Whether manufacturers like it or not, everyone is operating in a data driven world today. And when businesses learn how to properly leverage it, data has the potential to change every aspect of how a business functions. And in some instances, the level of change can be quite dramatic.
Consider, for instance, how data is impacting customer engagement. Manufacturers have traditionally sold through established channels and distribution partners. However, as David Harrelson, vice president of digital customer experience at Capgemini in North America tells IndustryWeek, shifts in the global “tectonic business plates” over the past decade have created customer experience imperatives forcing change to the traditional B2B go-to-market (GTM) paths.
“Today, manufacturers and B2B organizations are establishing new business models including building direct to consumer (D2C) selling relationships. This channel emphasis highlights the critical nature of defining customer personas and journey maps,” he says. “To ensure customer delight and ultimately drive the desired business results, manufacturers must know who they are selling to, and segment against those personas. Once they have this knowledge, manufacturers can build a database with customer information, search and purchase history and then leverage this information to create personalized services, offers and ultimately customer loyalty.”
Some B2B type enterprises, with a depth in resources, are maturing in a lot of these areas. However, according to Harrelson, most are struggling to catch up. “The current pandemic has demonstrated that although they had ongoing initiatives and plans to address these topics, the quarantine of personnel has illustrated the immaturity of their digital capabilities,” he says. “And the crunch of customer demand on their digital infrastructure hasn’t accommodated for the type of experience their consumers nor channel partners expect.”
AI solutions and guided selling options are crucial digital tools that manufacturers haven’t leveraged fully to-date, explains Harrelson. “But by using these new capabilities, manufacturers can get to know their customers holistically, and on a much deeper and more intimate level,” he says. “Many manufacturers have had extremely limited access to end consumers and thus lack a direct-to-customer perspective, and in turn, have not segmented in this way. In the past, distributors and wholesalers have had a relationship with the consumer, thus this is new territory for B2B organizations. Therefore, there’s a wealth of opportunity for those organizations that can master this effectively.”
Are alternative revenue streams for all manufacturers?
The various alternative revenue concepts showcase how organizations are reaching out directly to the end customer. For instance, servitization is a movement underway within B2B organizations to enhance and elevate GTM strategies. So, what is servitization? Essentially, servitization is the concept of wrapping a service, offering or capability around an existing product being sold into the market. To that end, manufacturers are tasked with finding a service that customers value.
This is crucial because digital marketers like Amazon, Alibaba and others have conditioned buyers to a digital engagement experience that since become an expectation, explains Harrelson. “They demand similar experiences regardless of which sector, partner, vendor or product they are considering. As such, for many B2B organizations merely manufacturing a product…just isn’t enough,” he says. “Many manufacturers are finding that they are becoming or have become commodities with little value differentiation. Thus, servitization. The idea of disintermediating from the traditional channel partner relationship exclusively to a hybrid model including going direct-to-consumer must take into consideration wrapping services around products and even consider subscription services as a GTM model as well.”
Harrelson suggests that manufacturers can also bundle these offerings to include maintenance support and other relevant product recommendations for a monthly fee to reinforce the partnership and maintain a loyal customer base. “For example, building IoT devices into machines and products that can offer a proactive view into the product’s usage and accurately determine future service needs. This insight reinforces loyalty to the organization and builds a long-term relationship, while also offering a heightened level of service that they are not likely to receive elsewhere.”
This level of interactivity also enables the customer to enjoy unique insight into products. For example, a large tire manufacturer has begun integrating IoT devices into their tires to generate specific outputs on product how the tires are used, what conditions they’re being driven in; customers can subscribe to this data and further strengthen their dependency on a brand or organization.
Never overlook data’s role.
Understandably, data is the driver in these alternative models. “With insight into product usage and service needs, manufacturers are better able to execute re-marketing initiatives,” he says. “Manufacturers are already moving in that direction – with this newfound reliance on data to offer new degrees of service. Now, manufacturers can show customers how they’re using their products; this is a clear way to show the value of the partnership and offer a personalized experience.”
Of course, ensuring that the right talent is properly positioned within the organization is crucial. “The types of sophisticated automation capabilities we are discussing consume include large amounts of data; it requires the right personnel who understands the nuances of the technology to digest the data and deliver actionable results,” he says. “Manufacturers need to know what to do with the data, and how to make effective changes to the digital marketing activity to ensure consumers have personalized experiences.”
