There’s no doubt that the pandemic has permanently impacted daily life in every way. It’s also clear that corporate digital transformation is accelerating in every way. After all, in 2019, many enterprise sales calls absolutely had to be in person – now video calls are expected, and digital selling is becoming the norm. So while digital selling is advancing by leaps and bound, what about self-service and adaptive packaging and pricing? Are you taking the necessary steps to improve your customer experience and optimize your bottom line? Start by assessing your strengths with SBI’s Revenue Growth Maturity Model and see how you rank your organization’s pricing and packaging strategy.
First, let’s look at the forces that impact demand and focus on those that can be addressed with agile pricing and packaging in your digital strategy. For a full discussion of these forces, read the SBI brief by Chethan Sharma on top-line demand challenges.
- Suppression: Demand remains suppressed for a few months and bounces back.
- Surge: A sharp spike in demand that leads to true incremental short-term volume or volume that cannibalizes future demand.
- Loss: Demand is lost to other competitors who have more compelling offerings and meet customer needs better – easy transactions through a mobile app or more effective marketing in digital channels.
- Shift: Demand is not lost but shifted in terms of products purchased, channels used, or consumption patterns.
- Orphaned: Demand declines as customers switch brands for better pricing or more effective packages.
- Destruction: Demand is lost for good as customers stop buying completely.
On top of the rapid changes all businesses are experiencing, there is still significant uncertainty on the shape of the recovery. We’re not yet able to predict if the recovery will be a V, U, W, “square root,” “saw,” or “Swoosh.” The shape of the recovery will likely vary widely by industry, resulting in continued changes to demand drivers. Market leaders will be consistently evaluating these changes from a customer perspective and translating this into revised account potential. These insights can be used to dynamically allocate commercial resources and refresh pricing and packaging to create compelling offers. By aligning pricing & packaging to changes in demand drivers, market leaders can more closely align with their customers.
While the first five challenges above can be mitigated by more effective and agile pricing and packaging, challenges three, four, and five can have a lasting impact on the business and are most likely to show positive results from an inclusive digital strategy that addresses the customer journey and the buying experience.
SBI Research on Digital Commerce
SBI research indicates that digital commerce accelerated more in 2020 than in the preceding 10 years. Market leaders are focused on an agile digital Go-to-Market evolution that reduces friction in the customer journey. These pragmatic investments have a rapid impact on revenue. To help organizations navigate a successful digital evolution, we introduced the Digital Maturity Model. The maturity model is sequential, such that each level builds on the previous capability. Two easy areas to get started in improving digital maturity are the customer journey and the selling experience.
Outdated Buyer and Customer Experience – Buyers have more power than ever, and their preferences have changed more in the last 5 months than during the previous 5 years. This has made retention the new growth as market leaders go back to the installed base for growth. Market-leading software companies are focused on creating and documenting value to maximize logo and revenue retention. Value messaging also creates the possibility of cross-sell and up-sell as economic conditions improve. Market leaders are collaborating cross-functionally to improve pricing and packaging, customer marketing, and improving the Customer Experience. Customer Experience in a B2B context is defined as reducing friction throughout the buyer’s journey and being easy to buy from. While laggards are focused on incremental improvements to the Customer Journey, Market Leaders have taken a blank page approach to designing processes that provide a differentiated experience.
Digital First Software Sales – Software buying has been moving towards the “digital-first” direction for some time. As substantively all commercial activity became virtual, several CEOs indicated they have prioritized digital investments that address key points of friction in their customer journey. This includes additional digital content, the ability to demo on a self-serve basis, and in some cases, order and contract digitally. In our conversations, we are seeing that market leaders are taking actions to protect their customer base, which has created barriers to entry. This change means increased competition for every deal and more scrutiny on new logos, cross-sell, and renewals. Enabling teams to succeed in a more competitive environment will increase win rate.
Don’t leave pricing and packaging behind during your digital evolution. Take the opportunity to improve your customer journey, your selling experience, and your bottom line. To get started, we’ve made it easy to evaluate your maturity with this assessment. If you need some more ideas and support in digital transformation, SBI is here to help. Contact us and schedule a commitment-free consultation on digital sales and marketing or your revenue marketing strategy to deliver outsized growth.