July 21, 2020 - 283 views|
Just as consumer goods manufacturers have made products more intelligent, B2B providers are using data and analytics to create a competitive edge.
Creating intelligent products has long been a staple of consumer technology providers. Think no further than the Apple Watch and iPhone. But the concept has been slower to take root in the B2B technology sector among makers of semiconductor parts, enterprise software, digital marketplaces and platforms, to name a few.
Now, two forces are uniting to make intelligent business products a priority. One is the recognition that, amid the dramatic shift to remote work in the pandemic, businesses need new ways to capture the voice of the corporate customer. The other is the growing realization among B2B technology providers that data from their products can drive competitive advantage.
By taking advantage of continuous data collection and AI-driven analytics, B2B technology providers can better anticipate customer needs and make proactive recommendations. The result is greater competitive differentiation in the enterprise marketplace.
Behind the Change in Attitude
While 2020 has served as the tipping point, technology companies have been laying the groundwork for embedding intelligence into B2B products and services for a while. More companies are migrating applications and data to the cloud, so gathering usage details is easier. With improved cloud security, including tighter encryption and data privacy controls, B2B customers are more willing to permit the collection of their company data, particularly when they experience a payoff in the form of improvements to the products and services they use regularly.
Equally influential is the growing consumerization of the B2B customer environment. As millennials emerge as business leaders, they expect a personalized customer experience (CX) in their business software that bears a closer resemblance to the tap-and-swipe convenience they’re accustomed to as consumers. Most don’t find it: Fewer than 30% of B2B customers say suppliers provide an excellent CX. Northwestern University found that while B2B business leaders identify CX as a priority, their organizations lack the feedback tools, metrics and processes to deliver a differentiated experience.
Intelligent products can help close the enterprise CX gap. For B2B system providers, embedding intelligence will require a few changes:
How Companies Are Getting It Done
We partnered with a cloud-based software company that sought to improve the CX of its enterprise application and, as a result, reduce customer churn. To better view the behavior of its installed base, it captured customers’ clicks and usage data. By using detailed trend analyses of the application, the support teams could spot under-used features and proactively educate customers through web prompts to ensure they understood the application’s full range of capabilities, generating a better CX. Data on declining usage also highlighted accounts potentially at risk for churn, enabling sales teams to proactively reach out with personalized offers such as additional training.
A storage device maker took a more iterative approach that eventually expanded its business pipeline. The company began by deploying algorithms in its high-end servers to collect utilization data its engineering team could use to identify and proactively manage bugs. Our team spotted the data’s potential to expand sales. We integrated the system utilization details with the company’s sales system so that when a hard drive reaches 90% capacity, for example, it alerts the sales team, which can then contact the customer about purchasing additional storage. The manufacturer’s business pipeline grew 20% as a result of the proactive cross-sell and upsell opportunities and end-of-life scenarios for platform upgrades.
Even more profitable for the manufacturer was the discovery that it could package the usage data into a new tier of value-added diagnostics and service reports that enterprise customers would pay more for. The premium service tier generated $100 million in new revenue.
Other B2B providers have found competitive advantage by using intelligence to tackle simpler use cases, such as gathering operational metrics. For example, a digital software security company found itself experiencing the downside of success when its application’s brisk sales were accompanied by usage outside of the terms of its subscriptions. Intelligent mapping of deployment patterns understand how its software was being used and identify non-compliant customers, resulting in higher renewal rates.
By creating more intelligent products and services, B2B providers can create the CX and proactive recommendations needed to give themselves and their customers a competitive edge.
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