Taking B2B Growth To The Next Level
Let a deeper commitment to data integration help bring you closer than ever to customers.
Harness the power of data integration to provide more powerful B2B solutions
For B2B suppliers, finding ways to strengthen and increase the value of the solutions they provide is a proven and effective way to accelerate growth. Over time, solutions-driven companies have moved beyond the predictable precepts of “solution selling” and product bundling to solve important customer problems by linking products, services and advice in ways that deliver significant customer value. Hewlett-Packard’s move to link systems integration and networking support to its hardware offering is a classic example of the effectiveness of moving from products to solutions.
Our client work has highlighted the opportunity to move to higher, more integrated and more comprehensive levels of solution delivery by integrating the power of exploding digital data sources, predictive analytics and digital information interchange with customers. These solutions do not merely use big data to target customers or improve how companies promote existing products or services. Instead, they integrate data into the actual solution so the solution adapts and becomes more valuable as a customer uses it.
Data-integrating solutions are emerging because data has reached a tipping point, with 90 percent of it generated within only the last two years. The power of integrated solutions is all around us. Caradigm, a joint venture of GE Healthcare IT and Microsoft has begun providing data integrated solutions to help hospitals better coordinate patient care and fill in treatment gaps. Logistics companies such as UPS are incorporating traffic congestion data into route planning to improve package delivery times. Facility managers have begun using smart heating and cooling systems that adapt the use of resources to the environment, energy prices and demand.
Monsanto is an example of a company at the forefront of unleashing these new, data-integrating solutions. Over the course of less than a decade, it has moved from leadership in producing seed with improved yield characteristics to becoming a greater partner with farmers in improving field productivity. And at the same time, it has outperformed its industry peers by nearly five-fold. The shift from seed-product producer to field-solution provider has involved several steps, including the introduction of an agronomist force that helps farmers make better choices.
Recently, Monsanto has accelerated the solution shift by purchasing Climate Corp., a data source for weather and climate information and is integrating its information with soil and crop data, creating powerful new solutions that improve farm performance. Importantly, these solutions are not static. They learn and become more meaningful as weather and soil conditions change and as farmers experiment.
Data-integrating solutions are emerging because data has reached a tipping point, with 90 percent of it generated within only the last two years. Yet few companies have a plan to use these new sources of information and customer value effectively. To achieve gains that are truly transformative, B2B companies must learn to harness this data to build integrated solutions that elevate them above the role of the vendor. It requires harvesting the most relevant customer information available and offering insights that make them genuine business partners.
Pitfalls in the search for solutions
The rare B2B company is able to prosper through a steady flow of extremely innovative products and services, offerings that are so unique and protectable that competition cannot keep up. But most must use every tool possible to avoid becoming commoditized, to stay relevant as customer requirements change and to differentiate in more global and competitive markets.
And adding related products and services and providing expertise for broader solutions has certainly been effective in avoiding being treated as an ordinary supplier and more like a strategic partner, enabling interactions with higher-level decision-makers. These stronger, more solid relationships—at least theoretically—also decrease the risk of losing business to a competitor.
But creating a tangible and measurable return on the added investment continues to be a challenge. Many B2B companies find it difficult to charge for the extra investments or generate a premium through their core pricing. Customers begin to see such innovations as a “favor” for giving a supplier all the business, value-added service with benefits that are hard to rely on or quantify. When solutions don’t yield margin or a platform for meaningful growth, they don’t remain sustainable and wither without additional support. Companies may start a pilot project here or there, but the risk tolerance is low. If they can’t figure out a way to make it profitable rapidly, they shut it down.
The power of data-integrating solutions to create customer intimacy
Digital technologies are enabling B2B companies to get close to end customers quickly and cheaply, and these insights are providing tools that jump-start growth. Dunn & Bradstreet has joined forces with Salesforce Analytics Cloud to build a more valuable prospecting solution by making financial and firmographic data available to millions of salespeople, even via mobile device. Avery Dennison has found new ways to combine high-technology labels with data to improve end customer package line speeds. The label, packaging, data solution increases overall packaging productivity without giving up on-shelf impact.
At Prophet, we’ve become adept at finding new ways to help our clients leverage data integration to achieve growth. Here are four data-driven strategies that show plenty of promise. With this new data and fresh insights, the odds of success are better, and the stakes for failing to do so are higher:
Combine product, expert service with data Cisco has shifted its primary business away from just communications and networking/switching components to include systems integration, software, network design advice and monitoring. It’s enabled them to build and maintain powerful collaboration communities around key issues, such as productivity or call-center management. Landis + Gyr has moved beyond the sale of electrical meters to smart meters and provides data collection and analytics. It’s now working to improve the energy efficiency of the entire electrical grid, making it more resilient and robust.
Enhance your product with powerful data Halyard Health, formerly the Kimberly Clark Healthcare division, makes the gowns, masks and gloves that help control infections in hospital settings, a process that has come under intense scrutiny with the rise of such illnesses as MRSA and Ebola. In providing data on best practices, hygiene, and ER and OR efficiency, Halyard launched a service called AiRISTA, installing a simple tag at hand-washing facilities that tracks when and how frequently providers wash their hands. It helps ER personnel become more compliant with washing their hands, which in turn reduces infections and lowers hospitals’ re-admittance rates. In doing so, Halyard has moved from selling gloves and gowns to selling data powerful enough to significantly improve patient health and ultimately lower operating costs.
“The rare B2B company is able to prosper through a steady flow of extremely innovative products and services, offerings that are so unique and protectable that competition cannot keep up.”
Leverage data to go direct B2B companies can no longer sit on the sidelines and let others disintermediate their distributor relationships by appealing to their end customers. Channel conflict is an age-old issue, which expanding data access is rapidly making more complicated and more difficult to manage. Airlines such as United are no longer sitting and watching intermediaries (data collectors like Kayak) take control of the travel planning of large corporations with heavy travel needs. Others with historically restricted access to end customers, such as pharmaceutical companies, are providing data to build direct (if not actually transactional) relationships with physicians and sufferers around ways to improve overall patient health while keeping within regulatory restrictions.
Harness the power of data companies such as Citibank don’t just issue credit cards or use big data to improve campaign targeting. They are also organizing and finding insights based on their billions of transactions to use as a separate business to support their B2B clients. They are helping their B2B clients improve forecasting demand for products, adjust merchandising plans and modify staffing assignments based on improved access to high-quality data.
Make this search for solutions better than the last
Often, our clients tell us they’re not sure where to begin the search for the best ideas for integrated solutions. We’ve found three guidelines keep B2B companies on track:
- Get closer to your customers: Putting the customer—and your customer’s customers–at the center of your decision-making has never been more important. Understand deep needs and behaviors, and study what they do on the web. Push beyond traditional market research methods to collect and mine actual behavioral data on your customers. Augment everything you do with collecting data on web traffic. The best solutions come from a more nuanced understanding of customer behaviors based on data and traditional insights gathered from market research.
- Build, buy or partner: In many cases, the data and insight landscape is changing too fast for you to become an expert. You can choose to build, but it will require a multi-year investment with low NPVs in the short term. Explore partnerships and potential acquisitions. You can accelerate your knowledge more quickly by leveraging what others already know about how to effectively use data.
- Stay committed: Integrated solutions take time to get right. Be ready to fail fast, but don’t back down. Failures are to be expected, and even encouraged, because in regrouping, you’ll improve your organization’s agility.
Don’t let early failures stop you. If you give up, someone else might step in and disintermediate you. Once you create small successes, you will be inspired to create more solutions that will you can take your enterprise to the next level.