Digital Transformation and the Customer Experience

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DIGITAL TRANSFORMATION AND THE CUSTOMER EXPERIENCE A look at how leading B2B companies are generating ROI by embracing digital transformation with a customer-first mindset

THE 2019 FPX DIGITAL TRANSFORMATION STUDY DIGITAL TRANSFORMATION AND THE CUSTOMER EXPERIENCE

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INTRODUCTION

While digital transformation may have originated as a process for improving internal technologies and efficiencies, today it’s all about the customer experience. Businesses that invest in customerfacing technology improvements early and often stand to gain the most as e-commerce revolutionizes the B2B space. In the early days of digital transformation, B2B companies focused on technologies designed to increase productivity and simplify internal processes such as ERP systems, automated payroll systems, basic HR platforms and more. Soon after, businesses began to view digital transformation as a way to sync information with buyers, and digitally replicate buying processes previously completed by phone or fax. However, these updates did little to change a business’s actual relationship with buyers. Instead, they simply digitized manual work (e.g., pen and paper documentation) for sellers. The first phases of digital transformation essentially allowed businesses to do more with fewer people. At the time, this was groundbreaking. Now, it’s a given. Businesses that remain in the early phases are not undergoing true digital transformation as we know it. But what exactly does digital transformation mean today? Today, digital transformation means innovating the selling process to better address the needs of empowered buyers through investments in modern customer-facing technologies. The following report, based on a survey of 229 B2B decision makers, shows that businesses plan to spend most of their technology budgets on customer-facing tools, and they believe these technologies hold the potential for the most ROI. The survey respondents represented a wide range of industries: manufacturing, automotive, financial services, energy and utilities, health care and telecommunications. About half of the respondents identify their businesses as primarily manufacturing.

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METHODOLOGY FPX surveyed 229 B2B decision makers in October of 2018. To reach this audience, FPX worked with Lucid, a survey sample provider with access to more than 250 sample suppliers. The industry, job title and company revenue of the respondents is as follows:

IN WHICH INDUSTRY DOES YOUR COMPANY PRIMARILY OPERATE? 3% Automotive 8% Financial services

WHAT IS YOUR COMPANY’S APPROXIMATE REVENUE?

20% $101 - $250 million

19% $251 - $500 million

28% $501 million $1 billion

34% More than $1 billion

47% Manufacturing 2% Energy and utilities 9% Healthcare

WHICH OF THE FOLLOWING BEST DESCRIBES YOUR JOB TITLE?

1% Aerospace 14% C-suite 3% Communications 18% All of the above

4% President or VP 26% Director 56% Manager

9% Other

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NO TIME TO WASTE Businesses that have yet to embark on a digital transformation project are in the minority.

68% say their businesses are currently undergoing a digital transformation process.

More than two-thirds (68 percent) of the survey respondents say their businesses are currently undergoing a digital transformation process. Of the businesses that aren’t undergoing digital transformation, a quarter (25 percent) say they’re delaying digital investments because they don’t see a problem with the status quo. This thought process is problematic, and in some cases can serve as a

25% are delaying digital investments because they don’t see a problem with the status quo.

death sentence for B2B businesses. If the next wave of B2B digital transformation will be anything like that of its B2C counterpart, an industrywide push toward customer-first digital offerings will happen fast. Companies that remain complacent and fail to invest in modern technologies designed to improve the B2B buyer experience will quickly fall

IS YOUR COMPANY CURRENTLY WORKING ON A DIGITAL TRANSFORMATION PROJECT?

behind competitors and face a major uphill battle to catch up.

“It may feel like a safe bet to stick to the status quo, especially given how difficult it can be for businesses to enact major change. But, digital transformation is hitting B2B as we speak, and those that haven’t made moves will feel the consequences”

68% Yes

32% No

Mark Bartlett, Chief Experience Officer, FPX

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DIGITAL TRANSFORMATION DEFINED B2B businesses largely undergo digital transformation projects with the goal of improving the customer experience. Most respondents say that their companies agree internally that this is the best use of digital transformation funds. As B2B e-commerce becomes the norm, clunky, outdated systems that hinder the buying experience will no longer cut it. Today’s business buyers expect seamless buying processes, much like they experience in the consumer world.

94% agree that buyers want the ability to research products and receive quotes without ever speaking to a sales representative.

Nearly all respondents (94 percent) agree or strongly agree that buyers want the ability to research products and receive quotes without ever speaking to a sales representative. Given customer demands for better buying processes, the survey data shows that B2B businesses are shifting their digital transformation focus toward improving the

“BUYERS TODAY WANT THE ABILITY TO RESEARCH PRODUCTS AND RECEIVE QUOTES”

customer experience. Of those currently undergoing a digital transformation project, 58 percent say one of the

51% Strongly Agree

goals of their company’s digital transformation project is to offer a better buying experience for customers. This number jumps to 63 percent among respondents

43% Agree

from the manufacturing industry -- an industry that typically sells complex, customizable products, yet has

6% Disagree

historically relied on inefficient buying processes. 1% Strongly Disagree

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Nearly all respondents (95 percent) agree or strongly

Not only do respondents say they believe customer-first

agree that digital transformation funds are best spent

investments are most important, but they also say their

on improving the buyer experience, and a similar

businesses generally agree on this concept internally.

percentage of respondents (98 percent) agree or

Most respondents (85 percent) believe they have a

strongly agree that the best way to drive more sales

strong internal consensus on what digital transformation

is to enhance the buyer experience. Business leaders

means, indicating that internal stakeholders (regardless

who still believe that internal process improvements

of role) largely agree that digital transformation projects

are more important than the customer experience

should focus on the customer.

represent a slight majority, and are at risk of losing sales to competitors with customer-first mindsets.

WHAT IS THE GOAL OF YOUR DIGITAL TRANSFORMATION PROJECT?

agree that digital transformation funds are best spent on improving the buyer experience,

To improve internal processes with the goal of operating more efficiently

36%

44%

To offer a better buying experience for customers with the goal of increasing sales

12%

17%

Both of the above

38% Manufacturing

Non-manufacturing

95%

51%

25% agree that the best way to drive more sales is to enhance the buyer experience.

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Such initiatives require looking at both what customers are asking for and how a business addresses thoSe needs internally by adapting process, culture and technology. There’s no question that digital transformation today

“DIGITAL TRANSFORMATION FUNDS ARE BEST SPENT ON IMPROVING THE BUYER EXPERIENCE”

is about improving experiences for the end customer to ultimately drive more sales. The most successful B2B businesses will use digital transformation to get customers to spend more than they would otherwise, and reposition themselves as more than just sellers, but rather, true solution providers for customers.

37% Strongly Agree

58% Agree

5% Disagree

1% Strongly Disagree

“THE BEST WAY TO DRIVE MORE SALES IS TO IMPROVE THE BUYER EXPERIENCE.”

“At the end of the day, keeping your customers happy is what will maximize revenue for your business. Don’t just invest in any new technology, invest in the tools that will make your customers’ lives easier.” Mark Bartlett Chief Experience Officer, FPX

54% Strongly Agree

44% Agree

1% Disagree

1% Strongly Disagree

“OUR COMPANY HAS A CLEAR INTERNAL CONCENSUS OF WHAT DIGITAL TRANSFORMATION MEANS.”

34% Strongly Agree

DIGITAL TRANSFORMATION AND THE CUSTOMER EXPERIENCE

51% Agree

12% Disagree

3% Strongly Disagree

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FOLLOW THE MONEY According to the survey, businesses understand the importance of customer-centric tools and are investing accordingly. The best way to truly overhaul the buyer experience

technologies like intranet portals and collaboration

is to invest in modern customer-facing technology,

tools. But when asked about the type of technology

including advanced e-commerce platforms, guided

they plan to spend more money on in the future,

selling technology, quote-to-order tools and more.

respondents ranked customer-facing technologies higher than internal efficiency tools.

Survey respondents overwhelmingly indicated that they have already invested in and use many internal

WHICH OF THE FOLLOWING TECHNOLOGIES DOES YOUR COMPANY CURRENTLY HAVE? 68% 60%

65% 59%

55% 49% 40% 39% 34%

37%

59%

36%

36%

Sales Portal

E-commerce Instant Quote

CPQ

Billing Mgmt.

Pricing Optimization

DIGITAL TRANSFORMATION AND THE CUSTOMER EXPERIENCE

37%

35% 25%

25%

Intranet Portal

51%

47%

IoT

21% 21%

AR/VR

24%

Internal Guided Collaboration Selling

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WHICH OF THE FOLLOWING TECHNOLOGIES DOES YOUR COMPANY PLAN TO INVEST IN WITHIN THE NEXT YEAR?

32%

38% 34%

39%

38% 28%

30%

22%

Intranet Portal

33%

31% 32%

32% 32%

37% 28%

20%

Sales Portal

E-commerce Instant Quote

CPQ

34% 24% 25% 19%

Billing Mgmt.

Pricing Optimization

IoT

AR/VR

Manufacturing

28% 24%

Internal Guided Collaboration Selling

Non-Manufacturing

Respondents also ranked customer-facing technologies

When broken down by job role, customer facing

higher than internal efficiency tools when it comes to

technologies ranked high across the board with

return on investment. For manufacturers, technologies

some slight variations throughout. Both external-facing

designed to improve the customer experience filled

and internal-only employees feel strongly that customer

the top four spots, while internal collaboration tools

experience technologies hold the most potential

ranked last.

for ROI.

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RANK THE FOLLOWING DIGITAL CAPABILITIES BASED ON HOW MUCH ROI YOU THINK EACH WOULD GENERATE MANUFACTURING

NON-MANUFACTURING

EXTERNAL-FACING ROLE INTERNAL-ONLY ROLE

1

External customer sales portal

External customer sales portal

External customer sales portal

Advanced e-commerce site with customization options

2

Advanced e-commerce site with customization options

Advanced e-commerce site with customization options

Instant quote technology

External customer sales portal

3

Instant quote technology

Intranet portal

Advanced e-commerce site with customization options

Instant quote technology

4

CPQ technology

Instant quote technology

Intranet portal

Intranet portal

5

Intranet portal

CPQ technology

CPQ technology

CPQ technology

6

Pricing optimization

Billing and subscription management

Pricing optimization

Billing and subscription management

7

Billing and subscription management

Pricing optimization

Billing and subscription management

Pricing optimization

8

IoT capabilities

IoT capabilities

Guided selling technology

IoT capabilities

9

Guided selling technology

Augmented/virtual reality

IoT capabilities

Augmented/virtual reality

10 Augmented/virtual reality

Internal collaboration tools

Augmented/virtual reality

Guided selling technology

11 Internal collaboration tools

Guided selling technology

Internal collaboration tools

Internal collaboration tools

Investments in customer-facing technologies that improve the buyer experience are particularly crucial for manufacturers that sell complex products, such as automotive or aerospace parts. It’s not easy to simply sell a fleet of bulldozers to a buyer with the click of a button. Businesses need advanced technologies that enable complex ordering processes to truly reap the benefits of customer-centric digital transformation projects.

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QUOTE-TO-ORDER TIME MATTERS One of the best ways to enhance the B2B buyer journey is to offer faster quote-to-order times. B2B purchases are much more complex than those in

expectations bleed into the B2B space, five days can

the consumer-facing space, often involving lengthy and

feel like a lifetime for a buyer.

complicated quote processes. However, customers have high expectations for fast ordering capabilities — even for complex purchases.

Regardless of the speed of the current quote-to-order offerings, 94 percent of respondents agree or strongly agree that a faster quote-to-order process will help

Despite growing customer expectations for seamless

drive more sales. Similarly, 93 percent agree or strongly

buying processes in B2B, most businesses say their

agree that empowering distributors to configure and

quote-to-order process is slow-moving. Roughly half

quote products for buyers without calling someone

of respondents (53 percent) say their quote-to-order

at the company would help their company drive

process is more than five days. As consumer shopping

more revenue.

WHAT IS THE LENGTH OF YOUR AVERAGE QUOTE-TO-ORDER PROCESS?

13%

35%

53%

Less than a day

1-4 days

More than 5 days

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Quote-to-order improvements should be a priority for B2B businesses, especially those selling complex products. When customers request an initial quote, it’s often the first interaction they have with a company. If the time it takes for a seller to respond with a quote

“A FASTER AND MORE ACCURATE QUOTE-TO-ORDER PROCESS WOULD HELP ME DRIVE MORE SALES.”

is too long for a customer, he or she can and will take their business elsewhere. 47% Strongly Agree

Configure-price-quote (CPQ) technology can help businesses speed up the time it takes to respond with accurate quotes. These solutions empower all

47% Agree

selling channels to close deals quickly, automate the quote-to-order process, make product and pricing

5% Disagree

updates on the fly, and provide a seamless user experience from any device. CPQ technology is an easy first investment for businesses looking to

1% Strongly Disagree

make a quick impression on buyers.

“One of the biggest frustrations B2B buyers face today is the inability to receive a fast and accurate price quote online. CPQ technology is one of the best tools a B2B business looking to improve the customer experience can invest in.”

“EMPOWERING MY DISTRIBUTORS TO CONFIGURE AND QUOTE PRODUCTS FOR MY BUYERS WITHOUT CALLING SOMEONE AT MY COMPANY WOULD HELP DRIVE MORE REVENUE.”

Mark Bartlett, Chief Experience Officer, FPX

44% Strongly Agree

50% Agree

7% Disagree

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ADAPTING YOUR BUSINESS CULTURE While digital transformation relies heavily on technology, a successful transformation must include more than just a technology overhaul. Digital transformation requires both technology and

a digital transformation project without understanding

an emphasis on adapting your business culture and

the voice of the customer first. To succeed, businesses

processes to meet the needs of the customer.

need to adapt process and culture to focus on the

In other words, your customers will tell you when they’re ready for digital transformation initiatives. So

customer, while adding the technologies necessary to facilitate these shifts across the organization.

as a business decision maker, don’t dive head first into

“While technology investments are the heart of any digital transformation initiative, your internal culture also plays a major role. The ability to adapt to new technology along with evolving customer needs internally can make your digital transformation projects even more successful” Mark Bartlett Chief Experience Officer, FPX

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CONCLUSION

If done right, digital transformation has the potential to radically transform a business’s value proposition. B2B businesses that choose to prioritize technology investments that truly enhance the buying process stand to gain the most in an industry that’s on the brink of an e-commerce revolution. Investments in advanced e-commerce offerings top the list among leading B2B businesses. But no two businesses are alike when it comes to the buying process. For B2B businesses in the manufacturing industry in particular, the buying process can be incredibly complex, and standard e-commerce implementations won’t cut it. That’s where CPQ can make all the difference. The quote-to-order process is often the first chance a business has to impress a buyer, and if that process is clunky, slow and confusing, buyers will take their business elsewhere. CPQ solutions can drastically improve quote-to-order times, and offer buyers accurate quotes for even the most complex configured products. As leading B2B businesses embrace customer-first digital transformation, there’s no time to waste for those businesses that haven’t put a comprehensive digital transformation plan into motion.

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ABOUT FPX

FPX helps some of the world’s leading and most innovative organizations realize their full business potential. Its Configure-PriceQuote (CPQ) application gives businesses the resources to deliver a better B2B buying and selling experience across direct, indirect and e-commerce channels. Powerful enough to handle any level of complexity, nimble enough to advance your commerce strategy, and simple enough to seamlessly extend and enhance the capabilities of direct and indirect sales, FPX CPQ is integral to facilitating a successful B2B Digital Transformation for Fortune 500 companies including Honeywell and Dover Corporation. For more information, visit fpx.com

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