Digital Commercial: how digitalization is changing commerce

Commercial Excellence Lab

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The impact of digitalization on client behavior and purchasing processes (and on corporate business models) is stronger than ever.

The trend affects not only B2C contexts but it’s growing in B2B, as well. According to HBR (2017), 75% of B2B purchasing processes in the US begin with buyers searching online and 57% of the decision making process is completed before even meeting the vendor.

That is why managing the digital transformation of sales is no longer an option, it is a must.

Questions and issues concerning the implementation of this fundamental and urgent change are often a source of concern for businesses and the transformation process has not yet been thoroughly framed and understood.

SDA Bocconi’s Commercial Excellence Lab (CEL) has been studying the phenomenon for two years and in 2018 it has conducted a qualitative and quantitative research in order to start answering several of the questions its partner companies have been asking.

Generally speaking, the goal of digital transformation in sales is the optimal use of digital technologies, data, tools and contents to manage sales processes. Technology can massively improve a salesperson’s “production function” and sales performance in general, but the role and activities of the sales force consequently need to adapt. How should we deal with this change? What should we base our decisions on? CEL’s study on 540 managers of major corporations in four countries (Italy, Germany, UK and US) has resulted in the following:

  • drivers in deciding to digitalize the sales process are competitive pressure, client requests and management vision. The latter is the strongest element and conveys managers’ willingness to be innovative, to distinguish the business from its competitors and reaffirm its leadership position;
  • predictors of success for the implementation of the transformation are strategic clarity, as well as a formal plan of implementation and KPIs. These elements are not always present among participants, though: the sample is very much diverse when it comes to these aspects;
  • incremental strategies of change are more effective than disruptive ones, and they are one of the elements affecting its profitability;
  • goals of digital transformation in sales vary widely: they can deal with efficiency (e.g. reducing commercial costs, as when digitalizing catalogues or sample sets); or they can deal with efficacy (e.g. enhancing the value of client interactions);
  • paths you should follow to reach these goals can also be diverse in nature: supporting networks, sharing information, implementing leaner processes (e.g. to get approval, or manage bureaucracy). Our research shows that replacing salespeople is not one of the most frequent choices followed by companies when digitalizing;
  • what companies choose to digitalize changes a lot as well: you can digitalize offerings, sales process as a whole or at some stages, e.g. back-office, support, and monitoring processes, the sharing of data and information and so on;
  • whom you digitalize for is not less important: companies are more successful when digitalizing just for some of their client segments, or in a different way for different segments;
  • critical elements for success include the ability to correctly analyze at least three dimensions, before you proceed to digitalize: client business models, customer journeys, and your own sales process (including both first line and back-office activities).

We have mentioned just a few aspects of a fairly complex and articulated matter. Many more are left to consider, especially if you want to understand all managerial implications and support companies in implementing the process.

If you are curious about the subject or want more details, visit SDA Bocconi’s Commercial Excellence Lab website , where you can also find updates on the work done and the challenges for 2019.

 

Paola Caiozzo

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