The supply chain is the engine of the global economy. When products don’t move smoothly and seamlessly between manufacturer and end-user, they become exponentially harder to bring to market. Too often, the supply chain’s importance is overlooked – as are the challenges inherent to forging good relationships between each ‘link’. The consequences of a single inefficiency in a single company can echo across the entire chain, leading to wasted time and lost revenue. In 2018, businesses can’t afford to fall behind the market, and they can’t afford not to maximize their operational efficiency.
The challenges of working in a complicated supply chain – one where manufacturers, distributors and wholesalers must collaborate harmoniously – are the focal point of sales-i’s 2018 report, where 233 business leaders and senior decision-makers shared their thoughts on the year ahead.
The following four sales obstacles were identified as the most persistent and the most troubling for B2B companies across the supply chain.
1. Customer retention and loyalty
It may be a bit simplistic to describe customer acquisition and retention as specific sales obstacles. Struggling with attracting and retaining new business is, in many respects, a fact of life rather than a challenge. Yet in the B2B sphere, these foundational principles take on extra significance. With longer sales cycles, fewer qualified opportunities, and more stakeholders, the basic work of enticing customers – and getting them to stick around – becomes markedly more complicated.
It should therefore come as no surprise that 59% of the supply chain organizations surveyed see winning and retaining new business as their biggest challenge for 2018 – and that 38% are struggling to up-sell and cross-sell to existing customers.
The solution is to take the initiative. While proactivity is necessary for winning new business, once a customer has been acquired, it’s easy to relax into a reactive slump: one where requests are fulfilled, but it seldom occurs to the salesperson to pre-empt a query or work to address the customer’s ongoing needs in advance.
Whether they relate to new business or existing business, opportunities are not Pokémon: they do not appear in the wild as the salesperson is idly minding their own business. To drive sales in the short and long-term, it’s necessary to use data-driven insights: gathering information about buying patterns, interpreting this information, and using the final analysis to anticipate customer needs.
Nobody ever lost a customer by doing too much for them.
2. Skills shortages
This is another issue that’s somewhat endemic to the B2B sphere – but just because companies are used to it doesn’t make it less frustrating. According to our survey, some 65% of businesses expect to make salespeople their top hires for 2018: a trend that suggests a dearth of talent or a surplus of unexploited opportunities. Either option is somewhat worrying for B2B companies: in niche industries, it can be equally difficult to find talent and leads.
So, when opportunities are found, it’s important that they’re pursued by salespeople at the top of their game. The problem isn’t necessarily the caliber of salespeople that these businesses have: it’s that they’re often bogged down with cumbersome processes and time-consuming admin work.
If B2B sales teams can use technology to streamline operationally necessary tasks that don’t require human involvement, salespeople will be empowered to do what they’re best at. What’s more, talented salespeople from other companies will be attracted to a company that will let them do what they do best.
3. Digital technology and e-commerce
That digital technology is important is not particularly surprising to anyone working at any stage across the supply chain. In 2018, however, it’s not just important: it’s all-important. Overall, 61% of those businesses surveyed consider automation and smart factories to be a boon to the industry – compared to 5% who see it as a threat. A few businesses may harbor some residual suspicion, but many more see clear advantages.
E-commerce, meanwhile, is often associated with B2C, but as time passes, its B2B applications are becoming more attractive: 70% of companies see it as an opportunity, and 18% see it as a potential hazard.
The skeptics are perhaps thinking of global online retail giants such as Amazon, whose ‘sell it cheaper and deliver it quicker’ ethos is increasing the competitive pressure on many other industries. But the majority see opportunities in digital sales channels and are actively working to capitalize on them. If a company is selling car parts or building supplies, it can do so through its own e-commerce portal or, indeed, by partnering with an organization such as Amazon.
4. Economic performance and commoditization of key markets
Finally, the largest and most nebulous challenge is perhaps the economy – an overwhelming 98% of respondents see it as critical to their performance.
Indeed, when the economy is under pressure and competition intensifies, key markets such as electronics and FMCG become more commoditized. Businesses tend to respond to these trends by racing to the bottom: discounting and discounting in the pursuit of quick wins that ultimately kill their margins. This is reflected in the survey results: some 65% see discounting as having a negative effect on the wider industry.
In 2018, businesses will need to do more to stand out. Slashing prices simply won’t cut it: the customers who want the cheapest option aren’t the customers who tend to hang around once the transaction is complete. Loyalty programmes, customized product packages, market-leading customer service – these are the things that will make a difference in the long run.
Many of the challenges outlined by this report are longstanding issues that continue to endure even as the market, technology, and business models fundamentally change. What this suggests is that companies along the supply chain can no longer resort to old tactics: they won’t work anymore (if they even worked in the first place).
Kevin McGirl is President of sales-i, a sales analytics software company.
