Sebastian Decker: The digitalization of distribution in SMEs
Sebastian Decker: SMEs are the engine of the German economy. Companies in this category now employ over 30 million people and in 2018 generated 35.3 percent of the total turnover of companies in Germany. Through the use and expansion of innovative technologies and thanks to progressive digitalization, production processes in medium-sized companies have been continuously improved and optimized in recent years. But does this also apply to other departments, such as sales?
How can medium-sized companies digitalize their sales and profit from this?
We have discussed this with Dr. Sebastian Decker. As a trainer of the Google Future Workshop, he has been training medium-sized companies for years to use digital technologies and online marketing to win customers and support their sales. With his company Marketing for Winners he develops digital strategies for corporations and implements them with them.
Sebastian Decker is convinced that medium-sized companies waste 90 percent of their existing resources in sales.
In his lectures, the expert invites his audience on a time travel into the future of sales and advertising. The digital world has developed rapidly and offers many chances and opportunities for medium-sized companies as well. But how can medium-sized companies digitalize their sales processes in order to optimally support sales staff while ensuring customer satisfaction? We asked Sebastian:
How do you think medium-sized companies are doing?
In my opinion, medium-sized companies are still doing well. Although the Corona pandemic has hit many companies hard, this crisis was perhaps the necessary warning signal that has awakened companies again. After all, in the past, small and medium-sized businesses have often rested on their success.
Medium-sized companies have done a great deal right. They are innovative and offer a variety of high-quality products. In many companies, production has been greatly optimised and perfected, but sales and marketing work has hardly changed in the last 30 years.
How digital is the medium-sized business?
In the area of production, the companies here have made massive upgrades over the last ten years. However, other departments have not been affected by digitalisation. I am particularly worried about the sales department, because a lot of resources are lost that way!
While in production all available data is used to find out whether certain production parameters, such as pressure and temperature, could still be adjusted by 2 percent so that output can be further optimized, almost nothing has changed in sales.
What digitalization deficits do you see in sales?
In the majority of medium-sized companies, sales still proceed as follows: There are sales and field staff who either contact their existing customers to place products or who try to win new customers at trade fairs or by cold calling. From time to time, they may advertise in a magazine or newspaper for new products or vacancies or rely on recommendations from existing customers.
However, very few companies question whether these advertising measures are really profitable and even reach the right target group. Highly qualified sales staff are thus completely ineffectively and inefficiently deployed and spend the majority of their working time on tasks for which they are clearly overqualified. This includes, for example, checking offers, repeatedly answering the same questions or driving to the next customer in the car.
I myself have worked in the sales department of a chemical company and have seen how ineffectively top-qualified employees with doctorates are deployed.
What can a company do to digitalize its sales?
I see three steps here how companies can support sales with digital processes:
1. Away from cold and towards warm acquisition
Today, online marketing offers the opportunity to reach people exactly when they need a product or service. Thanks to targeted advertisements, I can draw attention to myself exactly when a potential customer needs me and my company. A company should not use its sales staff for cold calling, because from 10, 50 or 100 contact points often only a few lead to a real order.
The better solution would be for a company to present its products and services online and invite prospective customers to make an appointment with a salesperson, for example. Information material could also be made available for download on the company’s website, which can be downloaded after providing contact details. A sales representative can then contact the customer and build a lasting relationship.
2. Outsource implementation information online
In my own experience in sales at a large chemical company, I and my colleagues spend most of their working hours doing paperwork or travelling. However, the travel time could not be used effectively, and so neither could our manpower. It happened again and again that we had to explain and present our technologies and products to potential customers in the same way over and over again.
These general questions, which experience has shown to be asked time and again, could be answered for customers before the first meeting or conversation. On the company’s own website, an online seminar could be offered to impart knowledge and present the company’s products or services. Afterwards, all open questions can be answered personally in a one-on-one appointment.
3. Digitalize processes – away from the Excel spreadsheet
What I also experience time and again in companies is that the customer file is based on an Excel spreadsheet or a poorly maintained CRM system. As a result, many customer contacts are lost or not followed up in the right place. Quotations are also still created manually. This process is not only time-consuming, but also error-prone. Through digitalized maintenance of customer data, a customer contact can be called up with just a few clicks and a quotation or invoice can be created. This means that sales staff only have to spend a little time creating the necessary paperwork.
How will artificial intelligence and algorithms change online advertising in the future?
AI and algorithms are already used for online advertising today. The big internet companies Google, Facebook, LinkedIn, etc. have been collecting huge amounts of data for decades. Through our movement patterns, our search and surfing behavior on the Internet, our likes or comments, the platforms can now predict very well which products we are interested in and which we might want to buy in the future. And companies can easily access this entire data pool and place targeted advertisements! All that remains is to write the appropriate advertising text and, if necessary, create a graphic or picture material.
In the future, however, algorithms will do even more things in the advertising world for us. Online advertising will work like autonomous driving: We indicate on an advertising platform which products we want to sell and the platform then takes over the complete “timetable” for us, that is:
- it creates our advertising media
- writes our texts, etc.
Already today algorithms can create advertising banners or even write complex texts, novels or poems. So it is easy to write the ideal advertising text based on the data available online for a product, which is relevant for the user.
So let’s imagine, and this is unfortunately a somewhat prejudiced example, that a man searches on Google for the term “buy Range Rover SUV”. For him, it would probably be relevant how much horsepower and engine power the car has. But if a woman searches for the same term, other information such as safety or the colour of the car would probably be relevant for her. This example shows how different advertising messages can be relevant and interesting for different people. And machines can easily understand and track this much better than we humans, using the data available.
“Our task in the future will be simply to set the goal and strategy of online advertising. The rest will be done by algorithms and artificial intelligence.”
To what extent do legal restrictions such as the basic data protection regulation stop companies from successfully marketing themselves online?
Basically, the basic data protection regulation has not slowed down online marketing, but rather increased fear in companies. I experience time and again that companies do not use highly efficient marketing measures out of sheer ignorance because the fear of a warning is too great. In 99 percent of cases, companies do not exploit huge potential because the fear of the unknown is stronger. Although the basic data protection regulation was a major change, it is not an obstacle that prevents successful online marketing. There are always legal solutions.
What do you think about offline marketing measures such as newspaper ads or trade fairs?
I have rarely seen anyone prove to me that marketing measures such as newspaper advertisements or trade fairs are more profitable than online marketing measures. The advantage of online advertising is also its easy measurability: I can track exactly how much advertising budget I used to generate a certain number of contact requests, for example.
To really understand which measures are more effective, you would have to make an exact comparison. But I think it is very unlikely that a trade fair in which I have invested € 50,000 or € 100,000 or even more is cheaper per customer inquiry than an online measure.
However, you also have to consider the additional benefit of offline marketing. At a trade fair, for example, it is possible for me to get to know new suppliers or acquire a new future employee. This is rather unlikely with online measures, with which I only advertise my product.
Finally, what are the 3 steps that a company should take in the future?
- Companies should start by selling something on their own website. This does not necessarily have to be a whole product line, for example a consultation appointment is enough. That way, first experiences can be gathered.
- As a second step I would recommend testing one or two online marketing channels. For example, you could place ads on Google or Facebook to generate more experience.
- You should also question the current sales and acquisition processes as if they were a production machine. What are the recurring tasks? Where are there unnecessary vacancies for employees (for example, due to long car trips)? As with machines, optimization through digitalization is certainly possible.
- As a fourth and additional step for questions about online marketing, book Sebastian Decker as trainer or speaker: sebastian-decker@premium-speakers.com