ways that differentiates us from the competition.
Jody Fales: So clearly we're doing a good job on the revenue side. And we're going to retread this a little bit, but the productivity piece, the ability to, I'll call it manufacture headcount by taking self-service, giving it to the customer, which adds value to them, because they now have access 24 hours a day to all of the information. It takes the load off of our internal teams, and it allows us to pivot that to other value added selling. We've manufactured, if you will, dozens and dozens of headcount to that capability. So we see value across the organization as we move to digital.
Andres: That's awesome. Jochen, and I know you're initiative is fairly early stage. Any early indicators on value that you believe this initiative-
Jochen Göttelmann: Yeah, definitely. We now really start to understand much better the price sensitivity of a client. So when we lose a transaction, when will we get the shipment? And this is yet on [inaudible 00:43:24] relation design, but it's the logical next step from learning on the price sensitivity of a client to the next step, which is then making better proposed, proactive proposals, not just waiting for him to call us or to ask from a quote. Offering spare capacity anticipating these demands. Maybe we see clients who always have a couple of urgent shipments over the weekend. And giving them a proactive offer and then finally combining that also with an overall CRM process. And then it makes a good story for us from pricing to active offering for the full client life cycle management of the CRM topic.
Andres: That's great. Thanks for sharing that. So as we try to close this conversation, I wanted to end on what you see the future. Clearly all of you are leading the way. But I wanted to get a glimpse of what you see the future evolving to. Maybe I'll start with you, Jen.
Jennifer Dudley: Yeah. So I think we continue to look for ways to make this experience of quoting faster and simpler for our customers. And the next frontier for us in that journey is to deliver a mobile experience, so bring the pricing guidance and the insights that we have for demand steering to a mobile device that can be used both by those who are already doing self-service today, and also to reach a broader swath of the sales teams that today may still be relying on inside sales reps to do some of the administrative work for them, really having that conversation in real time with the customer with a mobile device in their hand.
Andres: That's great. Jody, you want to share a little bit about future?
Jody Fales: You bet. And I'm going to key off, Jen, what you said about faster and simpler. For us, it's continuing the journey to get more personal, and to remove the friction in the buying experience, and finding opportunities, frankly, to solve customer problems, maybe in a more unique way.
Jody Fales: And for us, part of that is just providing greater transparency to the full supply chain. It isn't just about Anixter. It's our thousands of partners, and how do we look like a much larger organization to our customers? Because frankly, we have access to it, we just don't look that way when you come onto the site. So how do we give broader transparency throughout the cycle to the customer?
Jody Fales: And frankly, making it simpler. How do we invoke more things like chat box to get more Q&A with a customer, versus going to a traditional website and clicking through pages, as an example? So there's quite a few things we're looking at.
Andres: So we're just scratching the surface on what's possible in a digital world. It's great to see. Jochen, wanted to let you share anything as you're evolving your vision and your strategy.
Jochen Göttelmann: Yeah. An important aspect is indeed connectivity and transparency, end to end. So we as an air carrier, we only can transport from airport to airport in the end. The client wants to have some shipments from his [inaudible 00:46:41] from his yard to the final consignee. So this involves much more parties. So it's all about connectivity, seamless connectivity, without lots of data, but enriching data along the transport chain, and giving the client transparency, and in that sense, also giving us a little bit of connectivity to the true shipper, and not only to the intermediaries. So it's all about connectivity and transparency in the supply chain.
Andres: That's great.
Jochen Göttelmann: [crosstalk 00:47:14] pricing ends of booking.
Andres: That is great. Thank you all. Jen, Jody, Jochen, for the amazing partnership that we have. We're so grateful to you. You've really pushed PROS to continue to innovate, and we're excited to have you as amazing partners. Look forward to seeing you soon, thank you for sharing your stories at Outperform. We're grateful.
Andres: In closing, you have to embrace self-serve to win. If you've not started on this journey, consider today, right now, the first step. If you've already started, let today be the moment you choose to accelerate. And use this event to give you the knowledge and solutions to embrace self-serve. Let's make 2020 the year that disruption creates an opportunity for all of us. Thank you to our amazing customers and partners for trusting us in this journey, and have an amazing Outperform.