Digitalisation not only affects the way businesses meet and beat future challenges – it also pervades ongoing business activities. In fact, sales and marketing were among the first ground-breaking digital functions (e.g., the move of advertising onto the Internet). It is essential to consider the best place to reach the customer and how to communicate with them in a digital world, even more so in light of the current trend of decreasing customer loyalty to a particular company or its products – see, for example, the result of a banking study by IBM,[1] which found thatÂ
‘… a new generation of financial technology companies are … threatening to reduce the incumbents to settlement agents of last resort’.
At the end of the nineteenth century, information and advertising gained increasing importance due to rapidly growing markets with previously unknown competitors – the discipline of ‘marketing’ came into being. Marketing, on one side, is about the creation of a desire to buy a product or service and thus the promotion of a sale. On the other side, marketing, a core function of market-oriented corporate leadership, is about the satisfaction of the needs and expectations of customers and other stakeholders.[2]
In order to generate a buying desire, it is necessary to reach the customer in appropriate ways.Â
Various media are available for this purpose. According to the SevenOne Activity Guide 2014,[3] television (82%), radio (70%) and the Internet (62%) are the most frequently used media in Germany. The importance of the Internet equals that of television in the 14–49 year-old age group, given that they already spend more time than their elders on the Internet, which is growing at the expense of traditional media.[4] Also, the parallel use of the Internet and television is increasing.[5] Choosing the right channel to reach the customer is an essential criterion (see figure below).[6]
In fact, one can clearly see that company focus and expenditure are moving digital channels. Digital media is gaining significant importance, especially considering the convergence of television and the Internet. Digital pioneers, the so-called ‘digirati’, are taking advantage of this trend and creating a competitive advantage.
A study by MIT and Capgemini shows that such digital pioneers increase their sales and achieve higher profits simultaneously.[7] The goal is to drive the customer to a buying decision as quickly and as early as possible, without wasting time.
The understanding of customers, business relationships and value chains changes significantly during the digital transformation.
In this context, it is crucial to closely align digital opportunities in sales and marketing and integrate them with the actual product or service. Products alone are no longer sufficient for differentiation in the market. Companies must look at their products from the customer’s point of view and offer complementary products and services to customers from an end-to-end perspective. Many recent developments provide examples of such possibilities. First are car manufacturers, currently designing the ‘connected car’, where passengers receive valuable personalised information about their environment displayed on the windscreen or on headrest monitors. Evening television is an example of a service that is already digital, but where the digital opportunities are not yet fully utilised. Soon it will be possible that the actors’ clothing, the equipment in the show’s ‘apartment’ and perhaps even the apartment itself could be offered for sale. In a related approach, the US television series ‘Project Runway’, hosted by Heidi Klum, allowed the winners to sell their apparel through online channels. Through augmented reality, individual customers can receive detailed information depending on where they focus their eyes, reaching online retailers that offer precisely this product, and are able to order directly. Nike, through the work of its digital unit and ‘Nike+’ initiatives, has embedded itself in the lives of its customers and is able to continually promote its offering.Â
Digital marketing and digital sales truly impact a company’s operating model, transforming both the demand chain and the supply chain.
For such targeted marketing approaches to work, information on customer behaviour must be extracted from the media channels. It is important to know which products or product categories are popular, not only for a particular customer group, but also for the individual. Cross- linking high-quality data and communication content are essential to bind the customer to the company. Interconnecting information and user tools are at the core of addressing customer needs at the right time, in the right place, and in the right emotional mood. A consistent user benefit experience across all offered analogue and digital channels ensures an additional positive experience for the customer.
The company’s interactions with the customer need to be managed throughout the entire customer life cycle, from the moment of awareness of the company until the customer becomes a company advocate.
The digitalisation of the customer relationship, which goes beyond traditional CRM, enables completely new possibilities to coordinate these diverse stages of the relationship between the company and the customer.
Sales and marketing are essential parts of the digital business model – they have to be transformed alongside other company functions. Technology drivers such as social media, mobile services, analytics, the cloud and the IoT (collectively abbreviated to SMACT) must be leveraged, but also a consistent level of service quality must be provided across all channels. In the case of the IoT, machines may even become potential customers in addition to people.[8]
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[1] Brill, J., Drury, N., Lipp, A., Marshall, A., Wagle, L.: ‘Banking redefned – Disruption, transformation and the next-generation bank’, IBM Institute for Business Value, 2015.
[2] Meffert, H., Burmann, C., Kirchgeorg, M.: ‘Marketing: Grundlagen marktorientierter Unternehmensführung. Konzepte – Instrumente – Praxisbeispiele’, Gabler Verlag, 10th ed., p. 10ff, 2007.
[3] Neumüller, G.: ‘Media Activity Guide 2014’, SevenOne Media, p. 8, 2014.
[4] ZenithOptimedia: ‘Internet wächst auf Kosten traditioneller Medien’, Statista, 2015.
[5] SevenOne Media: ‘Anteil der Befragten (14 bis 49 Jahre) in Deutschland, die Internet und TV häufg, manchmal oder selten parallel nutzen in den Jahren 2001 bis 2016’, Statista, 2016.
[6] McNair, A., Holmes, R.: ‘Dimension Data’s 2015 Global Contact Centre Benchmarking Report’, Dimension Data, 2015.
[7] Westerman, G., Tannou, M., Bonnet, D., Ferraris, P., McAfee, A.: ‘The Digital Advantage: How digital leaders outperform their peers in every industry’, Capgemini/MIT Center for Digital Business, 2012.
[8] Sandel, D.: ‘5 Faktoren für digitale Geschäftsmodelle’, CIO, 2014.
