B2B companies are losing traction quickly relative to their B2C competitors. It is becoming increasingly clear that digitization needs to come to the forefront for these companies in order to advance ahead of their competition. The days of only considering digitization for back office efficiency are long behind us. For a company to make strides in the current highly competitive markets and beyond, they must adopt strategies to innovate and advance in the digital marketplace.
Results of a recent study by McKinsey & Company back this theory with real data. In their study of 200 B2C and B2B companies, they found B2B companies that adopted digital strategies outperformed other B2B companies by 15 percent. What is the secret behind these companies and their digital strategy? They all leverage six core practices to increase their overall performance.
- Strategic Commitment to Digital – Companies cannot only say that want digitization; they must back these words with true actions. Staffing, technology advancements, capital collateral, etc. are all critical in defining your company's strategic compass to advance in the digital era.
- Strong Cross Channel Integration – Understanding your customer and user base is crucial to any and all businesses regardless of the industry. Providing ways for customers and users to interact both online and offline increases efficiency and market share. It also allows companies to provide high levels of customer service and anticipate customer/user responses.
- Data! Data! Data! – Irrespective of the type of industry your company is in, every company captures data. It's just a matter of what you are actually doing with the data collected. Using data analytics to determine customer success rates, employ better sales methodologies, and enhance back office efficiency are only the tip of the iceberg. Companies that want to leap ahead of their competition work tirelessly at analyzing data and changing their course accordingly.
- Simplicity from Front-end to Back-end Processing – Leveraging the interconnection of systems upstream and downstream not only drives operational efficiency, but can also be a clear indicator of ways the business can grow revenue potential. Sales teams that can view data holistically have a better comprehension of how buyer's behave and can use this information to predict who will buy what product and when.
- Take Risks with Development – It is no secret that companies who innovate early and often, tend to advance past their competition by leaps and bounds. The McKinsey and Company study found that one third of the B2B companies studied take over a year to move a digital initiative from concept to execution. All the while, their competitors who are willing to take risks are outperforming them. Employing a culture of agility with a foundation based upon innovation, research/development, and rapid experimentation provide the catapult necessary to edge out the competition.
- Meaningful Metrics – Getting to the heart of metrics by determining what is truly important for measuring success and how to course correct based on the metrics provided are driving factors to understanding the impact digitization has on your company.
With that being said, B2B companies need to strategically plan their digital road-map with careful consideration to taking on excess changes that could be detrimental to their longevity. Changes always have a ripple effect regardless of the intent. Creating a balance based upon an understanding of the overarching consequences of too little digitization and too much change will provide the foundation to your companies growth.
For more information, read more about the McKinsey & Company study here.