There’s no question that we are now firmly in the era of digital selling. Most B2B buyers have moved online, driving a sea-change in expectations. Customers want more control in the buying experience, particularly with more options to engage where, when and how they want. Yet, even with many advancements in technology, most B2B enterprises have been slow to take advantage of the significant opportunity in digital selling. However, traditional selling and pricing approaches are rapidly losing ground.
The ability to drive improved digital purchase experiences for their customers will mark the difference between businesses that will thrive and those that will struggle for survival.
Pricing strategy is the place to start: Pricing is the #1 reason buyers leave their current supplier and getting the price right is the #1 concern of vendors in digital selling. By focusing on pricing, many businesses can achieve a return on investment sizable enough to fund the entirety of their digital sales transformation journey. But it need not be overwhelming: our staged approach to digital transformation in pricing can show businesses what to focus on and in what order.
The Transformation of Selling Strategy: Six Stages
There are six key stages in the journey to achieving strategic success in digital selling. While the advancement from each stage to the next will drive significant and measurable gains, together these stages provide a tested roadmap for enterprises seeking to advance their digital selling capabilities.
Each stage builds on the results of earlier stages. For example, prioritizing basic price and revenue management capabilities in Stage One of your digital selling transformation establishes the basic price coordination systems that are key to delivering increasingly improved price personalization and optimization in subsequent stages.
Our digital selling maturity model will help you to assess the current standing of your business and evaluate which gaps should be prioritized to most effectively accelerate your business’s move into the next stage of digital selling.
Stage One: Traditional Selling
Businesses in this stage may feel that a path to digital selling is unattainable, but yet the greatest and most foundational opportunities for improvement lie within this stage. This stage’s focused attention on the implementation of basic pricing analytics and price management capabilities will provide the pricing infrastructure and foundations necessary for the digital sales transformation journey.
Businesses in this stage have a lack of analytical pricing insight, rely often on gut-feel pricing, use manual methods for quote and profit calculations, and are slow to respond to quote inquiries. Because of this they leave revenue on the table, leak margin and alienate customers with slow and sometimes inappropriate pricing responses.
Businesses in this stage should prioritize the following price management initiatives:
- Employ pricing analytics to gain visibility into price and profitability across the business.
- Identify and address the most severe sources of revenue leakage in order to build a plan for price recovery.
- Automate pricing calculations and updates to improve accuracy.
Stage Two: Initial Price Management
By this stage, businesses have basic insights into price, sales and profitability but they still struggle to deliver fast customer responses due to manual processes, a lagging adoption of pricing strategy, and an overly heavy reliance on a deal desk for price exceptions and special discounts. There may also be significant variation in pricing across customers and channels in this stage.
Businesses in this stage should:
- Deploy a quoting system that can support the sales team in quickly determining and configuring the desired solutions for their customers.
- Integrate pricing controls into quoting tools to drive consistency in price execution and reduce the risk of quoting outdated prices.
- Deliver price guidance with specified approval thresholds to avoid the friction of seeking discount approvals and to accelerate response times.
- Gather data from customer-facing and sales-facing systems to identify buying trends and behaviors.
Stage Three: Accelerated Sales
Businesses in Stage Three will have analytical capabilities in place to guide improved sales and price decision- making but sales teams may struggle to apply these new pricing policies (due to complicated processes or disconnected systems), or potentially even resist them due to a lack of understanding. Other ongoing problems in this stage include high administration tasks related to quoting, and customer churn and/or stagnation in growth in the existing customer base.
Businesses in this stage should:
- Deploy a price optimization solution that can deliver customer- specific price guidance, recommendations and insight to salespeople at the point of interaction to accelerate sales and improve profitability.
- Leverage AI to provide sales insights on buyer trends to identify behaviors indicating the risk of customer churn, expose opportunities for upsell, and uncover buyer-specific offer recommendations.
- Streamline the quoting process to reduce the administrative burden of gathering disparate product configuration and pricing information to empower sales teams to focus more time on selling and building relationships.
Stage Four: Guided Selling
In this stage the core functions of the sales engine are humming. There is a centralized approach to revenue and profit analysis. Sales teams have the insights they need to deliver personalized quotes and quickly configure the offers buyers desire. And most importantly, sales team members are able to negotiate from a position of knowledge and authority.
Yet, businesses in Stage Four may still have prices that are not coordinated across channels, sluggish adoption of eCommerce due to limited self-serve and customization capabilities, and limited online product information and options all of which contribute to lost customer loyalty and lost sales.
Businesses in this stage should prioritize the following initiatives:
- Integrate all channels to a centralized pricing technology to ensure that every delivered price is created in context of market and customer conditions across channels.
- Enable customers to complete purchases online with their personalized pricing -the same special pricing they would receive through any other channel.
- Reduce channel conflict with a coordinated channel pricing strategy to ensure pricing consistency across varied purchase scenarios.
- Invest in scalable, real-time price delivery so buyers will not be turned away by the website’s poor performance and seek to complete their purchase through a competitor with faster response times.
- Support self-service product configuration to allow customers to configure their desired options without the aid of a sales rep.
Stage Five: Integrated Ecommerce
Businesses in Stage Five have effectively equipped sales and partner teams with the pricing and customer insights that allow them to respond quickly and accurately to quote requests. ECommerce pricing and operations are integrated into the overall sales strategy reducing the risk of channel conflict and improving the self-serve buying experience.
While companies in this stage enjoy the benefits of a series of highly effective sales channels, it might still be true that buyers cannot easily switch between channels and that sales teams have historical data, but lack real-time info.
To advance to the highest stage of Digital Selling Maturity, businesses in this stage must:
- Integrate sales technologies and processes across channels so that customers can easily move between online, in- person, partner, and other desired channels
- Capture advanced analytics on buying behavior for each unique interaction across channels to help identify areas of friction in the buying process.
- Support real-time pricing to ensure that the most up-to-date market, competitive, and buyer information is utilized for each price response.
- Connect all facets of the omnichannel customer experience to refine buyer behavior analytics with real-time agility, ensure emerging trends are identified early, and continuously optimize personalization for each unique customer scenario
Stage Six: Omnichannel Optimized
Companies in this stage have fully realized their ability to deliver an exceptional data-driven buyer experience and are enjoying improved customer loyalty, greater capabilities for personalization, and improved costs-of-sale.
In this most advanced stage of omnichannel optimization, buyers trust that they will receive a consistent, personalized, fast response to their sales inquiry irrespective of the channel they choose to transact through. Such high levels of trust accelerate purchases, expand market share, and maximize the potential of your sales reach.
In this stage:
- Customers value their personalized, self-serve purchase experiences
- Real-time insights inform and optimize offers for every sales interaction
- Commercial and technical partners are integrated into the commerce ecosystem
- Pricing and offer management are agile
While many businesses may be far from reaching a Stage Six Maturity of Omnichannel Optimization, most are capable of rapidly achieving stages four or five with the application of AI and technology. With AI, insights from every customer interaction can be used to refine the personalization and pricing for every future interaction at scale. Precision in pricing at scale has measurable and impactful revenue benefits—in some cases we’ve seen a 20% increase in win rate, 2% improvement in margin, 5% increase in revenue and 20% increase in customer lifetime value.
With the increased affordability and fast payback of price optimization technology, it’s no wonder that even Gartner advises that price optimization is the number one use case for AI in digital commerce (Infographic: Artificial Intelligence Use Case Prism for Digital Commerce (gartner.com)).
Is your business ready for whatever comes next?
For a full discussion of the six stages and more, check out this whitepaper: Pricing is Key to Digital Selling Maturity. For more information or to talk to a consultant, please reach out to us at Contact | PROS.