Many B2B companies – especially in classic “German” industries such as Mechanical Engineering – are working intensively on Industry 4.0, which is the digital combination of all production processes. Most of their Sales organisations, however, do not expect significant changes driven by a changing environment.
Frequency and speed of change might be smaller compared to Sales in consumer goods industries, but overarching trends, including digitalisation, globalisation, professionalization and everything as a service are changing customer behaviour already today and accordingly, B2B Sales.
Digitalisation: the future of B2B Sales will be digital
Digitalisation is ever-present and will drastically impact B2B Sales. Today, 90% of B2B buyers search for keywords online before their buying decision in order to inform themselves about the product, suppliers and prices – 70% even watch product-related videos.
If we take into account that 70% of the buying decisions have already been made before the initial contact with the Sales Agent, the necessity to digitize all steps in the customer journey becomes clear. [i]
Also fitting in with this is the news about the takeover of the online marketplace Contorion by tools supplier Hoffman. This move has been done to advance the digitalisation of their Sales organisation and to become a relevant competitor to the multi-channel pioneer Würth. [ii]
Globalisation: China dominates on demand- and supply-level
New global competitors – especially from China – are entering the European market. “Made in Germany” remains to be a unique selling proposition, but nowadays Chinese manufacturing companies can do more than simply copy.
Driven by locational advantages the number of Chinese product innovations has increased significantly. Amongst others, these advantages include the significant size of the domestic market and the availability of skilled workers: in 2015 there were more than 3 million engineering graduates in China compared to Germany with only 100,000. [iii]
With their new and innovative offerings Chinese B2B companies provide considerable competition on product level – increasingly in industries, which have been dominated by German global leaders. Therefore, Sales will become even more relevant for German companies as a potential opportunity to differentiate themselves and new Sales strategies are required.
Professionalization: B2B procurement is gaining strategic relevance
Increasing cost pressure and transparency of information facilitated by the internet pose new challenges to B2B procurement. Procurement offers considerable scope for optimization to decrease costs. This has been recognized by companies and they increasingly establish a strategic Procurement department – which has been confirmed by 85% of executives according to a recent survey. [iv]
B2B companies and public-sector count more and more on cooperations and centralisation to bundle their demand and strengthen their bargaining position. Accordingly, the price pressure on B2B Sales organisations will increase and also the personal relationship between sales person and buyer decreases in relevance. B2B Sales strategies need to address this.
Everything as a service: complete solutions are requested
In the past, most B2B customers were satisfied with simple product offerings. Today’s B2B customers expect solutions, which are composed of different services along the entire product lifecycle. The actual product is mostly “only” part of a service.
The focus on the service business creates value not only for the customers, but also for companies – with regards to up- and cross-selling opportunities. According to a survey, 65% of German manufacturing companies, as an example, have generated higher returns with services than with product Sales. [v]
The sale of services requires changes with regards to Sales argumentation and methods. A step that is not easy for most companies.
In conclusion: B2B Sales has to develop further
B2B Sales organisations face plenty of challenges that must be addressed by their Sales strategies:
- They have to integrate new technologies in existing structures and processes
- They have to respond to new competitors and develop Sales-related competitive advantages, which are not (solely) based on personal customer relationships
- They have to respond to new customer requirements and exploit these
B2B companies have to fundamentally refine their Sales organisation. The answer is Sales 4.0!
What Sales 4.0 means and which elements it is comprised of can be read in the next article.
von Daniel Meidl & Nikolaus Bremerich
[i] Roland Berger. (2015). Die digitale Zukunft des B2B Vertriebs. Retrieved on July 11, 2017, from https://www.rolandberger.com/…pdf/die_digitale_zukunft_des_b2b_vertriebs.pdf
[ii] Manager Magazin. (2017). Contorion – binnen 3 Jahren zum 130-Millionen-Euro-Exit. Retrieved on June 29, 2017, from http://www.manager-magazin.de/unternehmen/artikel/contorion-hoffmann-se-uebernimmt-werkzeug-spezialisten-a-1154409.html
[iii] World Economic Forum. (2015). The Countries With The Most Engineering Graduates. Retrieved on July 11, 2017, from https://www.forbes.com/sites/niallmccarthy/2015/06/09/the-countries-with-the-most-engineering-graduates-infographic/#4d79c1bf667d
[iv] Spring Procurement. (2011). Zukunft Einkauf – Trends in der Beschaffung. Retrieved on July 11, 2017, from www.springprocurement.com/studiezukunfteinkauf.pdf
[v] VDMA. (2016). Zukunftsperspektive deutscher Maschinenbau. Retrieved on July 11, 2017, from www.vdma.org/documents/105628/…/fed72f6c-1add-40c1-91ee-1d5c9167fcd4