Managing Partner at Regalix Inc.
With the frenzied early weeks of the Covid-19 pandemic behind us, organizations are emerging out of crisis response and embarking on the road to revenue recovery and acceleration. However, adapting to the new normal is no easy feat, as the extended effects of the sudden downturn continue to unfold.
For instance, in a survey of B2B sales professionals, 66.7% of respondents expressed low confidence in hitting sales targets this year, and only 12.5% felt highly confident in doing so. Another study found that the pandemic has caused 55% of B2B buyers to cut budgets in 2020, 24% to cut existing vendors and 45% to halt projects or stop work with existing vendors.
However, this is also a moment of opportunity for organizations that can successfully pivot their business processes toward the new normal and its accelerated changes in buyer preferences and behaviors.
The new normal demands a more customer-focused mindset.
We now know that customer experience is a key revenue differentiator for B2B sellers, as much as it is in B2C. In a 2019 study, 84% of business buyers said that the experience they receive from a company is as important as its products and services, and 73% of buyers said that trust in companies matters more than it did the previous year.
The pandemic has only strengthened these trends, emphasizing the need for a balance between seamless digital experiences and trustworthy interactions with a human touch. However, B2B organizations trying to catch up with changing demands face significant challenges:
• Traditional forecasting and existing customer data have become inaccurate, as the pandemic has radically disrupted demand patterns across sectors. What’s more, the impact of the pandemic is felt unevenly in different local economies, industries and segments.
• Rapidly changing market conditions and customer expectations are forcing organizations to rethink business models and product offerings. Digital self-service and remote selling, for instance, are likely to play a significant role in the B2B go-to-market strategy of the future.
• While organizations have worked to transition quickly to digital sales, building seamless buying experiences remains a challenge. For example, 45% of U.S. customers still find B2B buying online more complicated than buying offline, according to one study.
• With businesses everywhere struggling to ensure growth amid tightened budgets, proving value in relation to customer outcomes has become a priority.
The Levers Of Revenue Acceleration
Overcoming the challenges thrown up by the pandemic and ensuring revenue acceleration and recovery requires a significant focus on key strategies, consisting of an “outside-in” and “inside-out” view, as illustrated below.
1. Building granular customer insights.
Given the pandemic’s uneven impact, identifying growth opportunities requires a granular knowledge of how customer needs and expectations have changed, segmented by geography, industry, business vertical, market segment, etc.
Companies will need to relook at the customer journey to understand what the customer’s priorities are now and design use cases and customer experiences based on these new insights. This requires centralizing data from across the entire customer journey, from marketing to sales to customer success and other customer-facing roles, as well as from consumer research, social listening and online search.
Identifying customer definitions of business goals and parameters of success should be the key focus, as should determining which crisis-induced patterns will continue in the new normal and which pre-crisis patterns will resume.
2. Adopting outcome-based selling.
B2B buyers are facing severe pressure to prove the ROI of their investments. In such a scenario, vendors seeking to prove the value of their solutions have to adopt an outcome-based focus oriented around business outcomes targeted by customers.
The key to building this focus is the ability to demonstrate clear links between the process gains offered by product offerings and the targeted business outcomes. Vendors should not focus narrowly on sales and implementation alone but work closely with customer organizations to bring about the process and behavior changes needed to achieve the desired outcomes. Though the word “selling” occurs here, the outcome-based approach cannot be implemented by sales teams alone — it requires the support of multi-modal, consultative processes driven by all client-facing teams.
1. Promoting rapid experimentation and innovation through psychological safety.
According to Harvard Business School professor Amy Edmondson, “Psychological safety is a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns or mistakes.”
As a Forbes article explained, lack of psychological safety in organizations can lead to loss of important mindshare because team members fear the consequences of speaking up and sharing new ideas or raising emerging concerns and threats in the workplace. It can also hinder innovation.
With customer needs changing, business models and go-to-market strategies have to evolve continuously, which means organizations need to innovate rapidly. Re-bundling product lines, tailoring offerings to new use cases, extending repayment facilities and rethinking pricing beyond heavy discounting are some of the key requirements.
The need for customers to have a safe experience has put the onus on companies to develop new practices and capabilities, such as the use of contactless payment and delivery methods and the ability to provide support and maintenance services remotely. In building flexibility, as McKinsey & Company research suggests, it’s important to adopt a startup mindset oriented toward quick action and optimization on the go, rather than delayed research and analysis.
2. Developing organizational agility.
Traditional organizational structures dependent on long lines of decision making and siloed operation cannot meet the challenges of the new normal. Flatter decision-making structures for everyday operational decisions, held accountable by comprehensive measurement and analysis, can make organizations more efficient and responsive. Building cross-functional collaboration for providing transparency of customer intent and behavior and encouraging smooth hand-offs between different customer-facing roles and teams can also go a long way in improving customer experience.
Planning for revenue acceleration and recovery is the need of the hour. Organizations need to bring a comprehensive end-to-end customer experience focus in all customer-facing functions to be able to meet the expectations of buyers in this changing environment.