How to Navigate the New Normal: Accelerate.
If you have been following along with our Anticipate, Adapt and Accelerate series, you have already been thinking about the keys to anticipating what the new normal will look like, and based on that, how to adapt your strategy for the new normal. If you have not been following along with us, I encourage you to read the previous articles in this series, as they lay the foundation for the next step, Accelerate.
Sun Tzu once wrote, “In the midst of chaos, there is also opportunity.” In many or most B2B markets, 2020 has been a year where much has been turned upside down, where chaos has reigned. Supply chains have been stressed or broken, demand and value shifts have occurred and may persist, and many of the assumptions with which B2B leaders came into 2020 need to be reconsidered. If you have thought through Anticipate and Adapt, you have already reexamined assumptions and are ready to Accelerate; to drive commercial excellence and capitalize on the opportunity presented.
There are five key questions B2B leaders must answer to quickly drive success from the work they have done to Anticipate and Adapt.
1. How do we align the ecosystem (competitors, channels, partners, digital) to our benefit?
Presumably, the ecosystem you play in has changed, if not transformed significantly, heading into the new normal. In what ways can your organization take advantage of this change? Are some of your competitors advantaged or disadvantaged in the new normal? Have the channels you use to go to market been disrupted? Have digital models taken over because of social distancing? Given these changes, how can you manage the ecosystem to your benefit?
A client of ours in the commercial vehicle industry has seen significant shifts in its ecosystem. New vehicle sales have collapsed, aftermarket parts and repairs have increased in importance, deliveries by commercial vehicles have shifted from long haul semi-trucks to last mile medium-duty trucks and vans, and dealers in the aftermarket have been forced to adopt remote, digital approaches for vehicle service wherever possible. Given this, our client has decided to drive its ecosystem by enabling dealers with technology to support the aftermarket parts business, with an eye towards taking advantage of this disrupted ecosystem to gain share.
2. How do we align our offering portfolio to the new normal?
As you examine your product or offering portfolio, have the value and benefits provided by each product/offering shifted? In the new normal, are some offerings more valuable to customers, while others less valuable? Do some offerings need to be altered or enhanced to meet changed customer needs? It will be important to examine your product portfolio and product management approach to optimize your set of products/offerings for customer expectations and needs going forward.
For example, in the office supplies space, suppliers have, or will have to, reevaluate their product portfolio management given the shift to flexible, work-on-the edge workstyles. Different types of equipment and supplies (e.g. smaller printers and copiers, home wi-fi enablers, etc.) will be needed compared to what was purchased by larger, centralized office complexes in the past. Further, as offices open, different, more flexible equipment will be needed to meet social distancing needs. Product management decisions will need to be updated.
3. How do we more effectively reach and sell value to customers?
This question encompasses 2 parts: 1) How do we more effectively reach customers? and 2) How to we more effectively sell value to customers? Considering the first part of the question, approaches to reach customers have and will shift. We have all become accustomed (perhaps begrudgingly) to video conferencing to reach customers as appropriate. Approaches to engage customers have changed and will remain changed going forward. But beyond that, which customers do we want to reach? In the new normal, which customers should be our priority targets, and which should be deemphasized? Given our adapted strategy, which new normal customer segments best align with our new normal value proposition? Which customer segments are in a strong position to spend on our products/offerings in the new normal?
The 2nd part of the question, how do we more effectively sell value to customers? forces you to consider what are the benefits that matter to your priority customer target segments in the new normal. You cannot assume that differentiating benefits from 2019 will still be differentiating benefits going forward. Value selling approaches will need to be aligned to the new normal. A new or altered value argument will need to be defined, articulated, and packaged to enable the sales team to sell successfully. As you reconsider the value argument, be sure to think through the entire customer chain. How might the needs of my customer’s customer change? For example, in the food ingredients industry, an ingredients supplier may notice that their customers, food producers, packers, and brand owners, are dealing with a demand shift among their customers. Food service is no longer a focus, while “center-aisle” grocery products are. Therefore, as an ingredients supplier, how can I articulate benefits and sell value based on helping my customer differentiate their products in the center aisle? Further, how can I differentiate my value argument to stress speed and efficiency in helping my customer meet this surge in demand for center-aisle products?
4. How do we capture more value from our offerings?
Given the disruption and dislocation in many B2B markets, previous assumptions about customers’ willingness to pay will need to be reconsidered. What may have been optimal prices set for your products/offerings in the past may no longer be optimal in the new normal. As customer expectations and needs change, their willingness to pay for certain benefits will change. As you have evaluated your portfolio of products/offerings and examined the differentiating benefits you are providing customers, optimizing price to maximize value capture is an important next step.
5. What people, processes, and tools need to be put in place to support acceleration?
Given your answers to all the questions above, what organizational changes are required to ensure successful acceleration? For example, in a changed ecosystem, do you need different or new channel programs or partnerships to align incentives in the new normal? Given decisions made regarding product strategy in the new normal, do you need to change your product management and/or new product development processes to get new or refined offerings to market more quickly, beating your competitors to the punch? Is your sales organization equipped to sell value in the new normal, and if not, are different roles, approaches, skills, and/or tools required to do so? Are upgraded digital tools and processes needed to engage customers in the new normal? Do eCommerce capabilities need to be upgraded given how customers expect to buy going forward? When evaluating value capture and pricing, do pricing management and processes need to be revised to ensure a new pricing strategy will be adhered to? Do updated processes and tools need to be developed to drive enhanced agility to respond to the new normal?
Thus far, 2020 has been a very challenging year for many B2B companies. It has created significant disruption and dislocation in many markets and left many players in those markets disoriented and shell-shocked. But eventually, players in these markets will shake off the cobwebs and begin moving forward with clarity. For a B2B executive, this is an opportunity to take the initiative and get ahead of competitors. With clarity, anticipating and adapting for the new normal will set the guidelines for acceleration. Accelerating will ensure you put commercial excellence initiatives in place to go on the offensive and get your competitors on the run. Waiting patiently at this point will allow your competitors to get the jump on you, and you may never recover. Ending with another profound Sun Tzu quote, “Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”
This article is a continuation of our thoughts on the impact of the COVID-19 pandemic and the key strategic decisions B2B companies should be focusing on. You can find our other articles here:
How to Navigate the New Normal: Adapt.
How to Navigate the New Normal: Anticipate.
Where Do We Go From Here? Anticipate. Adapt. Accelerate.
Where Do We Go From Here? Get Ahead of the “New Normal”
Where Do We Go From Here? Go Where Your Customers Are: Online
Where Do We Go From Here? Prepare for the Next Wave of COVID-19 Disruption
Where Do We Go From Here? Protecting and Growing Revenue in the Short Term
Where Do We Go From Here? Preparing to Capture Demand
Where Do We Go From Here? What We Are Hearing…