The Impact of Digitalization on the Sales Function

The impact of digitalization on the sales function feels like an earthquake. Just look at the number of available software solutions and apps available to enable the sales process. The overarching goals of all these solutions is to further commercial intelligence and boost sales outcome. So let us start with the definition of what commercial intelligence is. Wikipedia is my go-to source for that!

Digitalization and all the systems that go with it will bring no benefits without the proper information going through it. Systems are structured and set up to manage that intelligence, to mine its relevancy, and to enable sellers with the proper insights at the right time. Remember that a fool with a tool is still a fool! The tool itself does not generate outcome. The tool in the right hand with the right mindset is the way to go. A CRM system without complete and systematic customer data is useless. A pricing optimization solution with incomplete and uncleaned data will not make proper pricing recommendations. Finally, dynamic value-based pricing on an e-commerce platform needs real-time competitive information feeding the system. You get my point. Systems, tools, and models form the engine of digitalization. Data is the fuel of the engine. And because of that, the role of all sales functions has changed with the need for more complete, deep, and relevant information. Here, we also include the need for qualitative information which can bring lots of value when combined with quantitative ones.

THE TRANSFORMED ROLE OF THE SALES FUNCTION
The need for commercial intelligence is real across all go-to-market functions to be able to deploy value-based strategies. At every stage of the go-to-market process, sales functions play a critical role to gather information and to conduct specific value-based activities.

Commercial Intelligence (CI) is the process of defining, gathering, analyzing and distributing accurate and relevant intelligence regarding the products, customers, competitors, business environment and the organization itself. This methodical program affects the organization’s tactics, decisions and operations.1

Value-based innovation

• Hidden needs
• Voice-of-Customer
• Pains & Gains
• Brainstorming
• Observation

Value-based marketing

• Segmentation
• Program execution
• Customer experience
• 1-on-1 marketing
• Digital tools
• Comp. Intelligence

Value-Based Pricing

• Value proposition
• Value modeling
• Value-in-use
• Premium extraction
• Value Messaging

Value selling and negotiation

• Value communication
• Value & pricing negotiation
• Customer value files
• Price execution
• Digital Selling

We are far away from the traditional sales roles which used to be focused on order taking. Because of digitalization, order taking has been automated in procurement software and in e-commerce platforms. The sales function is transitioning to be more commercial, i.e. wider in scope and much connected to marketing and pricing. Finally, other functions besides sales are also very relevant to commercial intelligence: sales ops, demand generation, customer service, customer success, and strategic account management.

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The level of sophistication of what is asked of a traditional sales team is amazing. I list a few dimensions of the new role of sales below.

1. Biz dev & demand creation (growth)
2. Consultative selling (needs analysis)
3. Domain specialists (products & applications)
4. Complex Sales (solutions, data, services)
5. Relationship selling (trusted partner)
6. Entrepreneurial spirit (real-time data)

Sales professionals have to be trusted advisors who are fluent in customer language and highly relevant in the customer domain while becoming experts at complex sellings, value-based selling, and relationship building. Because more than 60% of the sales process is already known by the customers and buyers, sales roles are morphing into account management roles, which require deeper customer intimacy. In that context, sales organizations need to be transformed to include these five considerations listed below.

1. Reinforcing the back office: sales ops!
2. Investing in ongoing commercial excellence
3. Deciding in real-time with real-time BI
4. Separating transactions from relations
5. Gathering data to complete the lakes

Both Forrester and Gartner predict a revolution in the way traditional sales organizations are structured. That includes the inclusion of the value and pricing functions under the sales operations functions to work in full alignment. Imagine the power of the combination of technology, sales, value, and pricing working together under one roof without organizational silos and constraints. We also see the emergence of unique sales team designs with the separation of transactional and relational activities. Therefore, the account management function is booming right now, and we see a lot more open positions for the account executive role.

IMPLICATIONS FOR SALES SKILLS
For sales functions, I posit that there is a need to develop hard selling skills. It is known that sellers and account developers do not lack soft skills. They are trained in understanding accounts, uncovering customer needs, and building relationships. They are well-trained in the psychology of selling and in emotional intelligence. In the context of digitalization, they need to develop more hard skills to be able to manage technology and to understand data and the science leading to decisions. I list some of the hard skills below.

1. Data analysis & interpretation
2. Technology acumen
3. Pricing tactics & guidelines
4. Financial acumen (internal & external P&L)
5. Understanding & use of advanced value tools
6. Forecasting & modeling tools
7. Negotiation gaming & tactics
8. Value quantification process

Of course, it is not about turning our sales teams into data geeks. But they need to understand and embrace the rationale of pricing and sales decisions and what models do in the background to derive intelligent decisions. The development of these hard skills is essential in building confidence and adopting the use of these digital tools within sales teams. Additionally, sales professionals need to be excellent at understand the customers’ operational and financial priorities in order to become good value sellers. That includes being able to build and deliver business value assessments, discuss value models, and use the right customer value management tools.

In this short analysis, I highlight the complementarity of the marketing, sales and value functions. The future is going to be about more collaboration and coordination between them. This is why I am now convinced that, in the context of accelerated digitalization, all functions needs to be transformed at once. It is also why the role of CROs is very timely right now. CROs manage the entire go-to-market spectrum and make sure sales teams are well supported by marketing, campaign management, value management, and revenue operations teams.

The value your product or service delivers to customers is one of your most important assets. Elevate your sales strategy. 

1 wikipedia.org

Bio

Dr. Stephan Liozu (www.stephanliozu.com) is the Founder of Value Innoruption Advisors (www.valueinnoruption.com),  a consulting boutique specializing in industrial pricing, digital business, and value models, and value-based pricing. Stephan has 30 years of experience in the industrial and manufacturing sectors with companies like Owens Corning, Saint-Gobain, Freudenberg, and Thales. He holds a Ph.D. In Management from Case Western Reserve University, and has written several books, including “Dollarizing Differentiation Value” (2016) and “Value Mindset” (2017).