Editor
Patricia Åkerman
Photography
Nick Tulinen
COLUMBIA ROAD
columbiaroad.com
Edition 1/2020
Design
Ramsankar
Muraleedharan
The Digital Sales
Transformation
Handbook
Columbia Road
2020
C
Dear reader
Embrace
transformation,
be ready for
disruption
o
n
t
All sales are going
digital
16
The importance
and impact of
optimising digital
revenue streams
26
6
Customer centricity 34
10 and customer
lifetime value as
drivers for
sustainable growth
Webshops:
12 POINT-OF-VIEW:
42
still the cornerstone
This is how you
of ecommerce
ramp up global B2B
investments
ecommerce sales
e
n
t
A three-level
framework
for transforming
digital sales
46
How to build
a transformation
culture and
mindset
57
s
The three trends
88
driving digital sales
transformation:
Automation (AI),
How to build
64 Sustainability
and China
the architecture for
sales and marketing
The
96
The three degrees
70 (un)sustainability
of digital sales
of automated
sales
Building
a sustainable
competitive
advantage with
the right digital
architecture
POINT-OF-VIEW:
The complex task of
mastering digital
sales in a traditional
organisation
AI is transforming
76 sales
82
104
Data science
is the future of
digital sales
112
POINT-OF-VIEW:
118
Winning companies
already use
machine learning
in digital sales
Contact
122
Dear reader
You are holding in your hands
the very first Digital Sales
Transformation Handbook. As
we’re entering a new decade in
a completely digitised Western
society, it may seem a bit odd
to still be talking about digital
transformation. But the catch
here is sales.
When looking at digital
sales, it’s easy to focus on
consumer ecommerce — that
is, webshops — and think
“what’s there to digitise? I buy
all my clothes, furniture and
groceries online!” But the
real digital transformation of
sales is still in its very early
days. We are talking about
B2B order channels helping
manufacturers and importers
to connect with retailers,
complete industrial solutions
for manufacturing and heavy
industry, and selling at scale
to long-tail customers in
what would be inefficient by
traditional means.
The opportunities are endless,
but to see them you need
6
THE DIGITAL SALES TRANSFORMATION HANDBOOK
to look beyond traditional
webshops. When it comes
to B2C ecommerce, having
a good-looking ecommerce
site is relatively trivial. The
real struggles lie in actively
managing digital revenue and
building capabilities that can
withstand the threats of global
competitors.
And, as you begin to plan for
ways to utilise digital sales
channels in your business, you
should also pay attention to
how you sell. It’s not just the
channels that are enjoying the
benefits of digitisation, your
sales processes can and should
be made more efficient too.
Automating sales processes
frees your sales team from
the time-consuming repetitive
tasks and let’s them focus on
what is important: building
relationships with your
customer.
In addition, automation gives
you a competitive edge:
your sales cycle will be quicker,
more personalised and you’ll
be able to provide better
customer experience —
not to mention that you’ll
outrun your competitors with
refined pricing. At the same
time, with the help of AI and
data science, both B2C and B2B
companies can offer better,
more personal service and run
efficient, streamlined sales by
just being able to handle and
process customer, product and
purchase data in a way that no
human ever can.
book provides you means and
frameworks to adapt to the
digitalisation of revenue.
I hope the book inspires you
to continue on your path of
modern digital sales.
Patricia Åkerman
Editor-in-Chief
PS. We love feedback. Please let us
know what you think about the book
on social media or by email:
patricia.akerman@columbiaroad.com
Digital sales transformation is
just as much about changing
your mindset towards a
growth-driven mentality as it
is about understanding what
technological advances can do.
Having a holistic understanding
of your digital sales channels,
related technologies
and capabilities enables
incremental business-focused
investments that guarantee
return on investment.
The impact of digital solutions
on revenue and sales is
growing exponentially. This
DEAR READER
7
EMBRACE TRANSFORMATION,
BE READY FOR DISRUPTION
Magnus Unemyr
WHEN LOOKING AT the explosive growth of marketing technolo-
gy (there are now roughly 7000 marketing software products on
the market), one sees some important trends. These include socalled "smarketing" (the technology-driven alignment or merging of sales and marketing), data-driven and autonomous decision-making, and more focus on a superior customer experience.
In fact, customer segmentation is now going through a slow
death, and is being replaced by AI-powered audience management and hyper-personalisation. The same goes for cold-calling.
Now, sales teams only have to work on hot leads that have been
qualified and nurtured by marketing automation systems fully
integrated with their CRM system.
The message is clear: companies that don’t embrace these
new technologies will be left behind — perhaps never to recover.
It's imperative for business leaders to start the journey towards
data-driven and autonomous marketing, so that they can offer
their customers the benefits of personalisation and a better allround experience.
Moving forward, sales and marketing teams will need to become
fluent in data analytics and software technology, and understand the value of breaking data silos and integrating various IT
systems. In particular, we need deep integration between sales
software and marketing software, as well as integration with
ecommerce, customer support, and digital logistics systems.
New technologies — like cognitive AI and traditional machine-learning — are propelling these trends at a rapid rate. Most
people I meet think that AI in marketing is only about chatbots,
product recommendation engines, and perhaps churn and customer lifetime value prediction. This is a gross underestimation
of the true potential.
10
THE DIGITAL SALES TRANSFORMATION HANDBOOK
While doing the research for my last book, I came across well
over one hundred different use cases where AI (or rather, machinelearning) is already being used to improve everything from sales
prospecting and lead scoring, to conversion rate optimisation
(CRO) and the purchasing of digital ads. There are even AI tools
that digitally assess the personality and psychographic profile
of customers, while other tools can figure out who the best
people on the sales team are and train the rest to perform at
the same level.
With all these powerful capabilities available, organisations
need to act responsibly, ethically and in line with privacy legislation. This is also a new area of responsibility for sales and marketing leaders that requires new management skills.
We can safely conclude that sales and marketing is undergoing a
transformation. In some cases, even a complete disruption. It is
your job as a sales and marketing professional to educate yourself
and ensure your company outperforms the competition in this
area. Reading this handbook by Columbia Road is a great start.
Welcome to the future of sales and marketing!
MAGNUS UNEMYR is the author of ‘Data-driven marketing with artificial
intelligence’ and several other books. He has spent his entire career working
in software and marketing roles in the global tech industry.
MAGNUS UNEMYR
11
WEBSHOPS:
STILL THE CORNERSTONE OF
ECOMMERCE INVESTMENTS
Emmi Tervala
New technologies have the power to completely transform sales
and business processes. For the consumer, this evolving online
experience still manifests where ecommerce began some
25 years ago: the webshop.
THE WORLD REMEMBERS 1994 as the year Nelson Mandela was
elected president of South Africa, after being imprisoned for 27
years. Tom Hanks won an Oscar for Forrest Gump, we lost Kurt
Cobain, and the LAPD famously chased down O.J. Simpson live
on TV.
There was another significant event in 1994, although it’s importance wasn’t realised at the time. In August of that year, a
man named Dan Kohn created a website called NetMarket to sell
a Sting CD to a friend. The sale is now widely regarded as the
world’s first online transaction.
Fast forward some 25 years and online shopping has become
part of everyday life for people around the world. In 2020, global
retail ecommerce sales are projected to reach USD 27 trillion.
Ecommerce has always been at the heart of Columbia Road. Since early 2016, we have been helping companies with the implementation and optimisations of webstores, both in B2B and B2C. And we still believe that
ecommerce is at the core of digital sales, even though digital
sales has evolved and transformed into much more than just
ecommerce stores.
Today, it's not only B2C companies that sell their products
and services online — B2B companies are also building their
digital sales capabilities. While the B2C business is already full
of ecommerce-first companies, B2B webshops are now rapidly
gaining ground.
12
THE DIGITAL SALES TRANSFORMATION HANDBOOK
Investment costs in ecommerce are now lower than ever, which
makes it substantially easier to launch your own webshop.
Easy-to-implement platforms — such as Shopify or WooCommerce — have enabled many companies, both B2B and B2C, to
launch their own webshops in just a few days. Many brands and
wholesalers have launched Direct-to-Consumer (D2C) webshops that bypass retailers, improve profit margins and result in
direct contact with consumers.
Ecommerce is one of the cornerstones of digital sales transformation. You cannot build AI-powered hyper-personalisation overnight — digital sales capabilities need to be built step
by step. And ecommerce is a great way to start learning new
tools and processes, as well as to collect consumer data. You
should see your webshop as a playground where you can test
ideas around which you can start building other digital sales
capabilities.
THREE KEY REASONS WHY NOW IS THE TIME TO INVEST IN ECOMMERCE:
→ Your competitors have most likely done it already
→ Investment costs in ecommerce are now lower than ever
→ It’s the first step in your digital sales transformation journey
The only question is: what are you still waiting for?
EMMI TERVALA
13
FRONTRUNNER STORY:
Finnish Baby Box (acquired and part of Reima)
Heikki Tiittanen
CEO
14
THE DIGITAL SALES TRANSFORMATION HANDBOOK
B2C sales have been undergoing a
revolutionary change over the past 10
years, with the direct-to-consumer model
increasingly replacing traditional importing,
retailing, and partnership models.
Whereas being located close to the
consumer used to be enough for a
competitive edge, now the key factors for
success are the ability to offer products at
lower prices and/or of superior quality. This
means companies can remove logistics
middlemen and use their own ecommerce
operations to ship branded products directly
to the consumer. Both sellers and buyers
benefit more from this model.
Finnish Baby Box, which sells maternity
packages directly to consumers online, has
used this transformation to its advantage
by offering an excellent deal to end users.
Whereas retailers traditionally take a cut of
approximately 50% of a product's selling
price, now this 50% can be split between the
consumer and the manufacturer.
EMMI TERVALA
15
ALL SALES
ARE GOING DIGITAL
Eero Martela
The importance of digital sales is growing for companies in any
industry, yet there is no one-size-fits-all approach to selling
online. Whether B2C or B2B, companies need to consider
the buyer experience at every stage of the journey.
20%
10.2%
0%
11.7%
13.5%
15.3%
2018
17.3%
2022
Digital commerce's share of global B2C sales 2018–2022. Source: 451 Research
DIGITAL COMMERCE’S SHARE of global B2C sales is projected to
grow at an increasing rate in the coming years. But this is just the
tip of the iceberg, as the volume of digital B2B sales transactions
is typically considered to be much higher than that of B2C.
It is not news that digital sales are growing. But what may still
surprise sales and marketing leaders are the countless variations and combinations of different areas of digital sales, and
the ways in which they can support traditional sales. The impact
and opportunity of digital sales on different industries is not
always known.
DIFFERENT INDUSTRIES HAVE DIFFERENT APPROACHES
AND BUSINESS CASES FOR DIGITAL SALES
In B2C goods industries, such as retail, digital sales is already
very mature. For B2C sales and marketing practitioners, it is now
all about keeping up with the pace of growth and improvement
16
THE DIGITAL SALES TRANSFORMATION HANDBOOK
in digital sales while also staying on top of emerging omnichannel opportunities.
Meanwhile, digital sales practises are only now starting to
evolve in the services business and for B2B transactions. In
these areas, there is a lot of potential for forerunners to capture
market share.
It is important to understand that growth in transactions is not
the only motivation for sales going digital. Here are five examples
of indirect drivers too:
1
MORE EFFICIENT SALES can be achieved by optimising the process
of lead generation, AI-based lead rating, and contract/offer automation.
2 COST SAVINGS through directing purchasing to digital channels,
as this reduces the number of salesperson hours per revenue
euro. In industries where revenue is directly dependent on the
number of salespeople, this can translate into incremental
growth.
3 CUSTOMER EXPERIENCE, EFFICIENCY, FLEXIBILITY AND LOYALTY can
be increased (as can conversion rates and re-selling opportunities) by enabling customers to go through the buying journey in
their own preferred way — both digitally and physically.
4 MORE DATA can be retrieved, as almost everything digital can
be measured. This in turn enables a greater capability and higher
speed for optimising and leading sales activities.
5 RAPID EXPANSION TO NEW MARKETS by utilising existing digital sales
capabilities. While some localisation efforts are usually required,
they are less investment heavy than opening a new sales office
or store.
MORE THAN JUST A WEBSHOP
There are numerous channels for traditional sales: brick-nmortar, wholesale, sales reps, sales meetings, cold calling, contract negotiations, and more. The same goes for digital sales,
EERO MARTELA
17
where conversions may happen through various interfaces,
including webshops, online portals, online forms, emails and
mobile apps. Digital solutions can also catalyse traditional sales
at various points in the sales process.
With digital sales, it's not enough that an IT department just
sets up an online service — it's also important for companies
to pay attention to customers through their entire purchase
experience. The right kind of customers should be identified,
categorised, actively acquired, and encouraged to purchase, re-purchase,subIn 2020, the volume
scribe and become loyal promoters of the
of online B2B sales
service. In this process, all contact points
will be twice
should be as personalised and targeted
that of digital
as possible, and for the customer the line
between
digital and physical should be
retail sales.
seamless.
Globenewswire.com
Fortunately, there is an endless choice of
means and tools to achieve this. Making a purchase is a psychologically complex process. And in traditional sales, being able to
close deals is often seen as more of a gift than as something that
can be attributed to a specific process. In a sense, the same applies to closing deals online. But a lot of fine tuning is required in
order to optimise all the digital touchpoints to fit the customer's
psychological process.
IT’S ALL ABOUT THE CUSTOMER EXPERIENCE
ACQUIRING NEW CUSTOMERS AND
DRIVING THEM TO THE CONVERSION POINT
In B2B, digital customer acquisition can mean semi-automated
direct emails and contacting prospects through LinkedIn, for example. By forming a long list of potential customers (or of existing
ones who may purchase new product categories), acquiring their
contact details, and sending automated messages, a single digital
salesperson can contact and initiate a personal dialogue with
thousands of people or companies within a few days or weeks.
18
THE DIGITAL SALES TRANSFORMATION HANDBOOK
In both B2B and B2C, digital tools enable a very targeted andmeasurable multichannel customer acquisition approach for specific
micro-segments. From an endless number of potential touchpoints, it’s crucial to identify exactly those where customers can
be impacted. Optimising return on marketing investment is key.
KEEPING THOSE WHO CONSIDER IN THE LOOP
A general rule is to use retargeting ads for gaining the traction
of lower-value products, and targeted content marketing for
high-investment products and services where being the thought
leader is the key. It is crucial to identify customers' digital behaviour in physical touchpoints, especially when talking about
face-to-face customer interactions. After identification and first
contact, digital solutions can provide rich opportunities for lead
scoring and customer profiling to define the optimal next action.
CONVERTING CUSTOMERS IN THE MOST NATURAL TOUCHPOINTS
The touchpoints of digital sales can be so much more than a traditional webshop. Here are a couple of examples:
→ The starting point is digital content that directs a buyer into an
easily approachable form or configurator. There they fill in information about their need for a complex service. This request
is sent by email to a salesperson, but before that an AI solution
compares the request to a database of contracts and formulates
a draft contract, which is sent to the salesperson. The salesperson reviews the contract, modifies it and sends it to the customer.
→ The previous week a customer has received an offer from an
other store, after which she has been looking at other services
online. Now she walks into a store where the sales person goes
through the offer on a tablet. The salesperson can also see her
earlier purchase pattern and buyer profile. Based on that information, the salesperson is able to do additional selling and adjusting the price to maximise the total customer lifetime value
(for more on customer lifetime value, read pages 34 to 41).
EERO MARTELA
19
E
X
AWARENESS
P
CONSIDER
E
COMPARE
R
BUY:
NON-ID. CUSTOMER
BUY:
ID. CUSTOMER
Website
eCommerce
Lead scoring and activation
Customer portals
Search engine advertising
Retail
Instagram, Pinterest etc.
eRetail
SEO
Wholesale
Marketplace reviews
Marketplaces
Advocacy
Google
Online forums
Amazon Prime
WhatsApp etc.
Chat
Traditional advertising
Instagram Shopping etc.
Physical presence
Second-hand
Partners
Payment
DIRECTING EXISTING CUSTOMERS
→ In some businesses, the key transaction points are digital ser-
vice portals where customers make rapid continuous orders
based on their own contract and pricing terms, for example. In
such cases, it is typically a whole different sales effort, and a
question of service optimisation to change customers’ habitsfrom phone-based ordering to online ordering. When successful, this can lead to a great increase in efficiency, additional
selling opportunities, data orientation, and a better customer
experience.
ONBOARDING NEW CUSTOMERS
Introducing customers incrementally and in a timely manner
to a new service is critical for customer retention and future
revenue. This is especially so with more complex services, subscription-based services, or something that requires a change in
customers’ habits. In these cases, being able to optimise customer messaging and contacting based on data can significantly
increase the total lifetime value of a customer.
20
THE DIGITAL SALES TRANSFORMATION HANDBOOK
I
ONBOARDING
E
N
E
SUBSCRIPTION
ADVOCACY
Customer portals
Trials
Sharing
Marketing automation
Discontinuity
points
USAGE
RETENTION
CONTINUOUS
PURCHASING
C
Loyalty programmes
Care models (onboarding, activation, brand etc.)
Account based marketing
Customer service
Chatbots
Community
Social media
BACK TO PURCHASING AND RESELLING
PREVENTING CHURN BY RE-SELLING
TO CURRENT CUSTOMERS
Cost of sales for existing customers is much lower compared to
the costs of acquiring new customers. In addition, customers
who purchase items from several product categories are typically much more profitable than customers who buy products from
one category only.
Digital purchasing leaves a much higher trail of data from a
customer. This provides significantly richer opportunities for accurately timed, targeted, and personalised promoting and contact aimed at selling more and directing customers to a more
profitable level. The same applies to churn prevention. Data enables companies to identify when they are about to lose a customer, so they can trigger preventive actions.
In the B2B context, account-based marketing is constantly
becoming more efficient. AI is inevitably becoming a powerful
tool for enhancing the impact of customer retention and churn
prevention.
EERO MARTELA
21
DRIVING ADVOCACY
Finally, those customers who are happy with your product and
service should be actively transformed into active advocates of
the brand. Customer reviews, online forum comments, sharing
and recommendations can all have a great impact on growth,
while digital tools can be used to make advocacy as easy and
inviting as possible.
WINNING THE DIGITAL SALES GAME
The key to winning the digital sales transformation game is to
have a clear vision about which areas of sales should be digitised, and where the key opportunities lie. Thereafter, it’s all
about continuous optimisation through seamless collaboration
between sales, marketing, software development and design.
Due to its complex and cross-functional nature, it has been
challenging to form a holistic understanding of digital sales.
Different segments look at it from their own perspectives, and
different industries are bound to their traditional approaches.
However, as digital is becoming a key component of a company’s
revenue funnel, it makes sense for companies to take more active ownership of their whole digital sales process.
22
THE DIGITAL SALES TRANSFORMATION HANDBOOK
FRONTRUNNER STORY:
LEGO
Matleena Pirkkalainen,
Senior Key Account
Manager at LEGO
Group, Site Manager
LEGO Finland
24
THE DIGITAL SALES TRANSFORMATION HANDBOOK
LEGO has recognised how changes in
the consumer landscape have fuelled the
importance and growth of digital sales over
the past few years. Children increasingly
want to use digital services and play digital
games, and online searches for product
information have increased.
While bricks and the physical building
experience remain at the core of LEGO, the
company has proactively embraced change
in two concrete ways. First, LEGO has set up
a dedicated team to help its B2B customers
develop their online consumer businesses.
And second, LEGO has broadened its
offering by bringing digital features to
physical toys, such as including augmentedreality into brick building.
LEGO's transformation is an excellent
example of how changes in the external
business environment require novel
capabilities and ways of operating for
traditional organisations — especially those
with physical products.
EERO MARTELA
25
THE IMPORTANCE
AND IMPACT OF OPTIMISING
DIGITAL REVENUE STREAMS
Krista Palmu & Eero Martela
Taking sales online can be a complex process and
it’s not always clear what to invest in first. The key is to
break the buying process down into pieces and start with
the areas that offer the most potential for impact.
THE DIGITAL SALES LANDSCAPE comprises countless solutions and
touchpoints that affect a wide variety or processes in a company.
This landscape can become very complex in the enterprise context, where one company can serve both B2C and B2B customers in multiple markets, have many types of transactions with its
clients, and offer a wide portfolio of products and services.
For large companies in particular, it can be challenging to
make reasoned investment decisions in digital sales. It can also
be tough to decide which point to start the digital transformation journey from. All too often, companies are pouring capital into areas with limited business impact, while alternatives
would provide a much higher return on investment.
For example, a typical mistake is to invest in complex IT
systems, when lighter investments in the optimisation of current
systems or processes — such as customer messaging — would
pay off with much faster and offer less risky returns. At the other
end of the spectrum, companies sometimes become over cautious — and even paralyzed — through their inability to identify
smaller initial investments, when everything seems to be related
to everything.
To identify the most impactful targets for investment, it is
crucial to form an overall understanding of how, why, where,
in what situations and through which touchpoints customers
buy and interact with the company. This understanding should
ideally lead to being able to identify and prioritise digital value
26
THE DIGITAL SALES TRANSFORMATION HANDBOOK
Digital value and revenue streams
streams and synergies between functions. This in turn should
enable holistic and reasoned decision making across all digital
solutions and touchpoints.
The above figure provides a framework for structuring digital value streams. The main purpose of this framework is not
to provide a single solution for directing digital investments.
Rather, it is to help leaders structure and mentally carve the
landscape of digital commerce into smaller pieces, so it is easier
to make decisions that result in incremental business-focused
investments.
UNDERSTANDING THE BUSINESS VALUE
OF YOUR DIGITAL SERVICES
When defining business cases for digital sales investments, two
points should be remembered. First, it is difficult to completely
separate digital sales investments from generic investments in
digital services. Second, investing in digital sales typically has a
positive impact not only on the topline, but also brings efficiency
gains below the line in the form of fewer manual sales processes
that are also more streamlined.
When defining the business cases for investments in digital sales and solutions, the following areas of business impact
should be considered:
KRISTA PALMU & EERO MARTELA
27
→ REVENUE: Being able to attain more volume and getting more
people to convert more often with higher average purchases and
lower churn
→ EFFICIENCY: Reducing the number of salespersons or the amount
of customer service involvement in sales processes by using
digital touchpoints and automation
→ CUSTOMER SATISFACTION: Customers often prefer buying digitally
and find it more convenient, plus they appreciate the round-theclock availability
→ BRAND: Improving digital touchpoints should always have a
knock-on positive impact on brand
28
THE DIGITAL SALES TRANSFORMATION HANDBOOK
For each digital solution and touchpoint, it is crucial to define
the area of business impact. For example, the main website of
a company can provide more leads, generate direct sales, boost
the brand, increase customer satisfaction and drive efficiency
(through more people using digital customer services). Even
such a simple thing as a live customer-service chat on a website
can increase online leads by an average of 40 percent, according
to some studies.
When a high-level understanding of the business impact of
each service has been defined, it can be useful to map the services that cater to similar kinds of customer needs. In a large organisation, there can be many solutions that help customers to
fulfil similar needs. Typically, the solutions serving similar needs
require the same core functionalities, and can therefore share
the same IT components.
For example, when a company has identified that its best
business case lies in making the continuous transactions of
small-business clients more efficient, the company could simultaneously optimise all digital touchpoints that serve the same
need. In this example situation, the customer touchpoints to be
optimised could be online purchasing, digital portals, customer
service, and field sales tools.
A HOLISTIC UNDERSTANDING OF DIGITAL SALES ENABLES
INCREMENTAL BUSINESS-FOCUSED INVESTMENTS
Ultimately a systematic way of leading and growing digital sales
requires a shared understanding of digital value streams, customer journeys, and what the strategic goal is at any given time.
This ensures that decision making at different levels can take
place in a more objective fashion, it reduces the risk of overlapping development projects, and it prevents people sub-optimising those areas that are not on their radar. The challenge is that
digital sales is not typically thought of as a holistic concept, nor
as something that should lead from the centre of a business.
Getting started does not require massive investments. The first
step is to generate a good enough shared overall understanding
KRISTA PALMU & EERO MARTELA
29
of the value streams of digital sales and to identify the most
prominent investment opportunities based on numbers. Thereafter, it is possible to get started in a lean manner by investing
in a single solution, product area, or service with a limited set of
customers. Scaling to other areas can follow later.
Here you can find a checklist with the MAIN POINTS TO CONSIDER
WHILE STRIVING TO OPTIMISE DIGITAL SALES AND BUSINESS REVENUE.
It is intended for business directors, leaders and managers at all
levels in different-sized organisations and across industries.
1 Get to know the status quo. Most of the problems the company
and people struggle with are not visible to upper management.
Talk to people. Seek to understand their daily struggles and the
customer viewpoint. Call your customers.
2 Identify the role of each service and channel for each customer
group or segment along the customer journey.
3 Identify the relevant business impact and potential for a select-
ed customer group or segment. If there are many services in the
company’s service portfolio, identify the impact per service.
4 Strive to understand which services have the most impact, and
which do not.
5 Assess the level of current investments to determine whether
budgets are in line with business potential. If there’s a mismatch,
take corrective action.
6 Prioritise your efforts. Don’t do everything at the same time and
avoid getting stuck. Start lean.
7 Start optimising and streamlining selected service areas based
on identified key metrics (e.g. customer retention).
30
THE DIGITAL SALES TRANSFORMATION HANDBOOK
FRONTRUNNER STORY:
Spotify
Annina Koskinen,
Principal Designer,
Growth
Opportunities
at Spotify
32
“Before launching our service in India, we
needed qualitative and quantitative insights
to carefully weigh our design, product and
engineering decisions about how to tailor
the experience for the market.
With over 20 languages spoken in the
country — and people often speaking more
than one — we ended up building a language
onboarding feature that lets the customer
choose in which languages they prefer to
receive their music recommendations.
As email penetration is low, we also added
an option to sign up with a phone number.
This has proven to be tremendously
successful!”
THE DIGITAL SALES TRANSFORMATION HANDBOOK
KRISTA PALMU & EERO MARTELA
33
CUSTOMER CENTRICITY
AND CUSTOMER LIFETIME VALUE
AS DRIVERS FOR
SUSTAINABLE GROWTH
Lauri Eurén
All companies should aim to acquire customers with the
highest lifetime value. But to fund the marketing efforts needed
for finding them, revenue from less profitable customers is
needed too. It’s a balancing act that’s tough to get right.
COMPANIES OFTEN SAY they’re customer centric, but a quick look
under the hood quite often reveals activities that are far removed from customer centricity.
A company may use customer-base-wide averages to form its
strategy, then subsequently try to feed a generic brand message
to all its customers. Or it may disregard customer heterogeneity
and value every customer’s opinion equally, when in truth not all
customer feedback has the same value.
The reality is that all customers are different, and no customers are created equal. Some customers are good, some are
worse, and there’s only so much a company can do to try to turn
the less valuable customers into better ones. Some customers
are bargain hunters, and some just spend more on average without an excessive need for the relationship to be nurtured.
The solution is to try to optimise a business based on the
needs of those customers who will likely be the ones bringing
in the most profit over the long term. This means locating them,
acquiring them and retaining them.
In the end, it all boils down to the kind of customers that companies are able to acquire in the first place. So instead of focusing
on cutting costs by minimising cost per acquisition (CPA),
companies should focus on maximising value per acquisition
(VPA). If companies are able to acquire the customers that will
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
stick with them in the long run, customer retention and development activities suddenly become much easier.
FIND YOUR FUTURE BEST CUSTOMERS
Your future best customers are the ones with the highest customer lifetime value (CLV). This is defined as the present value
of all variable profits and costs attributed to a given customer,
including their acquisition cost. To put it simply, it’s the customer’s historical and future revenues, minus all costs attributed to
the customer.
CLV not only shows you whether it was profitable to acquire
a given customer, but also by what margin. The important thing
to understand is that the concept of CLV is predictive; it is not
simply a historical value, as it takes into account the potential
future purchases of customers too.
DO YOU UNDERSTAND YOUR CUSTOMERS’ CLV?
Understanding CLV at the individual customer level is something
every company should strive to do. It is imperative when practising a customer-centric strategy. If a company has no idea of the
predictive CLV of their customers, how can they tell who their
future best customers are?
Estimating CLV at the individual customer level enables companies to divide customers into groups based on their actual value to the company. This is extremely helpful in decisionmaking, as it becomes easier to allocate resources towards n
urturing high CLV customers, and free up resources from activities that are unlikely to yield profitable relationships in the
long run.
CLV can also help to determine a ceiling for the costs of acquiring a customer, as no company wants an unprofitable customer relationship. The sum of CLVs can even act as a proxy for
the valuation of a business, as a company is only as valuable as
the future cash flows of all its customers (on top of the cash
flows of its yet-to-be-acquired customers).
LAURI EURÉN
35
100%
25000
20000
75%
15000
50%
10000
C LV
Share of
customers
acquired
through the
channel
25%
5000
F
Sa i e l
le d
s
Ca C
lli old
ng
O
eb
Fa
c
SE
M
Sh G
o
op o
pi gle
ng
0%
oo
k
r
G ga
oo n
gl ic
e
0
An example chart of customers’ predicted future value based on their
acquisition channel. With only this image as background, how would you
optimise this company’s acquisition channel portfolio?
CUSTOMER-CENTRICITY DOES NOT MEAN THAT
EVERY CUSTOMER IS IMPORTANT
Customer-centricity is essentially a probability game. Companies
try to balance between investing heavily in customers who are
profitable over the longer term, customers who are profitable in
the short- and mid-term, and avoiding acquiring the wrong customers in the first place. This balancing act isn’t easy and many
companies never get it right.
The difficulty of the balancing act lies in the fact that only a
fraction of acquired customers will actually have a relatively high
CLV. In other words, there are usually only a few future best customers. The Pareto principle generally applies in the profit distribution of customers, meaning that 20% of
a company’s customers bring in 80% of its
The reality is that
profit. Often the distribution is even more
all customers
exaggerated, with 1% of customers bringing
are different, and
in 99% of profit for some businesses.
no customers are
To be able to acquire its future best custcreated equal.
omers, a company must first have an idea
of where to find them. Once they're located,
acquisition efforts should be very targeted and done with a
quality-first mentality. But the more precise and targeted
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
marketing is, the more expensive it tends to be. This is why
broader customer acquisition efforts must also be done, as you
need a wide base of customers to fund the more expensive and
targeted marketing needed for attracting future best customers.
Finding the balance boils down to how much effort a
company wants to put into finding its best customers. The more
targeted the marketing a company does, the more it needs the
steady flow of smaller profits from the customers it acquires
through broad acquisition campaigns.
IT'S A MARATHON, NOT A SPRINT
When it comes to digital sales, we often look at short term metrics like cost per acquisition (CPA). This is partly because CPA
is easily measurable, and partly because it provides companies
with actionable insights. It’s easy to set goals and create marketing strategies behind such a simple metric.
Most analytical tools report CPA. And rightly so; it's an important metric as there’s a limit to what a business can afford
for acquisition. However, CPA should not be the main driver
for a customer acquisition strategy, as there's much more upside potential in maximising value per acquisition (VPA) than in
LAURI EURÉN
37
minimising CPA. Although VPA is more difficult to measure, a
business that maximises this metric will solve many of the challenges that come with managing customer relationships.
Optimising a business based on CLV is a marathon, not a
sprint. And this is exactly what makes it harder than short-term
optimisation. The payback period for an acquired customer may
be long, and the customer relationship may only turn profitable
months (or even years) after the acquisition. Hence, a company
needs to have customers with low CPA too, in order to bring
short-term profits that fund the nurturing of more expensive
high-CLV customers until they become profitable.
FIVE THINGS TO KNOW ABOUT CUSTOMER LIFETIME VALUE (CLV)
Whether you’re managing a B2B subscription service, a B2C fashion brand, or any other kind of business, there are five key things
to remember about CLV:
1 All customers are not created equal. Businesses should be
optimised based on customers with the highest customer lifetime value.
2 Customer lifetime value is an estimate of the customer’s
present value to the company, including the historic and future
costs and profits attributed to that customer.
3 There are relatively few future best customers, and many less
profitable ones.
4 Companies need broad customer acquisition efforts. The less
profitable customers can fund the high costs of targeted
acquisition efforts aimed at finding customers with high CLV.
5 Customer centricity is a marathon. It may take a while for
customer relationships to turn profitable, which makes optimising for CLV harder than optimising for shorter term metrics such
as cost per acquisition (CPA).
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
FRONTRUNNER STORY:
Delivery Hero
Roni Eskola,
Senior International
Marketing Manager
40
“Customer lifetime value (CLV) plays an
essential role at Delivery Hero.
We calculate it by splitting our customers
into control groups (i.e. those not influenced
by customer-development activities) and
treatment groups (i.e. those influenced
by the same activities). This allows us to
estimate how certain customer groups
are likely to behave in the future, and how
long their payback period is against our
initial investment. It also helps us to plan
customer-development activities, such as
how to move customers from non-loyal
groups to more loyal groups, or how to keep
customers loyal to begin with.
We have noticed, for instance, that
customers acquired organically are likely to
become more profitable than those acquired
by other means. So it’s important to consider
the source of customer acquisition when
estimating or measuring CLV.”
THE DIGITAL SALES TRANSFORMATION HANDBOOK
LAURI EURÉN
41
POINT-OF-VIEW: This is how you ramp up global B2B ecommerce
sales — Eero Martela with Marta Dalton
An increasing number
of B2B companies are
setting up and
scaling their
ecommerce sales.
B2B ecommerce
expert Marta Dalton,
Global eCommerce
Director at Unilever,
shares the key things
to keep in mind.
While ecommerce in the consumer business
is old news, many B2B companies are
now starting to write their playbooks for
global digital sales. B2B digital commerce
is complex, and many of our clients have
recognised that there isn't a lot of insight
available about launching and scaling a
global B2B ecommerce business.
Marta Dalton is Global eCommerce
Director at Unilever and former Director
of B2B eCommerce at Coca-Cola. She says
there are three important things that all B2B
companies should know about ecommerce:
START BY GETTING THE SALES TEAM
ON BOARD
Dalton says the make-or-break for B2B
ecommerce is getting your own sales team
on board. The sales team typically owns the
customer interface, so they are the ones
who push any new ecommerce system into
customers’ daily routines.
Show your salespeople that ecommerce
is an asset and not a threat. And together
formulate an approach to ecommerce that
ensures a win-win situation between sales
representatives and ecommerce owners.
Most importantly, do not alter the
commissions that salespeople earn. It's
imperative to ensure that purchases made
through the ecommerce platform get
directed to the person or team owning the
account.
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
USE THESE THREE LEVERS FOR GETTING
END-CUSTOMER BUY-IN
The B2B end-customer typically has the
number of a company’s sales representative
stored on their phone. And whenever they
need something, they call. This makes it
a challenge to switch the client's buying
behaviour from calls to ecommerce. So
some work is required to get the client on
board – both to their benefit and yours.
In Dalton's experience, these are the top
three levers for convincing the client that
the change is worth it:
1 Marketing — email marketing is key
2 Marketing telesales — convincing clients
requires active discussion
3 Face-to-face — your sales force is your
most important asset, so make them part
of the change
RAMP UP YOUR LOCAL ECOMMERCE TEAMS
It's not technology you should be focusing
on when launching a new digital sales
channel or entering a new market —
it's merchandising.
An ecommerce business should
be operated as a sales unit, where
merchandising is all about making your
offering and channel fit market demand, and
generating traction. For this reason,
Dalton says the first role you aim to fill when
getting started in a new market is that of the
merchandising manager.
Alongside merchandising, you should
also quickly set up email marketing and
customer-care models. The fastest way to
do so is to generate global templates and
care models for automated emails, and
then translate them into local languages.
Optimising flows can follow later when time
and resources permit.
The same goes for local sales-team
pitches: you should create generic
ecommerce pitches for sales representatives
and translate them into local languages.
Then get local sales teams to use them in
their daily sales meetings.
ECOMMERCE IS NOT AN IT-PROJECT
In summary, technology is just a sideshow to
your ecommerce business; success comes
from getting business processes right
and — most importantly — from treating
ecommerce as a sales unit.
Bringing a digital-sales channel online and
setting up the business processes around it
is just the beginning. After the initial launch,
you should allocate significant resourcing
and investments to merchandising and
continuous sales optimisation. Only then
can a digital sales channel start to realise
the potential it has of increasing revenue per
client, growing market share, and bringing
significant efficiencies to sales operations.
EERO MARTELA × MARTA DALTON
43
A THREE-LEVEL FRAMEWORK
FOR TRANSFORMING
DIGITAL SALES
Sampo Hämäläinen
Transforming sales is not just about introducing
new technology — it’s about changing processes too.
This means building cross-functional growth teams and
an organisational model that supports them.
COMPANIES ARE TRADITIONALLY organised by function, with each
having its own goals. Marketing, for example, is measured by the
number of leads handed over to the sales department. Sales
may be measured by the number of opportunities generated and
deals closed. And IT is responsible for and measured on its development of technology that should help multiple functions.
This functional split means that the customer journey and digital revenue optimisation often take a back seat, or happen in their
own silos. Hence, an increasing number of growth companies
are now organising by customer journey or sales funnel instead.
They’re leaving functional goals and siloed thinking behind for a
new world of self-optimising and hyper-personalised sales funnels with the capacity to predict and meet customer needs.
With this shift from a function-led to a customer-journey
led model, we may see a change in the roles of the ecommerce
manager or sales manager as we know them today. In fact, these
roles may cease to exist in the near future. Consumer sales or
B2B long-tail sales processes — such as pricing, advertising, conversion optimisation, inventory and logistics optimisation — are
all being automated. This frees people to focus on strategic decision-making and key account relationships instead.
To address these rapid technological changes, many corporations have initiated digital transformation programs. But these
programs often lack concrete business goals. The question is:
what should be digitised, and why?
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
The answer is not to talk about tech-driven transformation, but
rather about process digitisation. It's the sales process that is
transforming in both its analogue and digital dimensions. And
this transformation is driven by technology development, customer expectations and globalisation. So in order to compete
in future revenue streams, a company needs to have a digital
sales strategy.
This article presents a three-level framework to address digital sales transformation in corporations.
LEVEL ONE: BUILDING GROWTH TEAMS
The very first step in transforming sales is to break the functional silos along the sales funnel. When customer acquisition
(digital marketing), sales-channel development (IT) and nurturing (customer development) work in separate silos with different
KPIs, you lose money, sacrifice efficiency, and lack a holistic understanding of your sales funnel.
What you need is a growth team: a modern
take on a sales team that optimises the entire sales funnel. A growth team may comprise digital marketers, developers, analysts,
copywriters, designers and a growth owner
who prioritises tasks or experiments. Every growth team member focuses on revenue growth — not features.
We recommend starting with a small growth team and then
scaling up after getting some concrete early results to share with
the rest of the organisation. Aside from revenue growth, the key
outcomes of this phase are increased motivation among employees (as they see the results of their work every day) and significant improvements in efficiency.
The question is: what
should be digitised,
and why?
A cross-functional growth team can also prioritise experiments
based on their business potential. As Lauri Eurén writes on
pages 34 to 41, marketing departments should not be blindly minimising cost per every customer acquisition (CPA). They
should instead focus on converting the leads with the most
SAMPO HÄMÄLÄINEN
47
MARKETER
DATA
ANALYST
UX
DESIGNER
CONTENT
SPECIALIST
G
GROWTH TEAM
GROWTH TEAM
GROWTH TEAM
GROWTH TEAM
Growth-driven
organisation
Autonomous
Processes and roles
Cross-functional
Capabilities
Focus on customer journeys
and revenue growth
48
R
DEVELOPER
Growth team
GROWTH
OWNER
ADVOCACY
RETENTION
PURCHASE
Channels
CONSIDERATION
O
AWARENESS
TEAMS
THE DIGITAL SALES TRANSFORMATION HANDBOOK
A
N
I
S
A
T
I
O
N
GROWTH TEAM
SYSTEM
GROWTH TEAM
GROWTH CULTURE
GROWTH TEAM
GROWTH TEAM
System-level
growth
Architecture
Automation
Culture
Artifical Intelligence
Self-optimising sales funnels
Hyper personalisation
SAMPO HÄMÄLÄINEN
49
potential into customers, and then growing the life-time valueof
these customers.
To read more about setting up growth teams, read Columbia
Road’s THE GROWTH HACKER'S HANDBOOK.
LEVEL TWO: GROWTH-DRIVEN ORGANISATIONS
An organisation that is structured to be growth-driven has an operational model and processes that support the optimal scaling
of multiple growth teams. It’s the organisation’s responsibility to
make sure it has removed all possible roadblocks to creating an
environment where growth teams can work fast, autonomously
and with a strong mandate to own the entire sales process.
Driving an agile, growth-driven organisational mindset requires
transparency, trust and patience. It’s key that growth teams feel
the confidence to be able to communicate to the rest of the
organisation about the needs and pain points that prevent them
from unlocking sales opportunities.
The organisation needs to be responsive to the growth teams’
needs and give them access to information from across the organisation. Growth teams might want to get help from the rest
of the organisation for questions like:
→ How can we reach the most potential cross-shoppers this week?
→ Can we automate an aggressive win-back campaign for the most
valuable clients who are most likely to churn?
→ Can we personalise the digital sales channel experience based
on visitors’ online behaviour?
The task of building digital-sales capabilities of this kind should
not be on the growth teams themselves (their focus should be
on daily revenue creation). The responsibility should lie with digital-sales capability teams or business IT teams that work closely with the growth teams.
Instead of thinking in terms of technology or systems, we need
to think about how we can create customer value every day that
will convert into sales revenue. For example, a data-warehouse
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
program should prioritise solving specific business problems
as quickly as possible. A project of this kind has zero business
value until it goes live.
BUILD ONE VERTICAL STREAM AT A TIME
APPLICATIONS
APPLICATIONS
APPLICATIONS
API
API
API
BACK-END
SERVICES
BACK-END
SERVICES
BACK-END
SERVICES
DATABASES
DATABASES
DATABASES
IT SYSTEMS
IT SYSTEMS
IT SYSTEMS
Prioritise end-to-end value streams over generic IT capabilities
When developing growth-driven downstream processes and related capabilities, it is important to proceed one vertical capability at a time — not to try building horizontal generic capabilities for every possible use case.
For example, you may have identified that a B2B salesperson
could grow sales revenue with a tool that predicts customers’
cross-category needs and helps the salesperson to build a quote
in less than a minute. If something like this is at the top of your
priority list, you should split the problem into smaller parts and
try to validate your hypotheses as quickly and cheaply as possible.
Instead of immediately building a sales configuration application with CRM integration — and deploying a full data warehouse
platform to support prediction — you should rather first validate
the business value with a landing page and a mock-up database.
Only after getting positive results should you invest in scaling
horizontally.
SAMPO HÄMÄLÄINEN
51
Transformation happens ‘slice by slice’ when organisations focus
on rapid value creation rather than horizontal generic IT capabilities. While this means growth teams may see improvements in
their sales capabilities happening only in increments, it makes
them much faster at identifying and solving problems.
LEVEL 3: SYSTEM-LEVEL SALES
Modern startups often focus on their sales system first, and only
build their organisational capabilities later. The reason this is important for established companies to understand is because your
future revenue streams may be affected by new market entrants
who approach sales from a completely different perspective.
When you apply system-level thinking to sales — as startups often
do — then you naturally focus on your entire value network.
The most known examples of this are the multi-sided platforms where one side aims for large volumes while the other
side does the monetisation. The best-known examples include
giants like Facebook, Uber and AirBnB.
However, system level change can also be driven in more traditional environments. N26, Revolut or Transferwise are good
examples of completely new players in the financial-services
industry, running highly-optimised and automated digital sales
processes. They do not try to offer all the same services as traditional banks, but instead focus on creating more value within a
smaller area than traditional banks can do.
Having a narrower focus enables these companies to manage
the entire value network. Their onboarding processes utilise AI
for real-time customer profiling (e.g. credit ratings or hyper-personalised offerings) and their API-strategy connects the service
with other value streams.
Similarly, retailers can provide demand prediction for their key
suppliers and service providers in order to minimise inventory
and delivery time. Energy companies balance between demand
peaks caused by consumers and industry, weather events, fluctuating fuel prices, inventory costs and many other factors that
influence the energy market.
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
Sales, when looked at from the entire value network perspective,
has so many dimensions — all of which affect each other — that
it is impossible for humans to get it perfectly right. This is where
new AI technologies and automation come into the picture.
By automating all of their sales, marketing and customer-service processes to gradually replace growth teams, Level 3 companies create their competitive advantage through both process
efficiency and revenue optimisation. And by offering hyper-personalised customer journeys.
If you still optimise supply and demand only, then you need
to move quicker. Start your first AI or automation experiments
today, and think about the entire value network of your company
when re-engineering your sales.
Read more about the use of AI in sales transformation in the article by Tuomas Syrjänen on pages 104 to 111.
SAMPO HÄMÄLÄINEN
53
FRONTRUNNER STORIES:
TransferWise
Juha Ristolainen,
CTO, TransferWise
for Business
“TransferWise is a global technology company
building the best way to move money around
the world. We process more than four billion
GBP in payments every month, saving
customers around the world over a billion
pounds a year.
To enable TransferWise to move closer
to our mission of offering free and instant
money transfers, a big scaling factor is
growing the non-consumer volume which
comes not from our own applications but
managing our position in the larger value
system by being the best in class platform for
money transfers and enabling businesses and
banks access via APIs.”
UNICEF
Santeri Ihalainen,
Business
Development
Manager at
UNICEF Finland
54
“When you build or transform your business
for better resilience in the digital world,
it’s imperative to understand your customers.
But it is just as important to take care of
the needs of your digital platform when it
comes to data collection, data flow, storing,
labelling, etc.
If these basic needs are not met, the needs
of your flesh-and-blood customers are not
either. This means that to achieve a high-end
digital customer experience, the work begins
in your database.”
THE DIGITAL SALES TRANSFORMATION HANDBOOK
SAMPO HÄMÄLÄINEN
55
HOW TO BUILD A TRANSFORMATION
CULTURE AND MINDSET
Juuli Kiiskinen
Employees react in different ways when faced with change.
Fears may emerge and it can be more difficult for some
than others. Fostering a culture of trust and open
communication is key to getting everyone on board.
WE KNOW THAT change often leads to improvement, yet it’s often
easier to stay in our comfort zone and stick with what we know.
But how can we expect different results or progress in a new
direction if we stick to old habits? We cannot, which is why we
need a culture that enables transformation.
So what does this change mindset look like on a personal,
team and management level? And how can we build a culture
where transformation can take place and new ideas can flow
easily?
ARE YOUR FEARS STOPPING YOU OR YOUR TEAM?
Fear of change and of the unknown is a common stumbling
block that hinders transformation and innovation at all levels.
People are often fearful when they don’t know enough, or when
they don’t feel safe enough. These fears come from a primitive
place inside us all, and they easily surface in the modern workplace — especially when change is required.
Google studied 180 of its teams for two years in a bid to find
out what makes a team effective. The key finding was that it was
less about who was on the team, and more about how its members worked together. And the most important factor for working well together was psychological safety. In other words, trust.
What we can learn from this is that it's important to foster an
environment where people can bounce around new ideas without fear of embarrassment or of making a mistake.
JUULI KIISKINEN
57
NOTHING CHANGES IF NOTHING CHANGES
If you continue to think and work in a certain way, then it's reasonable to assume that outcomes will be the same too. It’s unrealistic to set expectations and define goals at a completely
new level, and yet continue to do things the way they have always been done.
If we want something new to happen, we must be brave enough
to change. And yes, it's scary to leap into the unknown. What if
I mess up? What if this new idea isn’t good enough? What if this
is the wrong move?
Fortunately, there are ways to ease these fears. And the answer is often to be found in the people around us. It's all about
how we communicate with our colleagues.
COMMUNICATION AND TRUST ARE AT THE CORE
OF GREAT IDEAS AND CHANGE
"YES, AND..." INSTEAD OF "NO, BUT..."
The best ideas aren’t often the first ideas. And sometimes the
worst ideas eventually turn out to be the best ideas.
Language is a dangerous tool when used incorrectly — it can
kill a potential idea faster than one can say "no, but..." and explain why they have doubts. Negative language also harms the
feeling of psychological safety in a team, which in turn can reduce motivation and damage productivity.
Ideas need to be discussed, explored, developed and finalised
before they become tangible. So it's essential to create conditions where people feel they can suggest an idea without fear of
ridicule.
WE ALL HANDLE CHANGE DIFFERENTLY
Certain individuals in a team may find change and adopting new
ways of working to be particularly challenging. It helps to remember that these reactions — as previously discussed — are
often drawn from fear of the unknown. It may simply take more
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
time for some people to adopt new thought processes, communication skills and working patterns.
By using mindful language, we can support an individual who
is blocking change or new ideas. Their challenges can often be
resolved by suggesting a new way of working
as a gradual process, rather than as a sudden
If we want
mandate to change overnight. Including peosomething new to
ple in sessions that review how the change
happen, we must
has or hasn’t worked can also help to ease
be brave enough
the pain of the transformation process.
to change.
It’s important to get the most resistant individuals on board with any change, as everyone
has a role in creating the safe and solution-oriented culture
that enables transformation. Change is a team effort.
A TRANSFORMATION TOOLKIT FOR LEADERS
There are several tools that leaders and managers may find
useful when leading change.
TOOL 1: BURY THE HIERARCHY AND ASK, ASK, ASK!
Hierarchy may be standing in the way of innovation and transformation. A good example of this is the ‘HiPPO’ effect (the 'highest
paid person's opinion'), which can be one of the most damaging
aspects for any team’s work. Managers must know when to step
back, and need to respect every opinion, idea and effort from
the team.
TOOL 2: LISTEN. TRULY LISTEN.
There is really listening, and then there is acting like you are listening while actually thinking about other things. It’s good for
managers and non-managers alike to question ourselves about
this. Am I truly listening and considering what the other person is saying? Has my mind already been made up about the
issue before listening to the other person? Listen first — really
listen — and then decide.
JUULI KIISKINEN
59
TOOL 3: GIVE LICENSE TO FAIL.
Nobody will take a risk or go the extra mile if there is fear
of failure and embarrassment in the back of their mind. So be
conscious about how you react to failures, and what type of language is used. Mistakes and failures should happen even more
when an organisation is changing and trying new things.
When a manager wants people to succeed, they need to remember that sometimes these people will fail. Let them to do
so, and support them through it. Failures are best dealt with
early on, and in an open culture there should be no fear of discussing failures or mistakes.
TOOL 4: SHOW, DON’T TELL.
Managers need to be examples of the change they want to see
in others. By modelling the positive change mindset, you as a
manager can demonstrate how to approach transformation effectively, and allow others to follow in your footsteps.
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
TOOL 5: ENABLE A CULTURE OF OPENNESS.
The famous quote "with great power comes great responsibility"
can be applied to managers too. Your words and actions can have
a significant impact on your team's culture, so be sure to communicate openly and be part of actively building the trust and
safety of your team. This also means challenging yourself just as
you expect the members of your team to challenge themselves.
COMMUNICATING THROUGH CHANGE
It's often said that communication is the key to successful
change. And when we are dealing with organisational change,
our fear of failing is the lock we need to open with that key.
Positive and solution-oriented communication injects the
realism you need. Measuring results and recognising areas for
improvement keep even the most visionary teams in touch with
reality. When you have a safe culture where open communication is encouraged, mistakes can be dealt with immediately and
improvements can be introduced in a constructive way.
Trust and psychological safety correlate directly with the
motivation and productivity of a team. So building a culture
and mindset that enable change is a concrete step towards
increased productivity, better results and higher profits.
JUULI KIISKINEN
61
FRONTRUNNER STORY:
Wolt
Oskari Pètas,
Co-Founder of Wolt
62
"Wolt is a great example of a company that
has been able to build a culture and mindset
enabling continuous transformation.
The key to building such a culture
lies in finding the right people and giving
them the freedom to make decisions
quickly and act accordingly. This culture of
autonomy — where decision-making
is decentralised — has been fundamental in
allowing us to rapidly expand to 19 countries.
The teams in these countries have strong
ownership over their decisions. A country’s
GM is considered as CEO of that geography
and is empowered to make decisions quickly –
even on matters that may fall outside of their
official responsibilities.
Giving our employees this level of
freedom requires a lot of trust, which is why
finding the right people to begin with is so
important in creating the culture.”
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63
HOW TO BUILD
THE ARCHITECTURE FOR
SALES AND MARKETING
Ville Loppinen & Ilkka Rämö
Getting things right at the architecture stage means
fewer technology challenges down the line.
Companies should start with a real business need,
scale gradually and keep an open mind.
WHEN BUILDING THE architecture for sales and marketing and its
related areas of operations (such as a customer database, CRM,
marketing automation, ecommerce, and other customer services) it would be easy to plan and execute each of these areas
separately. But doing so is often a mistake, as it means a long
system-development project that yields value to the business
too slowly. Also, it may result in a system that only serves the
needs and goals of an individual department, rather than the
business as a whole.
The best way is to build the architecture gradually, validating
each investment based on reliable data and enjoying positive results that grow your business at the same time.
The key to this is collaboration and cooperation between
different departments within an organisation. Identifying and
breaking organisational silos is the groundwork to build up from.
This requires continuous and effective communication between
departments, identifying common needs, setting business goals,
and making improvements in the most impactful areas.
HAVE A REAL BUSINESS NEED BEHIND EVERY INVESTMENT
Often, decisions about sales and marketing architecture are made
by an IT department that wants to build and maintain a perfect
puzzle. But it’s important to remember that technology is a tool
with no meaning in itself. Every investment should have a real
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business need and a target behind it. Targets, sales, data collection, IT, customer care, and value creation should all be driven
by the business and its goals.
We have seen that building a sales and marketing architecture is most successful when it is jointly engineered alongside
running business-based growth experiments that follow direct
business metrics. After successful and productive results from
the growth experiments of MVPs (Minimum Viable Products), the
experiments should be scaled into continually evolving and data-driven architecture components (such as a customer-data
platform, or a marketing-automation or ecommerce platform).
Communication throughout the entire company is key. If the
goals of the different functions are not aligned with business
goals, it’s unrealistic — or even impossible — for an individual
department to work efficiently and create business growth. Real
growth-experiment results are the key to balancing and prioritising what to develop and when.
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BUILD FROM THE BOTTOM UP —
GRADUAL SCALING HELPS TO VALIDATE INVESTMENTS
When building any architecture — no matter how complex — it is
good to start with a simple core question: what are we trying to
solve, and how are we going to do it while simultaneously testing
business results and validating future investments?
Sales and marketing architecture that spans all domains
of the organisation is a huge investment. The earlier the investments are validated and the results are tested, the better.
This is why we recommend ongoing experimentation, continuous measurement of business targets, and gradual scaling of
proven areas.
VALUABLE LESSONS FOR BUILDING A SALES AND MARKETING
ARCHITECTURE:
1 Keep asking the question: what are we trying to solve?
2 It's less risky to build from the bottom up. Start with smaller
testing and MVP experiments, as this means lower costs compared to large one-off investments with uncertain results. Lower
costs mean the possibility for more testing and therefore more
data. Build on top of knowledge, reliable data, and measurable
results. This works even when the end result is a large system or
net of systems.
3 Growth hacking and experimentation work. This includes many
trial-and-error projects to achieve successful results, and requires a company culture that is open to transformation and
working towards a common business goal.
Sales are done more and more in digital channels, so the link
between sales and IT gets tighter all the time. The key input
and needs for continuous decision-making come from sales
and marketing engineers who, on a daily basis, try to serve and
win customers. And again, all these scaling decisions need to
be aligned to real experiment results. Two scaling examples to
take note of:
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1
A MARKETING-AUTOMATION IMPLEMENTATION PROJECT
Marketing automation tools need data to work with. But this is
often a bottleneck, as it takes a lot of resources to implement
enough data into a system. Selected data integrations within
smaller areas have been proven to work well as a basis for learning, before scaling with more integrations.
We have even proven the power of automation without any
actual technical automation. In this case, the “automation” work
was done manually to mimic a marketing automation system in
order to prove the business case. The results of the test spoke
strongly on behalf of automation and justified the investment.
2 A CRM PLATFORM PROJECT
Going from an easy-to-use sales tool to a holistic customer relationship management ecosystem (containing predictive forecasting and automated sales process) is where salespeople are
optimising the process. As CRM is there to boost sales, the process of building the platform starts with interviewing a few sales
experts and having their input on what they need in order to
sell more. The same is done with customer service. Combining
the results means we can create a truly efficient CRM platform
and do the necessary integrations in the right order.
These examples display how the building of a sales and marketing
architecture can happen at the same time as the business is
growing. Investments such as these shouldn’t be isolated projects
that are built for the future. After all, no one knows what the future holds, and customer behaviour and digital sales are changing
fast. Continuous communication, experimentation and measurement form the base for the architecture needed today.
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FRONTRUNNER STORY:
HappyOrNot
Esa Vasara,
Director of
Business Services
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HappyOrNot is a global leader in creating
solutions for gathering instant feedback
from customers and employees.The company
has aimed at global markets from day one,
so it created an architecture that gave it the
agility of a startup yet the ability to scale
globally. It achieved this by using leading
cloud-born platforms and extending the
architecture with cloud-based add-ons.
In its early days, HappyOrNot focused on
creating a connected sales pipeline with
both in-house and channel sales capabilities.
The technologies enabling the architecture
were chosen so that the company would be
able to manage all the touchpoints of the
lead-to-customer-to-cash flow process
as efficiently as possible.
Over the years, HappyOrNot has managed
to build a connected customer flow with
minimal number of handovers between
organisational or technology silos.
Inbound marketing and marketing
automation generate a healthy pipeline
of global leads. Warm and nurtured leads
are fed to the sales channel, and both the
company’s internal salespeople and its
channel salesforce send quotes quickly and
efficiently. Sales heads have a great degree of
visibility to this entire funnel.
The company’s after-sales process is
efficient too, with the customer-service team
having full access to customer data. Billing
is done transparently based on quotes, and
renewals are handled by sales.
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THE THREE DEGREES OF
AUTOMATED SALES
Antton Ikola
It’s still early days for sales automation. But by experimenting
now with use cases based on real business needs, companies
can already get ahead of their competitors.
MARKETING AUTOMATION HAS BEEN around for more than 20 years,
and today many organisations reap the benefits of automated
emails, segmentation, account-based marketing, and more.
While sales automation is built on the same core of customer
data as marketing automation solutions are, the principles and
degrees of automation in sales are still largely undefined.
We need to start by aligning the systems and processes between sales and marketing, as this then enables the functions to
work seamlessly towards the same goals. Sales and marketing
managers and leaders need to understand how to find the critical use cases for the business, and the potential and limitations
of new digital tools.
THE CURRENT STATE OF SALES AUTOMATION
Currently, sales-automation processes can best be described as
point-to-point solutions: i.e. self-service digital sales platforms
ranging from traditional B2C ecommerce to selling complex configurable solutions in the B2B environment. There are also the
much hyped — but not necessarily validated — new tools like
chatbots and call automation.
Most of the current sales automation solutions available today
automate only a small part of the customer journey, such as identifying new sales opportunities, sending emails, automating tasks,
performing sales call analysis, analysing next best actions and
creating proposals. But it is still difficult to see how these tools
integrate into sales processes and the architecture as a whole.
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WHAT CAN AND SHOULD BE AUTOMATED
At the end of the day, you can’t automate everything in sales.
This is because sales is a trust-game and the bigger the sell, the
bigger the need for face-to-face interactions to instil that mutual trust.
Thinking of the different sales use cases to automate, it is good
to start with business specific goals and opportunities, as well
as bottlenecks in the customer journey. On a more general level,
the main goals of sales automation fall into two categories:
1 Increasing sales efficiency (i.e. automating repetitive work done
by salespeople)
2 Increasing sales effectiveness (i.e. automating value-creating
interactions)
You need to serve both goals in order to succeed in holistic
sales automation. The reality is that nearly two thirds of a salesperson's time goes into non-revenue-generating tasks (Time
Management Sales Study 2017). Most salespeople say their
favourite deal-related activity is relationship building (Day in
the life of Salesperson, Salesforce).
Not everything can be automated, and nor should it be. From
a technical point of view, you could automate a lot. But from
a return on investment perspective, automations that eliminate
minor tasks performed once every month for 10 minutes is a
wasted effort.
The more complex problem is to understand from the customer experience point of view which automations are effective.
All automations aiming to increase effectiveness should be
subject to proof of value for the customer before starting the
project.
ENABLING SALES EFFICIENCY WITH AUTOMATION
Customer data is the catch-22 problem of sales automation: If
you don’t have data, you cannot build efficient sales pipelines,
and if you don’t have efficient sales pipelines, you don’t have
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71
the data or time to enable effective sales. The same salespeople
who would want to use customer data are usually responsible
for maintaining and enriching that data. So the whole subject
of data collection and management creates a huge issue with
time to value.
The starting point for sales automation is having a flexible
enough customer relationship management (CRM) tool or customer data platform (CDP) in place, complemented with tools
that automatically enrich that database from 1st or 3rd party systems. The key to enabling efficiency is getting relevant customer data — such as contact details, transactional and behavioural
data — into a format that can be readily utilized by sales automation tools.
INCREASING SALES EFFECTIVENESS
The next important question is how to further develop the
effectiveness of sales through automation. At this stage, we
can start to think of how to automate the management of the
customer base — including segmentation — and how to enable
automations in the different phases of the customer journey.
It's worth looking at advanced dash-boarding and AI-enabled
suggestions of next best actions at a customer-level. Through
experimentation, you can find new ways to make relevant
segmentations and combine those with concrete sales activities.
At this stage, buyer personas will not be based on demographics,
but rather on complex customer cohorts that describe similar
customers in terms of multiple attributes.
SALES AUTOMATION NEEDS EXPERIMENTATION
But there is still a gap: how to align new capabilities and insights
from sales automation systems with concrete sales activities, either in digital or offline. Effectiveness is enabled by
automating core revenue-generating sales activities, but all new
use cases need to be validated in their early stages by manual
experimentation.
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Hence, the next level issue is how to scale the implementation of new automation use cases even further. Having systems
that, in theory, enable effective sales automation, is not enough.
They need to be complemented by proactive ideation and
experimentation from people with a business- and customer-driven mindset. Furthermore, when the needs of customers
change, we need to revise core automations to reflect these
new needs.
The roadmap to sales automation need not be difficult. It is
not mandatory — indeed, not even recommended — to start
building a perfect platform before knowing possible use cases.
However, it may be necessary to tackle and re-define any
not-so-lean sales systems and processes. Some companies may
need to start right at the beginning by introducing modern technological capabilities.
Sales automation is still in its early stages. Being a first mover
always comes with risk, but learning from first movers in marketing automation, the best way forward seems to be to build
the business case first, then experiment lightly and automate
one core use case at a time.
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FRONTRUNNER STORY:
Smartly.io
Jaakko Talvio,
Head of Nordics
at Smartly.io
74
“Digital advertising is evolving rapidly, driven
by automation.
Just a while ago, online marketing used
to be about tinkering with the technical
specifications of campaigns. But as the
platforms mature and the algorithms evolve,
there is limited competitive advantage to
be gained from constantly tweaking these
details.
Increasingly, automating the full
advertising process — from creative to
management, optimisation and testing —
will play an even bigger role in converting
digital sales. We've noticed that the fastest
growing advertisers created 11×more creative
assets than others, while also having a 23%
lower cost per incremental buyer when
constantly testing and optimising their
creative output.
Needless to say, a large and concrete
part of automating marketing will also be in
automating the creative process.”
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BUILDING A SUSTAINABLE
COMPETITIVE ADVANTAGE WITH
THE RIGHT DIGITAL ARCHITECTURE
Juho Jutila
Companies should build their digital infrastructure
through a use-case approach. Microservices that
solve specific problems lay the foundation
for long-lasting growth.
IT COULD BE THE mantra of our time: go digital, or suffer a slow
death. And it’s not enough to just do the things that everyone
else is doing; companies are expected to find unique selling
points, make everything scalable, and change all the time. In a
world of legacy systems and organisational inertia, going digital
can be a difficult journey. Fortunately, every step can be made
to count.
By this I mean that becoming a master of the digital game is
something best done in increments. Every move along the path
can and should bring value that accumulates in a sustainable
competitive advantage.
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THE PROBLEM OF CHANGING AN EXISTING BUSINESS
Typically, the evolution of an enterprise leads to duplicated and
fragmented data across multiple systems. It is hardly a surprise
then that data quality is often poor too. These systems also tend
to have various integration points and dependencies that make
changing them an expensive and cumbersome undertaking.
But complete process and system renewals seldom make
sense. Rare is the context where a monolithic system solves
things once and for all.
So how do you change everything without creating a cascade of
process failures? How do you justify investments in mega projects that have a risk of dragging on for years and years?
The answer is: you don’t. You need to start small, while
thinking big.
START BY PRIORITISING YOUR USE CASES
Customer and end-user centric development can be viewed
through a use case methodology that helps you to prioritise
between projects. Different organisations have different ways
of doing this, so there is little point in diving into the details
of business-case formulation. It is enough to say that there are
ways to assign business value to alternatives.
Let’s run through an example journey on this. We’ll start with
a case involving Customer Information, which is especially important when creating a new Customer. The business case behind this kind of selection might be related to improvements in
the quality of Customer Information, for example.
In a microservices-driven architecture, a service dealing with
all the queries and modifications related to customer info is
created first. It can start as a simple function with a dedicated database behind it. The database can only be modified by
this microservice, which is operated through an interface. For
those with the proper credentials, this interaction offers access
to customer identifiers and data related to any other service
too. New prospect creation is still handled in the CRM system,
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77
but the CRM system asks the microservice to create a new entry
and then uses the information that the service returns.
By extension, whenever a change in customer information
takes place, it must be made available to the CRM system via an
interface that the service provides. As this service is implemented, all the systems in the landscape that are involved in new
customer creation must be enhanced to utilise it. Depending on
the landscape, it might not be feasible to immediately upgrade
all the customer information systems so they can utilise the new
microservice. That’s why the change is limited first to the systems that are involved in creating the new customer entry. As a
side effect of this change, the customer creation process also
becomes harmonised across the landscape.
NEXT STEPS IN THE MICROSERVICES JOURNEY
In our example, the first microservice lays the foundation for
further cases. Next, we might consider creating a microservice
that handles inputting new orders. Order intake capability is an
essential part of any business. Depending on the scale and the
nature of business in question, it might involve several channels, customers, countries or products. If this is the case, then
simply divide and conquer them through business case analysis
and prioritisation. In some cases, a new microservice will need
to be created, and in other cases an existing one can perhaps be
modified to meet the need. After implementation, all new orders
within the scope must be routed via the new service.
At this point the microservices approach reveals a benefit beyond process consolidation: the New Order Entry must utilise
the already available Customer Information service. This way the
data integrity and quality in new orders is guaranteed to be in
line with the customer information.
When it comes to order input, new customers get created and
existing ones get treated through a harmonised interface that
carries responsibility for Customer Information. The arrangement does not guarantee data quality, but it clearly defines the
responsibility of the service and where to address quality issues.
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After we’ve started with Customer Information and Order Input, we might look into Order Management. Tracking orders and
changing them deserves a microservice of its own. Again, completeness of first iteration and a possible implementation order
need to be considered.
The interplay of Customer Information, New Order Input, and
Order Management processes provides numerous benefits. We
could continue describing additional services, but in order to
understand the rationale behind the approach, we have a sufficient set of them to take our thinking further.
THE POWER OF MULTIPLE SERVICES
When the services work together they present requests to each
other. When the New Order Input service operates, it will ensure
using or creating a proper customer ID from the Customer Information service.
The Customer Information service might also make a request
to update expired contact information, for instance, while dealing with the request and checking the data. The other microservices must support this functionality through their interfaces so
that the request gets handled properly.
After the introduction of the initial microservices, not all the
tools and processes use them. Since they are essentially orchestrator services, there is no need to consider converting open orders. As incremental implementation proceeds, the same systems that handle the transactions still run them — they just do
their interfacing a bit differently.
When it comes to considering the order in which to implement the services, in general it is better to look at breadth first.
Instead of developing a microservice to cover the whole range
of responsibilities, focus on completing a set of microservices
representing the end-to-end journey that provides a complete
transaction and experience to the customer. This way the architecture approach can be proven. After an end-to-end reference
has been made available, additional use cases can be considered that bring more processes and systems into play.
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When the fundamental microservices are in place, additional
services can be built on top of them. Audience creation based
on Customer Info and Transaction History is very useful —
especially if it can be enhanced with data from digital marketing and website browsing. Is there an interest in experimenting with AI? It can be approached so that it interfaces with the
microservices and provides insight through its own interfaces.
Handling GDPR-related requests becomes a breeze too. Let’s
take a look at the case of a customer asking to erase all data.
The Customer microservice that receives the request through a
user interface simply checks the other microservices for legal
grounds that prevent the deletion of all data. After the facts are
available, the necessary steps can be taken. Finally, the service
can inform the customer that the request has been fulfilled, or
list the reasons that prevent it from being completed. Since all
the data entry and manipulation is orchestrated by the microservice layers, we can be sure that all the relevant viewpoints
have been examined and finally acted upon. If you add an expiration date to all data entries, then you automatically have a way
to implement privacy by design.
Microservices also help in separating the systems of record
from systems that engage with users. The events that trigger the
services to act can be almost anything. The end-user experience
can be enriched by any available data or analytics source without interfering with the foundational layer or creating a load with
more official responsibilities.
In this model, there will always be microservices that do
not implement business logic rules. On the other hand, it is
very easy to create services on top of them that do implement
these rules.
RUNNING AN ENVIRONMENT BUILT ON MICROSERVICES
After the completion of the first entire journey, the existing microservices can be further enhanced. Again, the priorities must
be assessed through business case analysis. Additional source
systems or new functionality can be added in increments as
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specified by the needs of the use case. By now, solid architecture principles have been established. For example, guaranteed
interfaces do not mean that things cannot change. Inevitable
changes must be handled with API versioning, cross-service
regression testing, and an applied version of Change Advisory
Board.
Since the data is always in a service specific database, it is
never accessed or modified through anything else but the service managing it. Systems that utilise the microservices in a
proper way always go through these services when they need
something outside their own data.
Since integrations are now towards the microservices, changing a system becomes easy. In addition to migration of system
specific data, only integration with microservices is needed. Rigid
point-to-point integrations diminish as time goes by. The architecture becomes more and more modular when the implementation proceeds. The flexibility of an IT and process landscape is
on a completely different level now. New, market-facing services can be introduced in a rapid fashion without compromising
the integrity of data. Since they can utilise the available set of
services, there is no need to build everything from scratch. Even
the existing services can be enhanced in case there is a need to
provide new functionality to a wider set of services.
The problem with a microservices driven architecture is not
technical. In the end it requires a change in mindset and culture.
Instead of organisational silos, people must start focusing on
solutions and fulfilling use cases. A lot of the known discipline
is still needed during the journey towards an organisation with
a sustainable digital edge. It just can’t be achieved through old
ways of working alone.
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POINT-OF-VIEW: The complex task of mastering digital sales in a
traditional organisation —
Antti Kleemola, CDO, VR Group
Transformation is
coming to companies
in all industries —
including
traditional ones like
transportation.
Antti Kleemola,
Chief Digital Officer
for Finland’s national
railway company,
VR Group, explains
what it looks like
from the inside.
The transportation market is changing
rapidly. We could even use the buzzword
disruption to describe the change.
Investments are being made in developing
door-to-door services built on top of
existing transportation infrastructure. Any
actor in this setting must understand the
customers’ needs first, and then operate in
a very lean and efficient way. The key is to
learn faster than your competitors.
Finland's railway service operator VR is no
longer focusing only on railways and trains.
VR has become a transportation service
company for both people and goods. It plays
an important societal role and ensures an
eco-friendly logistics network.
The change has been successful in many
ways. 95% of VR’s sales are direct to
consumer, and more than 80% already come
from digital channels. Between January and
September 2019, long-distance passenger
numbers grew by 9.3%. Mobile sales are up
44% from the previous year.
SUCCESSFUL TRANSFORMATION TAKES
PLACE IN INCREMENTS
Competitive dynamics demand that
everything that can be flexible, must be
flexible. And decisions need to be proactive.
Since VR is in a position to invest, now
is the time to improve the service that
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customers are getting. This change must be
realised in small steps. There is little or no
point in trying to do everything at once, and
a complete transformation may take years.
In that time, things may have changed again,
so you need to drive change in increments
as small as possible. This way you’ll keep
the agility that is needed to respond to
changes in the environment, while being
able to grab opportunities that technological
development brings.
Of course, you must first understand
what the starting point is. Without the
basics in place, fancier stuff is just smoke
and mirrors. In digital sales, the basics are
a system or set of systems that can execute
transactions. On this level, the focus must
be on meeting the essential requirements for
running the business, and fulfilling the legal
aspects of bookkeeping and requirements
for an audit trail. Many people know it as the
“systems of record”.
A well-functioning base allows the
creation of components that meet more
specific customer needs. A richer experience
can then be provided through captured data
and clever analytics using systems that can
read any and all data sources.
Basically, all customer events must be
captured for later use. In some cases, even
external data sources can be used to enrich
the captured data. This description is
naturally a very high-level one. Nevertheless,
all architecture and systems-related
decisions should reflect it.
An excellent example is VR's decision
to build a lot of the analytics capability
on top of AWS Cloud Services, which
essentially captures all data available
from customer interactions. Amazon and
other cloud players offer many options
within their ecosystems. It is flexible, but
currently, organisations are trapped with the
cloud service provider they have selected.
Although, the world is going towards multicloud setups in order to avoid vendor lockins and rigid limits.
At this point in time, Amazon offers the
best tools for development and integrations,
Google leads with data management, and
Azure offers the best experience for digital
office workers. Being present in all these
spaces provides a more comprehensive
understanding of where the cloud is heading.
A multi-cloud setup also reduces the risk of
vendor lock-in and offers freedom to utilise
new services wherever they become available,
in the most cost-efficient manner.
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83
SOLVE THE PROBLEMS THAT
UNLOCK VALUE
Organisations have a high risk of seeing
systems as solutions. Systems as such
have no value. At best, they are
enablers that make it possible to
solve a primary problem.
Without understanding this relationship,
systems are created for all the wrong
reasons. The approach and decision making
must not be based on organisational
structures, but on people who benefit from
them. It is essential to organise around
customer value, and question the purpose of
any tool or process from this perspective.
When it comes to customer value,
proving the whole end-to-end value chain
is the first order of business. This kind of
customer experience can be proved by
faking it — i.e. with processes without a
connection to a transaction system, handled
via manual steps. After the concept has
been proven, connecting the front to the
transaction systems can be considered. At
that point, an architecture approach that
structures the work and keeps the system
landscape flexible is worth gold. Finding
people who can apply it in daily work is even
more valuable.
A good example of this approach is
VR’s personalised multi-channel customer
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communication system. Instead of a massive
amount of detailed upfront planning of
the to-be all-in-one marketing automation
system, we wanted to understand the
customer use cases. Soon we figured
out that we can meet both disturbance
messaging and marketing-related
communications with the same approach.
By building on top of ready-made AWS
components, we were able to provide endto-end communications services for pilot
users. The solution is flexible, and we’re
able to enrich it with user-friendly marketing
tools in the future.
It is essential to
organise around
customer value,
and question the
purpose of any
tool or process
from this
perspective.
SOMETIMES YOU NEED TO BREAK THINGS
TO CHANGE THINGS
Driving change in a complex organisation
is not a small task. If established ways of
working have not been dismantled properly,
the culture and mindset will never change.
In order for change to succeed, enough
patience and trust must be provided within
the organisation. It is not something that
happens overnight.
A good example of changing the mindset
is the way some organisations utilise
existing components and products. They
are not fixed on the idea of customising
everything, but instead create value through
understanding the business drivers and then
recommending the best ways forward.
potential that can be unlocked by new
ways of working.
This means dealing with sales automation,
artificial intelligence, and complementary
digital and physical sales channels. For all
this to succeed, we need to transform our
sales with ingenious strategy and a new kind
of approach to culture. This culture must
embrace small changes and experiments.
There is a big difference if you use 100 or
1000 workdays for something. By limiting
the scope, we eliminate the need to downwrite big investments. In this setting,
people must accept that at least half of
the experiments fail, and it is ok as long
as you keep learning. Courage to kill failed
experiments enables us to run fast with the
ones that offer real potential.
There is so much technology available
nowadays. There is no need to re-invent
everything AWS Cloud Services provides,
but rather to build on top of it. If an
organisation is able to adopt this kind of
thinking, they are on their way to
maximising value creation in the long run.
Driving digital growth is getting more
complex. Good results can be achieved
through clever growth hacking involving
development, design, and marketing
technology. But soon we will face a world
where this is not enough. We need visionary
thinking and agencies that understand the
ANTTI KLEEMOLA
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THE THREE TRENDS DRIVING
DIGITAL SALES TRANSFORMATION:
AUTOMATION (AI), SUSTAINABILITY
AND CHINA
Lauri Eloranta
It’s not just technology driving digital transformation —
global megatrends are also playing a role. There are three
in particular that companies need to be aware of.
SALES AND MARKETING are going through massive transformations.
Old ways of working and organising activities have been replaced
by new digital tools, systems and processes during the past decades. At the same time, consumers’ online shopping habits are
changing and evolving.
As digitalisation has been, and still is, the main enabler for
this change, many organisations have been quick to adopt digital
into their core business. The digitisation agenda has, according
to McKinsey, finally reached the corner office and is now on the
top of the priority list for many CEOs. The effects of this can be
seen by everyone inside modern companies.
While CRMs, self-service portals and chatbots are becoming
common practise for many organisations, the forerunner companies of today are already building more holistic sales and marketing architectures. All best-of-breed companies operate their
sales capabilities with cross-functional ways of working, and
growth-hacking methods where sales, marketing, IT and business all work together in the same team.
But this is not enough. In the ongoing sales transformation
story, this is just the beginning. Flexible sales architecture, a
digitally-enhanced customer experience, and ongoing revenue
optimisation enabled by a growth-hacking organisation: this is
the winning formula of today. But in order to succeed in the future, every company needs to keep evolving.
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DIGITALISATION AS ENABLER
DIGITAL SALES TRANSFORMATION
AUTOMATION
AND AI
SUSTAINABILITY
CHINA
Key drivers of digital sales transformation
There are three major trends that every sales organisation needs
to be aware of to make themselves future proof.
1 AUTOMATION AND AI
In the medium- to long-term, the automation of digital sales —
achieved with artificial intelligence — will be the biggest force
transforming sales. The successful organisations of today are
already looking for ways to scale their sales operations exponentially with new automation and AI-powered technologies.
Companies automating their sales are aiming for two gains: 1)
achieve cost savings through highly-effective and efficient use of
sales, marketing and customer service resources, and 2) scale
revenues with automated revenue optimisation throughout the
customer journey.
In practise, automation and the use of AI will be visible in extremely high-level customer personalisation, fully-automated
advertising, fully-automated optimisation and growth-hacking
processes, fully-automated outbound and inbound sales, and in
fully-automated customer service. Customer lifetime value will
be optimised automatically in all customer channels and touchpoints — without any manual work.
LAURI ELORANTA
89
Further in the future there will no longer be, for example, ecommerce managers, media buyers or tele-sales personnel as we
know them today; everything and beyond in sales and marketing will be done through automation and artificial intelligence — leaving more time for people to focus on customer
interactions and service. Roles and responsibilities in sales
and marketing organisations will look completely different in
the future.
2 SUSTAINABILITY
While automation and AI are the biggest trends driving the
change inside the sales organisation, sustainability is the major
force driving the transformation of sales in the outside world.
Customers' online shopping habits in both B2C and B2B are
changing rapidly, along with the rising awareness of sustainability and widespread worries about global warming. Today, customers already require a new level of environmental responsibility from companies they are doing business with.
The requirement for companies to work towards a more sustainable world is a real
challenge for many traditional businesses,
but at the same time many companies see
it as a true business opportunity. Transforming sales towards more sustainable business
models will create new business areas and
opportunities, but it can also increase revenues and improve company cost effectiveness in the medium term.
Flexible sales
architecture,
a digitally-enhanced
customer experience,
and ongoing
revenue optimisation
enabled by a
growth-hacking
organisation:
this is the winning
formula of today.
The circular economy, for example, will be
a game changer for a large number of digital sales organisations. A good example on
this front is IKEA, which is rapidly changing
from a sales focus towards also renting furniture (furniture as a
service). For many companies, the focus is no longer on selling
more in quantity, but on selling more in higher-price categories
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and thus — indirectly — selling less in quantity. In other words,
customers will be consuming less, but paying more for higher
quality. This may also provide better overall margins, although
it depends heavily on the context of the manufacturing process
and the dynamics of the purchase.
The best companies in the future will be known for highlyefficient, cost-effective and sustainable manufacturing processes that produce high-quality products consumers are willing to
pay a premium for.
But will the change in consumer mindset ever be big or fast
enough to bring about this new paradigm? It may well be that
while we are waiting for the mainstream to change their customer
behaviour, new sustainability-focused regulations and taxation
models will — in the short and medium term — push companies
towards these kinds of operational changes even faster than the
coming change in customer behaviour will. An extra sales-tax
for non-sustainably produced products or services might be a
reality in the not-too-distant future.
Foreseeing exactly how the change will happen is difficult — but
it will eventually happen. Sustainability will bring major changes
and create opportunities for sales transformation in, for example, the following three areas. Many of our customers are already,
if not implementing, then at least considering how to approach
these topics:
SUSTAINABILITY AFFECTS SALES FOCUS
→ Driving the customers’ focus from high volume and low price
products towards low volume and high price products. In other
words: increasing revenues by selling less.
→ More focus on selling (sustainable) services instead of products
→ Showcasing the sustainability aspect of all products and servi-
ces sold throughout the customer journey
→ Pushing through digital sales and growth activities on business
tracks that are based on sustainability
LAURI ELORANTA
91
SUSTAINABILITY AFFECTS BACK-OFFICE SALES PROCESSES
→ Transforming logistics and delivery processes to minimise the
carbon footprint from back-office logistics processes by moving
towards order-to-delivery customer facing interfaces
→ Transforming sourcing and manufacturing processes to better
cater to new sustainability requirements
→ Transforming return processes to minimise costs related to
returns, but at the same time minimising the carbon footprint of
delivery and maximising product lifetimes
SUSTAINABILITY BRINGS NEW BUSINESS OPPORTUNITIES
→ Opening up to circular-economy and peer-to-peer related busi-
ness opportunities in sales and after-sales
→ Building businesses around returns and secondary markets for
products
→ Transforming business focus from product manufacturing to
services around the products
The list above is far from comprehensive, but it demonstrates the breath of opportunities in transforming sales towards
more sustainable business. And, as with automation and AI,
new ways to build sustainability in sales are made possible by
digitalisation.
3 CHINA
People tend to think that innovation in digital commerce is coming from the United States, and in particular from Silicon Valley —
but this is no longer the case. For years, China has been the key
driver of innovation in retail, ecommerce and digital sales.
Companies in the Chinese market are already doing things we
still see as being from the future. Chinese ecommerce, for example, is years ahead of what the rest of the world is used to.
A long time before people had heard the first stories about
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Amazon's Go Cashierless Store, there was already a chain of
similar stores running in China. Today, there are hundreds of
cashierless stores around China.
China is also a massive market on its own, and even minor
changes in its domestic economy can have a drastic impact on
businesses far away. China is, among other things, a big importer of many raw materials, as well as semi-finished-products.
It has a major footprint in the global B2B market too. China’s
middle-class is also exploding in size, and more and more of
that middle-class is spending money in digital channels —
creating a huge online market for companies both inside and
outside of China.
It's well documented that China faces some critical challenges.
These include criticisms related to human- and labour-rights violations, as well as loose manufacturing and export regulations
that can be very different to regulations in the EU and other western markets. China has also had major problems with sustainability and environmental issues. Many may see this as a counter
force to sustainability, but a potentially more sustainable China
also represents a huge opportunity.
It is far from unproblematic to do business in China or to compete with Chinese companies. So companies should be able to
answer the inconvenient questions above before attempting to
take on the market and its many competitors.
China is a complex and vast market to comprehend, and its
impact will be big in many digital-sales related areas. Therefore,
you need to keep an eye on the different effects it has on online
sales in the short run and over the long term — even in cases
where you are not doing business directly in or with China.
LAURI ELORANTA
93
FRONTRUNNER STORY:
TWOTHIRDS
Columbia Road
Research
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Companies are facing increasing pressure
from consumers to make their products
and distribution channels more sustainable.
Digital sales channels offer an efficient way
to do this.
TWOTHIRDS is a Barcelona-based
clothing company that considers
sustainability and responsibility throughout
the lifecycle of their products. This means
making clothes that are usable for a long
time and have a minimal environmental
impact. TWOTHIRDS takes pre-orders
on their website and only manufactures
these clothes, addressing the fact that
approximately 1 out of every 10 newlymanufactured garments is never sold.
All TWOTHIRDS’s products are produced
in Europe. This is not primarily to reduce
transport emissions (fabric and garments
almost always have to be transported
somewhere), but rather so that the company
can ensure manufacturing is done in a
socially-sustainable manner. A big part of
TWOTHIRDS’s vision is to spread awareness
and knowledge about sustainability, which
they do via their online marketing channels
and through content marketing.
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THE (UN)SUSTAINABILITY OF
DIGITAL SALES
Victoria Vabre
Adopting sustainable business behaviour is not just an act
of corporate social responsibility — it’s fundamental to a
company’s brand and bottom line. Sustainability is also driving
innovation in ecommerce services and business models.
THE EXPECTATIONS AND VALUES of consumers have changed in re-
cent years, and they are now more aware than ever of the sustainability credentials of products. As the threat of global warming has become a reality, we regularly see people marching for
the climate. These same people make choices on whether they
want to buy from a certain brand or not.
Consumers are becoming increasingly aware of the impact
that digital sales has on the global climate. The complete product chain — from production to at-home delivery — is adding to
worldwide pollution levels, and the future of digital sales needs
to exceed the ever-increasing expectations of customers and
everyone else associated with a brand.
Sustainability is currently a powerful branding and marketing
message, and will be even more so in the future as consumers
sway towards sustainable service providers. As such, it’s in every
company’s best interest to strengthen their brand’s association
with sustainability.
Building a sustainable digital sales strategy has the potential
to improve business results. This is not only because a sustainable ecommerce brand appeals to conscious consumers, but also
because the whole digital sales process is more effective when
fewer resources are wasted.
It is essential that every company and individual take action
to lower their carbon footprint. It is highly likely that the product
chain will be regulated by more laws in the near future as the
environmental crisis calls for new action. For instance, as part of
its circular economy law, France has passed new legislation that
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
bans producers and retailers from destroying unsold food and
non-food items.
CORPORATE SOCIAL RESPONSIBILITY —
CHANGING THE PROCESS AND MINDSET
Sustainability is no longer an issue solely involving product
manufacturing, marketing, or delivery. Now it's about the company's process as a whole, including scrutiny of its mindset
and values. Businesses are waking up to this and new roles in
sustainability are being created for employees. Having a dedicated professional looking into the sustainability of an entire
process — all departments, new legislation, and communication
around sustainability (both internal and external) — is advised
for businesses involved in digital sales.
“The true test of a responsible company is when all functions
and departments are capable of minimising their own negative
impacts and are thinking about making a positive impact on their
community.”
— Alberto Andreu Pinillos
SUSTAINABILITY REQUIRES A CRITICAL LOOK INTO THE
MINDSETS OF BOTH THE ORGANISATION AND THE CONSUMER
The change towards sustainable business practises can be driven from the company’s digital sales process operating models. A
great example of this is the “preorder” model, where goods are
only manufactured once an order has been placed. This reduces
the waste of overproduction, which is a huge problem globally.
Another strategy that some companies are using is the “drop”
model, where only high quality garments are sold, and in limited quantity. The point is to sell out all stock. Brands like Supreme and Sézane have been quite successful with this model.
For consumers, the experience can be quite frustrating, as the
best garments sell out in a few seconds. But from a sustainability perspective, the advantage of using such a model is that there
is usually no waste.
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The “upcycling” model — a way of processing an item to make it
better than the original — and the “recycling” model — converting waste into reusable materials — are also gaining popularity.
For example, the company Lovia makes leather bags out of excess high-quality materials from leather couches. Rothy’s makes
washable, woven flats out of recycled plastic. Precious Plastic
Bazaar is a platform to buy and sell items made of plastic. And
Tilli is a French startup that connects seamstresses with consumers to breathe a second-life into unused or old garments.
LOW-HANGING FRUITS FOR MAKING BEHAVIOUR
MORE SUSTAINABLE
MAKE SUSTAINABLE PACKAGING CHOICES
These actions include, for example: going paperless where possible, reusing packaging material, using thinner packaging tape,
optimising packaging, and recycling more.
Some companies have been very innovative in tackling these
issues. For example, RePack is a reusable packaging service
where delivery packages can be returned and reused. Recently,
Zalando has launched a pilot test to use RePack’s shipping bags.
PAY ATTENTION TO LAST-MILE DELIVERY
According to a research conducted by B2C Europe in the UK,
Netherlands and France, 75% of customers would be willing to
wait longer for their parcels if they knew that opting for a shorter
delivery period resulted in more air pollution and congestion. This
is something that should be highlighted more in the purchase
funnel when the customer is looking at the delivery options.
End users like to have choices for delivery options, and studies have found that customers are more loyal to brands that offer a premium delivery and return experience.
The three main elements to take into consideration within digital sales are: price, speed of delivery, and place of delivery. To
improve sustainability, we need to look at the whole product
chain — from production to delivery. Research has found that of
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the overall journey of a package, the last mile is the most problematic. The last mile of a package has been researched extensively because it is both the most expensive and the least ecological. It represents 20% of the final cost of transport.
Home deliveries are subject to problems such as the customer not being at home when the delivery arrives, which adds to
the unsustainability of such deliveries. The simple solution is to
improve communication with the customer in the sales process;
to clearly inform them about the price and time of delivery.
There are also several alternative delivery methods currently
making their way into ecommerce and already being tested,
developed and used:
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99
LOCKERS
DOOR-TO-DOOR DELIVERY
BY APPOINTMENT
All delivered packages are
grouped in a single central
location. From the retail perspective, lockers offer a solution
that saves time (and therefore
resources) for the delivering
company, and yet is still secure.
End users also benefit as they
can decide the time of the pick
up, and use the same locker if
returns are required.
Door-to-door deliveries can be
improved simply by making them
appointment only. To lessen
the environmental impact of
the delivery, alternative delivery
methods include options such
as bike, drone, walking, public
transport, and autonomous car.
DRONES
AUTONOMOUS VEHICLES
In 2013, Amazon announced
they wanted to use drones to
deliver globally. Since then, DHL,
UPS, Google, La Poste, JD, and
Starship Technologies have been
developing their drone systems,
and this idea is still being
thoroughly investigated.
But there are many issues with
drone deliveries, including the
fact that they are forbidden
in some areas. Also, the
ethical aspect of using them in
residential neighbourhoods needs
to be discussed.
CONCIERGE
Renault’s innovation of an autonomous delivery concept featuring
shared customisable robo-pods
is creating interest in the delivery
industry. End-customers choose
where, when and how to receive
their deliveries.
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Autonomous vehicles are one
of the examples of how AI
can reshape the ecommerce
transportation industry, and the
testing of autonomous delivery
trucks is already happening by
DPDHL.
Pizza chains have already
recognised the potential of this
technological development. In
the US, Ford and Dominos have
teamed up and plan to have a
fleet of autonomous vehicles
delivering goods on US roads by
2021. Toyota and Pizza Hut have
similar plans and testing is due
to begin in 2020.
COURIER COMMUNITIES
New courier operating models
are already being tested and
developed. For example, the
Stuart operates with the aim of
reducing the ecological impact
of transport, using an algorithm
that offers low-price transport
and optimises deliveries in
on-demand areas.
USE DATA TO MOVE TOWARDS MORE SUSTAINABLE AND
TRANSPARENT DIGITAL SALES
As the use of data and AI develops, customers will have access to
more tools that help them choose the most sustainable options.
In webstores, for example, we will be able to set preferences
on things like delivery speed, environmental impact, and how we
engage with the value chain.
New technologies in automation and process optimisation are
also becoming available. Data analysis can be used to anticipate
the demand of goods in a particular geographic area, for example,
and to prepare packages beforehand. Analysis and optimisation
can also focus solely on improving the last mile, while simultaneously improving the traceability and security of deliveries.
Improving sustainability in digital sales is not just a branding
exercise. It benefits a company's bottom line too, as fewer resources and goods are wasted, and processes are optimised. In
short, it can have a direct positive impact on the business. By
using operating models like pre-ordering or optimised deliveries,
sales risks can also be lowered.
There is a constant stream of new players entering this field,
so more and more options are available all the time for making
your ecommerce business more sustainable.
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FRONTRUNNER STORY:
Sharetribe
Juho Makkonen,
Co-founder & CEO
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Sharing platforms have become a popular
way for consumers to maintain their
purchasing habits and standard of living
while decreasing consumption and waste.
Sharetribe creates marketplace software
solutions that companies can use to build
their own sharing platforms and websites.
Camera manufacturer Canon has used
Sharetribe’s solutions to create a platform
for Canon owners to rent their cameras to
other consumers. It's a win-win-win: the
consumer can use a camera without buying
one, the camera owner gets rental income,
and Canon may acquire a future customer
by giving people the chance to try out
products first.
The platform also sends a strong
message that Canon’s cameras are durable
and that the company promotes sustainable
living. It brings the Canon community closer
together too.
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AI IS TRANSFORMING SALES
Tuomas Syrjänen, Co-founder, AI Renewal at Futurice
AI has the power to connect your salespeople, processes
and customers in ways that completely transform your
sales processes. It’s about building a company where
everyone and everything is geared for growth.
AI IN SALES and elsewhere is often discussed in the context of
automation. For example, the automated buying of advertising
space, or personalising marketing and offers. But the role of AI is
much broader than just automation in the digital channel when
one is building a Level 3 system in sales transformation (see
pages 48 to 49).
AI enables the building of highly-effective systems that connect the efforts of various channels. This enriches the internal
and external insights that are used for sales success, making
it possible to hyper-personalise offerings to customers and the
advice given to your own sales personnel. AI can also help in assimilating daily activities into a strategic agenda.
In short, AI automates and enables new behaviours that lead
to systemic sales successes across an organisation.
AI is often discussed in terms of its algorithms — Bayesian
inference, deep neural networks, regression, kNN (k-Nearest
Neighbours Algorithms), etc.— as well as in terms of capabilities
like prediction, recommendation, matching, clustering, natural
language processing, and more. It is important to have some level of understanding of these topics, but there are already thousands of ready-made tools available that make sense of this
complexity.
The challenge is not in understanding the AI tools for sales,
but in first knowing which sales problems are worth solving, and
then understanding what the most suitable tools are. Whether
using existing off-the-shelf tools or ones that are custom-made,
one needs to know what the problem is before the tool can be
adapted to solve it.
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AI HELPS PEOPLE TO SUCCEED IN SALES
Typically, B2B and B2C sales are seen as very different. B2B is
person-to-person driven, B2C is digital-channel driven. But this
division is blurring as digital tools bridge the gap, allowing efficient person-to-person interactions with consumers, and intelligent digital interactions with B2B buyers.
Person-to-person sales behaviour is typically at one of two
extremes: it either follows a strict one-fits-all process, or it's
laissez-faire autonomous and takes neither the client nor the
sales person's preferences into account.
AI-powered technologies, however, enable structured and personal support for sales people in areas such as:
→ Understanding clients better. Instead of laborious focus groups,
interviews, etc, customer reviews across the internet can be analysed with the help of AI. The digital footprint (sensor data, data
from interactions) of products and services can also be analysed
and used for direct customer insights
→ Following clients, relationships and relevant relationship/role
changes that trigger new opportunities: e.g. Nudge.ai
→ Identifying market developments as triggers to contact clients
based on recent events and upcoming topics
→ Analysing which new opportunities are most likely to turn into
a sale
→ Optimising personal processes, automated coaching and similar
e.g. People.ai, Persistiq, Chorus.ai
→ Content creation — producing more effective texts, infographics
tailored to a specific client, or even real time suggestions of
responses during a sales call
→ Next best action — provides suggestions for follow-up actions
that maximise desired KPI such as sales volume or profitability
→ Scaling interactions — e.g. chatbots, or conversation tools like
Conversica or Exceed.ai
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→ Analysing past cases to improve the content and structure of
future deals
→ Automatic enrichment of product information in ecommerce
…and many more
HARNESS THE WHOLE ORGANISATION FOR SALES
Sales can also be seen in light of helping clients succeed via
matching their products and services to client needs. Typically,
there are many more people coming across client needs than
just the sales people. Therefore, in buildIn short, AI
ing the Level 3 system it is important to
harness
every client interaction — even a
automates and
maintenance visit or a support call — and
enables new
turn it into an opportunity to identify arbehaviours that lead
eas to serve your clients.
to systemic sales
successes across
an organisation.
One of the systemic changes enabled by
the AI-powered sales tools listed earlier
is that we can harness everybody in the
organisation towards sales. We can help
front-line people to identify the right opportunities and connect these to the company offering. In a similar fashion, the insights of front-line people feed insight to a company's dedicated
sales personnel.
USE AI TO BUILD A CONNECTED COMPANY
Companies, especially large enterprises, need to manage complexity by dividing the body corporate into clear functions and
smaller units. The downside of this is that we lose a holistic/
systemic approach to running the enterprise, where feedback
loops could be used to optimise operations.
Data and AI can re-build connections via different parts of
the organisation, and enable us to feed insights in various directions with the key aim of helping different functions and units
to succeed.
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CONNECT SALES TO DOWNSTREAM PROCESSES SUCH AS:
→ Sales funnel and order-intake to workforce and production
planning
→ Forecasting and executing optimal logistics
→ Informing suppliers based on forecasts and real order-intake
Naturally, some tightly-coupled supply chains — such as in the
automotive industry — have been sharing information in the way
for a long time, but data and AI enable more and more industries
to reach the same level.
FEED SALES WITH INSIGHTS FROM OTHER PARTS OF THE ORGANISATION:
→ Insights from the finance department can be used for profitably
optimising the sales mix. Finance data also enables you to find
recommended offerings for different clients
→ Optimised sales focus based on production bottlenecks, and
balancing strategic targets and short term financials
→ Feeding external information into the optimisation in cases such
as price changes, or the availability of certain key components
from vendors
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AI CHANGES BUYING TOO
While building AI-powered sales transformation, we need to
remember that an increasing number of similar tools are available
on the buying side too, where customers can optimise the buying
process, their selection, and pricing (via auctions, for example).
One interesting consequence of this data and AI transformation on the buyer side relates to marketing, especially brand
marketing, where grandiose claims like 'Bank Y — For All Your
Banking Needs', are traditionally hard to validate. The power of
these claims lies in the fact that buyers do not have the tools or
the ability to analyse each offering in detail, and to connect the
benefits with their needs.
This may change when we have sophisticated AI-analysis capabilities that compare the offering side to one's own needs, and
make minimally-biased decisions on which offering is best for
the buying organisation. The natural consequence of this change
is that vendors need to make sure they provide data and facts
that enable automated comparisons.
KEY THINGS TO CONSIDER WHEN IMPLEMENTING
AN AI-POWERED SALES SYSTEM
The data and AI transformation space is filled with challenges
around data platforms that fail to deliver business value, and
tech-driven experiments that fail to materialise in production
value. Many implementation projects lack a clear business agenda, which alienates business leadership from the efforts.
In order to avoid these pitfalls, we recommend the following:
1 Identify the business driver(s) /value lever(s) most relevant to
your business. Is your value lever client centricity, marketing,
cost efficiency, market responsiveness, or something else? Make
sure your experiments and implementations address this value
lever. This is crucial in order to be business relevant and gain
acceptance to the new approach, as it supports how an organisation creates success.
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2 Identify any behavioural gap that is currently holding your organ-
isation back in relation to 1. The behavioural gap can be either on
the customer side, or related to how work is carried out by your
own employees. The power of defining the scope via behavioural
change lies in its measurability, and especially in the speed of
that feedback.
3 Identify experiments that address the behavioural gap. Use
static data sources, review off-the-shelf products, or create
a customer AI solution. It depends on the situation, but at all
times keep yourself honest about whether you are generating
the desired behavioural changes. Validate the change via
measurement.
4 After iterating the business value, behavioural gap and solutions,
your own coherent agenda emerges.
5 Start building production capabilities, including data platforms
and roll-out plans. Remember to keep validating your agenda.
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FRONTRUNNER STORY:
Microsoft US
Columbia Road
Research
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Microsoft’s Global Demand Center uses AI
to support the company’s sales reps in their
daily activities. The three main solutions —
all built on Azure — are Lead Optimizer,
Daily Recommender and Sales assistant.
The Lead Optimizer utilises AI models
and machine learning to qualify and score
leads, improve customer nurturing in real
time, ensure continuity of experience,
and optimise the next best actions for
conversions. The Daily Recommender does
a seamless handover of highly-ranked leads
with a “next best action” recommended
in the customer journey. And the Sales
Assistant is a personalised sales rep portal
that saves time, helps in serving customers
better, and improves learning among
salespeople.
Since launching three years ago, the
platform has been rolled out to 1000 sellers
and reached a point of maturity where results
are beginning to show: now 1 out of every 4
recommendations pursued by sellers results
in a customer opportunity or an engagement.
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DATA SCIENCE IS THE FUTURE
OF DIGITAL SALES
Laura Purontaus
When directed at the right problems, data science is
a powerful tool for scaling sales capabilities.
Off-the-shelf SaaS products make it easy for companies
to start experimenting in this area.
HOW CAN WE make data science insightful and profitable?
Well, what do you want to improve? Sales? Marketing? Or do
you want to introduce tools that make buying easier? Or make
deliveries more efficient and faster?
Data science for sales should serve exactly these areas, and ideally help you to find new opportunities for improving sales too.
In a company setting, data science should serve the success
of the company. Its purpose is not to be scientific for the sake of
it, or to discover interesting things. The primary purpose of data
science is to generate sales.
Data science and data scientists are experts in solving complex problems that involve large data sets, using methods from
computer science, statistics, mathematics and information science. Results cannot be obtained if there is no data, and if the
data is not collected correctly, there will be problems with the
analysis. For example, if we want to understand why people return their purchases, we cannot analyse the issue if the reason
for the return is not recorded, or if the categories are too vague.
TREAT AN INVESTMENT IN DATA SCIENCE AS YOU TREAT
ANY OTHER INVESTMENT
Even though data science sounds fancy, it can be treated as a
regular investment. What are the costs involved? What are the
expected returns? What would be needed to get it to work?
For example, if you compare an out-of-the-box recommendation system with a customised system, is the customised
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system able to produce sales so much higher that the improved
performance can cover the investments needed for developing
the system? If yes, over what time period?
ASK THE RIGHT QUESTIONS,
PLAN THE RIGHT ACTIONS
Data scientists take responsibility for the steps their work requires. But, in order to achieve business results with data-science
methodologies, two things should be done. First, you should find
the problems worth solving. And second, you should plan the
actions once there are some results.
It might turn out that the time from the first lead to the contact
is very long, or that it varies by sales agent, country or another
dimension. Or it might turn out that the website is a key factor
in omni-channel sales, and — seen from that
point of view — it is obvious that it is missing
At the end of the
some crucial information. Data scientists can
day data science
answer questions like “how big is this probshould serve
lem?” and “is it worth solving?, and produce
the first hypothesis of “why” something is
the same purpose
like it is.
as the rest
of the company:
business success.
The "after analysis" step is about deciding on
the next actions. "Now that we have this information, how do we turn it into business
benefits?". For example, we may want to
know if some products are performing worse than others, so
that we could either fix their product descriptions, re-price the
products, or stop selling them completely. Or we may want to
know which products are sold together, so that we could use
the information in our advertising materials and increase the
basket size.
The remedies to the problem cannot be thought of before
there’s more clarity about the issue in question, but the data
science work should always be about the next step of: "what are
we going to do with this information?"
LAURA PURONTAUS
113
DATA SCIENCE IN A NUTSHELL
The prerequisite for a data science project is having data. The
better the data, the better the analysis. That said, data will never
be perfect, so you may as well start the work today and improve
the data collection once you run into problems. Data science
work and projects typically consist of the following steps:
1 Problem definition
2 Finding data, cleaning data, connecting data sources
3 Exploratory data analysis and visualisation or modelling
4 Result analysis and communication
5 Taking the results into use: developing dashboards, implementing
models as part of company products or processes (this step may
never take place if the data indicates there is no point in taking
something further)
Thinking from a cost-effectiveness point of view, it’s a good idea
to automate reports, visualisations and routine actions once you
know what is needed. Data science has its best returns on investment when used for more difficult analysis.
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THIS IS HOW DATA SCIENCE SCALES SALES
Data scientists typically work with large data sets. As a result,
they are able to perform analysis on a scale that would normally take an army of analysts. Analysing the sales performance of
products and product areas is relatively easy when you have,
say, 50 products. A bit of work with Excel and asking for some
opinions, and the reason why that red jacket keeps coming back
from the customers becomes clear.
But what if you have tens of thousands or hundreds of thousands of items? A million, perhaps. Fortunately, data science
uses tools and methodologies that can handle and analyse large
product sets. Which products or services are sold together? Are
there typical shopping baskets or orders? Are some products or
services performing worse than others? Can you predict this?
Data science methodologies can generate insights in cases
where it is extremely hard to go through the products one by
one,even if there would be an army of product managers performing the job.
Data scientists can also work on automating sales processes.
Sometimes it takes a lot of manual work to prepare an offer for
a customer and close the sale. Obviously, this is not scalable.
So when sales are capped by a manual operations phase, data
scientists can assist by automating operations. Perhaps a loan
decision would not need a personal meeting and a sales clerk
writing the papers? Or maybe an offer could be made to another
company with a tool that helps the sales person with a prediction of a probable selling price?
GET STARTED WITH OUT-OF-THE-BOX TOOLS
Even though in-company data scientists definitively understand
the business of that particular company, there are a number of
out-of-the-box tools you can use to get started.
Digital sales can be improved at many points with SaaS based
data science tools. For example, in user acquisition that could
mean better budget allocation, ad space buying, or content
LAURA PURONTAUS
115
choices. On an ecommerce website, that could mean recommendation engines or personalised content. It doesn’t usually
make sense to build these tools from scratch.
However, you might need help from a data scientist or a data
engineer to choose the right SaaS tools and ensure that the essence of these tools, data, is of good quality and that the tools
live up to expectations.
CREATING BETTER BUSINESS
WITH DATA SCIENCE
Although data science projects include many technical and
mathematical steps, at the end of the day the practise should
serve the same purpose as the rest of the company: business
success. Data science can and should be thought of as an investment that also yields returns within a given time frame.
Data science is a tool just like any other technology. You can
only reap the benefits if you use it to solve actual business problems, and act on the learnings. So before you dive head-first
into data and algorithms, make sure you know what you are trying to solve with data, and what the potential impact on your
business can be.
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POINT-OF-VIEW: Winning companies already use machine
learning in digital sales — Patricia Åkerman with Risto Siilasmaa,
Chairman of Nokia and F-Secure
Risto Siilasmaa is
an entrepreneur
who divides his
time between Nokia,
F-Secure and 30
other companies,
helping them grow
and become world
class. He’s also a
family man,
a published author,
and a student of
machine-learning
architecture and the
Chinese language.
In your view, how has data changed sales?
I have been an investor in Small Giant Games
from the first friends and family round. I was
not convinced that the game would be great,
but I was impressed by the team. When
the game shipped, the usage data from the
players showed that it would be a big hit
even if the game was still not something I
fell in love with. At that point I had to make
a decision: to trust the data over my own
personal preference.
The first example I've seen of a really
impressive data analytics platform came
from another game developer, Supercell.
They had built a predictive system to
estimate customer lifetime value from a very
small amount of usage data. This can be a
huge competitive advantage to a gaming
company, as they can adjust their customer
acquisition costs based on real future cash
flows from those customers.
Naturally, for a B2B business, it’s a very
different game. At Nokia, we have built
a customer perceived value index —
a statistical model based on customer
surveys. We use it to try to predict market
share shifts, to assess our and our
competitors’ competitiveness, and to predict
sales. It allows us to see where we’re behind
(by region, country, categories, products
and even strategy).
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We see a lot of startups doing amazing things
within digital sales, and bigger companies
are falling behind more each day. How can
we change this?
In Europe, we don’t have as many big
digital companies — where digitalisation
is part of the company’s DNA — as there
are in in Silicon Valley and in China. So
we need to find ways to talk about digital
sales transformation with the leadership
in traditional companies in a way that
resonates with them. We can already see
great examples of huge shifts in entire
industries. The business models of airplane
engine companies, for instance, are moving
away from selling the engines towards
charging customers based on uptime.
So how can we help these companies?
What’s the journey from strategy to
implementation?
Change needs people who own it. Change
needs processes and strategy. Change
needs to come from the inside, but it can be
kindled with guerrilla projects that aim for
the leadership’s attention.
Like I said earlier, there is so much that
companies can do with the data they already
have. But it's a shame that so much data is
either not being collected, or is not being
used in meaningful ways. In digital,
a customised offering is one of the best
ways — sometimes the only way — to
differentiate from the competition. Creating
customised products based on the data you
have about your customers makes it harder
for them to churn. It’s all about loyalty and
stickiness.
What would be your best advice for bringing
machine learning and AI into digital sales?
First of all, you should be using machinelearning already. If you are not, shame
on you. At least you should do some
experiments.
As with all technology, it’s just a tool you
need to learn to use. The important thing is
to have a constant push to become better.
The most difficult thing about machine
learning is to decide what questions to ask.
You will get the most probable answers to
any question, but you need to come up with
the questions first.
PATRICIA ÅKERMAN × RISTO SIILASMAA
119
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THE DIGITAL SALES TRANSFORMATION HANDBOOK
Why do you think customer-centricity is
only now gaining global traction?
As with most things, interest fluctuates.
Customer centricity was big in the 80s,
and it's now coming back. Digitalisation is
enabling unprecedented ways to collect data
and machine learning is doing all that used
to be done through manual work.
At F-Secure, we collect seven billion
events every single day. We need to go
through these to evaluate which are
malicious, and which are not. Every day we
see 200,000 samples of possible malware,
out of which 2,000 are malicious. There is
no way that an army of human beings could
go through all that data, and without
making errors.
In general, companies have a lot to gain with
AI. Statistically speaking, big breakthroughs
will not come from Europe, but from China
and the US, where a lot more is being
invested into AI. But it does not mean we
can’t get lucky here in Europe.
All companies want to be bleeding edge,
they want future-proof solutions and
sophisticated methods. So let’s make that
a goal we can all work towards.
How can companies make better use of AI?
For the near future, many companies can
just focus on picking low-hanging fruit.
There is no need to do research in AI —
just use what is already there.
PATRICIA ÅKERMAN × RISTO SIILASMAA
121
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