The real voyage of discovery consists not in seeking new landscapes, but in seeing with new eyes.

—Marcel Proust

When considering a digital sales strategy, ask yourself, WWTD—What Would Taylor Do? Country-pop crossover star Taylor Swift understands the power of digital technologies like no one else. She’s a social-media rock star as much as a musical one. She has 70 million Twitter followers, 64 million on Instagram, and 74 million Facebook page likes. Swift understands, intuitively it seems, the power of digital.

Her grasp of social media may not be so surprising; what catapults her above pretty much all her peers is her grasp of digital platforms for music sales. She made a very public decision to pull her 2015 album, 1989, from Apple Music when she disagreed with the company’s policy of not paying royalties during the three-month free-trial period for new subscribers. The result? 1989 sold more copies in its opening week than any album in the previous 12 years. On top of that, Swift made $173 million from her 1989 tour in just six months. It’s a useful reminder that for all her digital prowess, the offline product still has to deliver.¹

It may sound far-fetched, but the same omnichannel tactics that have made Swift a global brand also apply to both consumer and B2B sales. By 2017, almost two-thirds of all US retail sales will involve some form of online research, consideration, or purchase. Successful brands don’t just “do digital”; they use the full arsenal of digital channels to engage and hook their customers at every step of their decision journey.

The story of a global supplier of commercial and outdoor lighting products is illuminating. Like many B2B companies, it had developed an online channel to support both its direct sales force and a network of channel partners. But customers were demanding better online pictures, product specifications, design tools, and ideas.

These requests were a signal to sales leaders that they were only scratching the digital surface. They committed to a thorough rethink of online channels and created a team that included the heads of sales from the United States and China, the chief marketing officer, and a newly hired chief digital officer to lead the work. The team’s task was to research how customer behavior was changing online and offline, and how the company could adapt its go-to-market approach accordingly.

The team started by interviewing 40 customers and prospects. It quickly became clear that contractors and designers were sharing ideas and advice online about what products to buy and how to use them. They were chatting on trade-association websites, following industry blogs, connecting on social networks such as LinkedIn, and posting pictures of installations and inviting commentary from their peers. The team saw that some of the company’s competitors were tapping into these online communities by creating their own sites to offer ideas, tools, and technical content. Still, industry sites were little more than online catalogs. There was a big opportunity out there.

To reset the digital strategy and make sure its brand was well represented in any online consideration of lighting products, the team started with a deep dive into the data. It gathered search data from Google and information about its consumers’ online behavior from panels such as Compete and comScore, and assessed the company’s own website traffic. The team also reviewed the history of thousands of online leads to see how effectively the direct sales force and distributors captured them. This data-gathering task involved tracking new metrics, such as search keywords, clickstreams and cross-clicking patterns, bounce rate, abandonment rate, and conversion rate. In total, this new data amounted to ten times the size of the offline sales database and required a specialist statistician to analyze it.

That analysis revealed that the vast majority of buyers carried out extensive research online before contacting a distributor or a manufacturer, and spent more time on community and social sites than on manufacturer or distributor sites (for the most part, only repeat customers came directly to the company website). Once on the site, most visitors checked specifications based on an item’s catalog number. They were using the site to get more information after talking to a distributor or salesperson, rather than for shopping. Meanwhile, potential buyers who were unaware of the company were being lured to competitors via online discussions elsewhere.

The sales leaders decided to use the company’s website to nurture leads and to direct customers to distributors for sales. They also decided to design and host distributor transaction sites for online ordering. This minimized distributors’ investments and allayed their fears of cannibalization. Crucially, it allowed the company to control the customer’s buying experience. The sales executives invested in content to inspire customers and help designers find, create, and compare ideas. They also wanted to connect their customers to one another, and encouraged them to post projects and share opinions to create conversations.

The result was that in two years, the new approach had boosted sales by 15 percent, yielding a fivefold rate of return on the investment in online capabilities. The company went on to double its online repeat-purchase rate and raise its online conversion rate by 50 percent. Digital channels also helped manage the cost of sales. The website saved considerable sales-rep time by providing tools for customers to assess different options themselves and weigh the trade-offs in, for example, cost and energy efficiency. That time was then spent effectively, thanks to the leads generated online. It also enabled the company to shift its product mix toward more profitable lines.

Two decades after the Internet began to revolutionize how books, music, films, and personal computers were sold, digital sales channels are increasingly critical for selling in almost every industry (Figure 5.1). Digital retail sales as a share of total retail sales in the United States is at about 7 percent in 2015 and has been growing by about 15 percent annually over the past five years. Meanwhile, the value of those sales is predicted to grow at 9.5 percent year on year. More striking is mobile commerce. While the total value of goods and services purchased via mobile in the US in 2013 was $113 billion—a relatively small slice of the retail sales pie—the figure is expected to grow by 25 percent a year through 2017.²

As the previous example shows, this is far from being just a B2C phenomenon. There is a constant need for both B2C and B2B sellers to connect digitally with customers and prospects. The sales executives we spoke to continue to invest in digital to boost growth, improve the customer sales experience, and lower the cost of sales. From these leaders, we have learned three precepts of digital success:

1. Optimize fanatically and often. They rework their sales strategy and operations to maximize sales ROI across digital platforms (their own and those of channel partners). They test and adjust their programs in a nonstop effort to build brand loyalty and turn clicks into sales.
2. Get mobile to drive growth. They have a clear grasp of how mobile is shaping customers’ decision journeys, and they use mobile to extend their relationship with customers to build value.
3. Integrate digital in a great omnichannel experience. They understand at the most granular level how to use digital to create a seamless customer experience, guiding buyers through a series of online and offline contacts, from marketing to presale to purchase and post-purchase service across physical and digital channels.

Optimize Fanatically and Often

The leading sales executives we interviewed have become resourceful risk takers and obsessive optimizers of digital channels. They continually improve the performance of their websites and those of their channel partners, and they rapidly incorporate platforms such as smartphones, tablets, social media, and smartwatches. Using a variety of techniques to measure performance (Figure 5.2), these sales executives focus on three core elements to optimize online sales: driving traffic to their sales platforms (engaging buyers, bringing more visitors directly), making online transactions easy and convenient (raising conversion rates, taking a larger share of wallet, facilitating checkout), and using the online connection with buyers to cross-sell, upsell, and retain customers (bringing buyers back, encouraging loyalty, etc.).

In essence, these three elements are not so different from offline sales. But the best digital sellers are relentless in testing alternative configurations to maximize visitor numbers, transactions, and revenue—and do so far more quickly than they ever would offline.

Amazon, for example, employs a large team of PhDs who constantly analyze the layout of the Amazon.com site and use advanced testing techniques to evaluate multiple versions of it at any given time to find which permutations generate the most sales.

That methodical approach is what it takes to get prospects to visit your website or download your app. Top sellers use both online and offline channels to drive traffic to their online stores, and they run frequent, targeted promotions to keep customers coming back. B2B companies often build loyalty with buyers by offering configuration tools and self-service options that make it easy to do simple things like order spare parts or amend orders. Companies that can’t build that kind of rigor into the digital sales programs founder.

A leading multibillion-dollar global e-commerce site was suffering anemic revenue growth and coming under increasing pressure from other online players. To reverse the trend, it focused initially on improving its loyalty program, but the leadership quickly realized that wouldn’t be enough to turn it into a digital selling powerhouse. So they committed to a full end-to-end digital transformation. The company built the foundations for richer customer insights, including a new customer database and segmentation models to drive personalization. It analyzed and assessed the size of the opportunity across all of its digital marketing and sales channels, such as the website, e-mail, search, mobile, and social. And it built out small teams that could move quickly. Within just six months of rolling out the new digital engine, the company had launched more than 100 new campaigns using a rapid test-and-learn pilot approach. By the 18-month mark, the company had captured more than $800 million in additional sales.

One area requiring constant scrutiny and optimization is the online content that engages customers during their decision journey. Apparel retailers, for example, have moved from static images of individual items to videos of models demonstrating complete ensembles. In 2015, clothes retailer Topshop launched real-time billboards displaying user-generated tweets to drive sales during London Fashion Week. Six outdoor screens featured styles and trends talked about on Twitter with the equivalent Topshop product shown alongside. The screens, located in pedestrian areas, were all within a ten-minute walk of a Topshop store.

Luring customers with great content is important but ultimately meaningless if you can’t hook them. There are two reasons why customers break off their buying progress: the item is hard to find, or the checkout process is difficult. Leading sales organizations ruthlessly remove anything that stands between the customer and the checkout. In B2C and B2B alike, the trick is to offer customers a simple way to buy (one click to renew maintenance contracts is a good B2B example). This does, of course, require efficient IT and supply-chain processes to ensure that products and services are available.

Best-in-class B2B companies are also optimizing the buying experience on their sites. One electronics company has built online tools that let customers compile customized orders and get the correct pricing online, without needing to call a rep or the sales-support department. The system also allows them to optimize the price by changing variables such as configuration and batching. Once orders have been placed, customers can change specifications as often as they like, and they immediately see the impact of those changes on the price. The tools also allow them to see how the manufacture of their order is progressing. Customers like this facility, and it has also taken some of the burden of customer hand-holding away from reps, who are now free to pursue new prospects.

The third concept is upselling—using information about the behavior of online shoppers to point them to other products to buy. Both B2C and B2B companies regularly tailor their offers, depending on precisely who is visiting the sites, focusing attention on the most relevant product lines. They also attract top third-party suppliers to augment their offerings with related products outside their own range—for example, offering consumer-finance solutions alongside more expensive products, the cost of which customers may want to spread over time.

Amazon once again excels at upselling, drawing on its vast trove of customer data to make targeted suggestions at every stage of the shopping experience, using hooks such as “select accessories for this item,” “customers who bought this item also bought,” or “better together” combo offers. Thanks to all its superior online sales techniques, the average size of an order from Amazon is 10 to 30 percent larger than from other e-commerce sites, and the company attributes up to 35 percent of its total revenue to cross-selling. Amazon, in fact, accounted for half of all US e-commerce retail growth in 2015, and a quarter of all growth in the sector—online and offline.³

Other retailers are using digital technology to enhance their sales efforts across various aspects of their physical stores. Adidas has introduced interactive storefronts where window shoppers can discover and explore products that are on display via a touchscreen, a URL, and a personal pin code; desired items can be saved directly to a customer’s phone. This technology has drawn a significant number of shoppers into the store, with 25 percent of those who try it entering the store afterward and 90 percent of passers-by watching while it was used by someone else.⁴

Get Mobile to Drive Growth

Do you ever consider how much power you’re carrying around in your smartphone? The iPhone 6 can perform instructions 120 million times faster than the Apollo space mission computers in the late 1960s and has 30,000 times the amount of memory.

This revolution in processing ability has put unprecedented shopping and buying power in the hands of today’s customers. More than 60 percent of Americans have a smartphone, and 80 percent of them are “smartphone shoppers”—they use their phones to help them shop while in a store, most often to research product reviews and specifications and compare prices.⁵

The smartphone user is a notably attractive customer. US consumers who regularly use their mobile phone to buy products spend 37 percent more per transaction than those old-fashioned desktop-computer shoppers. This is partly related to the greater spontaneity of mobile consumers, but it is also because they are easier to track through their decision journey. That additional data delivers vendors richer insights that can help drive higher-value purchases. We estimate that with a little more focus on their mobile strategies, traditional players in retail, banking, and travel have the opportunity to win back $20 billion to $30 billion in annual sales that are currently being captured by the e-commerce pure players.⁶

South Korea has emerged at the forefront of mobile commerce. Goods purchased using mobile devices have jumped more than fourfold since 2012 to about 10 trillion won, or $9.8 billion. This enthusiastic adoption makes the country a global leader in omnichannel commerce. The majority of South Korea’s consumers already have experience with m-commerce, and on-the-go shoppers spend about as much on each mobile transaction as they do in stores. In addition, consumers who turn primarily to their phones to shop—”mobile first” consumers—tend to spend more than shoppers in other channels.

Interestingly, South Korean shoppers are not so much mobile first as “mobile only.” Our research found that among those who shopped on a mobile device, 13 percent did not shop in stores, and 53 percent did not shop via other digital channels. Increasingly, these consumers can be reached only through their smartphones. We found that offline and in-store marketing motivates only 7 percent and 2 percent of mobile purchases, respectively. Yet mobile ads or promotions influence three out of four mobile purchases.

Mobile technology has helped many people in emerging markets join the banking system. There are more than 30 countries in the developing world, many in Africa, where more people have mobile banking accounts than traditional bank accounts. In fact, roughly half the world’s adult population does not have a bank account, but nearly 80 percent of these people are in West Africa, where mobile-phone penetration is 40 percent. The opportunity for banks is enormous, with the added bonus that digital channels continue to drive operating costs lower. It costs just $0.10 to process a check that a customer has photographed and deposited via mobile phone, compared to $7.50 for the same transaction in person.

Leading companies have progressed beyond small-screen versions of their websites and have apps tailored to the medium with additional functionality. Online grocer FreshDirect helps customers browse and shop its entire inventory and update their shopping lists. It even flags relevant special promotions. The company also aggregates rich data on each customer, including purchase history, when they shop, when they prefer to have orders delivered, types of promotions they use, browsing behavior by category, and device(s) used. This helps FreshDirect determine where each customer is in his or her journey and deliver targeted ads, content, offers, and item suggestions. The company also regularly launches new offerings. In January 2016, it began offering Brooklyn residents the option to order pre-prepared meals or ingredients for specific recipes in just one hour from their iPhones.⁷

That type of convenience and tailored experience is not only helping companies build stronger connections to customers but is also helping drive down costs. Some 40 percent of US drugstore chain Walgreens’ total online prescription refills are ordered via its mobile app. This saves time for pharmacists and reduces the need for additional employees.⁸

The power of mobile to connect directly with customers has helped the travel industry in particular. American Airlines is expected to reach $1 billion in mobile-based sales within two years, which would account for 35 percent of its bookings. Already, two global hotel groups get the majority of same-day hotel bookings from customers using smartphones or tablets. Mobile sales channels can create enormous value for brands as customers increasingly buy direct: hotels can achieve up to 15 percent better occupancy rates. InterContinental Hotels Group, for instance, gets almost 60 percent of its room bookings through its own apps or mobile site.⁹

The power of mobile isn’t just about remote shopping. When used well, it can enhance the in-store experience as well. Cosmetics retailer Sephora, for instance, provides customers with iPads, which they can use to scan products and find additional information, read product reviews, or add items to their shopping list. These features are also available as a mobile app that has been downloaded more than a million times.

Such expanded product information also has a potential sales impact. In restaurants that have tested digital menus, access to additional details about the restaurant’s food and wine selections have led to a 20 percent increase in wine consumption. The use of phones as digital wallets has helped streamline the checkout process and allows staff to focus on higher-value-added tasks.

The future of mobile’s power to connect with customers may be through augmented reality apps. China’s largest online grocer, Yihaodian (now owned by Walmart), is using this technology to bring its products to its customers. The company has “built” 1,000 virtual stores in empty spaces such as parking lots in towns and cities. Only shoppers using the Yihaodian app can see the stores. Open the app and the whole supermarket is visible on screen, with virtual aisles to walk through. Purchasing is simple: tap the items you want to buy and then arrange for delivery.¹⁰

Integrate Digital in a Great Omnichannel Experience

For all the success that digital sales channels are generating, they remain only one part of an increasingly intertwined selling proposition. Sales leaders have found that one of the greatest benefits of their investments in digital channels is improving the performance of more traditional channels (see Chapter 4). Consider the pharmaceutical industry, where the traditional direct model is under assault from both the Internet and changes in healthcare delivery and payment. Healthcare professionals and their patients rely heavily on the Internet for information about diseases and medications. A third of those taking prescription medications actively compare treatment options on the web. Meanwhile, payors have more say about which drugs are prescribed than physicians do and, in many countries, pharmaceutical companies can no longer access physicians’ prescribing data. Field reps only encounter the person making prescription decisions 60 percent of the time, and the average visit with the decision maker lasts less than six minutes.¹¹

With a big boost from its digital channel, Merck is demonstrating how the direct sales model can evolve in these conditions. Januvia, its diabetes treatment, was approved just a few weeks before a competitor was expected to release a similar drug. Merck launched a multichannel program to make sure Januvia would not suffer as a result. Within hours of the drug’s approval, the Januvia.com website went live, and call centers were up and running the next day. Merck organized a symposium on Januvia that was broadcast online. Sales reps then followed up with visits to 50,000 practices that opted into the video briefing. This concentrated effort brought fast results: within just eight days, pharmacies had the drug in stock, and almost three-quarters of targeted physicians had been briefed. A month out, Januvia accounted for 14 percent of all new diabetes prescriptions and has maintained that market share.¹²

Creating a smooth transition from online to offline sales remains a challenge for many companies, though the rise of smartphones and wearable devices creates new opportunities to merge physical and digital channels. The head of sales at a major consumer-electronics company found that the majority of shoppers for large TVs did their research on Amazon before going to a store to see the actual products. He also learned—to his dismay—that more than a third walked straight out again because what they saw on the shelf did not match the product numbers, features, and prices they had seen online. He responded by investing in online content-creation capabilities—his company would supply consistent, up-to-date, and clear content for resellers across online and offline channels. This was challenging, because he had to convince big-box retailers that providing better content to Amazon and other online stores would not simply boost sales on those sites. The sales team negotiated with retailers such as Best Buy to put signs up with a number that customers could text to receive additional product information on their cell phones—the same information they would have seen on Amazon. Sales online and offline shot up rapidly, and the first TV line sold with the new approach became Best Buy’s biggest seller, exceeding forecasts fourfold.

The TV supplier is not unique. In our research, we found that many consumer-packaged-goods companies invest heavily in content for their increasingly important online distributors. They are dedicating teams of 10 to 15 people from marketing and sales to optimizing their sales across all geographies and categories on Amazon.

Nordstrom’s TextStyle service provides personalized styling experience and the ability to shop via mobile texts. Sales staff at Nordstrom’s 116 US department stores can send product recommendations to registered customers via SMS, and if the customer likes an item, they simply reply “buy” and include a unique code to complete the transaction with their nordstrom.com account. This gives Nordstrom’s in-store sales staff access to more customers, improving their productivity.¹³

US grocer County Market uses smartphone location technology to deliver its targeted in-store messages to customers. Some 50 stores have one or two location beacons installed per aisle that can reach consumers standing within 30 feet. This allows the store to deliver promotions on products that a consumer is physically near, or on complementary cross-sell items (e.g., jam when a consumer is buying bread). The offers are tied to shoppers’ loyalty cards, which helps ensure shoppers aren’t bombarded with too many offers or duplicate offers. Take-up rates have been impressive. Some stores have seen up to half of consumers taking up the offers they receive.¹⁴

One channel that has seen particularly explosive growth is social media, though given the variety of options, this format is a universe in itself. A few of the big players just seem to be going from strength to strength. As of 2015, more than 20 percent of the world’s population was active on Facebook, and people were spending an equivalent of 1.7 million years. Meanwhile, LinkedIn boasts more than 400 million members, 45 percent of them in upper-management positions.

While social media is still used for connecting with friends and posting updates, it has matured to become a viable commerce channel. Social media recommendations induced an average of 26 percent of purchases across all product categories, according to our data. For the 30 product categories we studied, roughly two-thirds of the impact was direct; that is, recommendations played a critical role at the point of purchase. The remaining third was indirect: social media had an effect at earlier decision-journey touchpoints—for example, when a recommendation created initial awareness of a product, or interactions with friends or other influencers helped consumers to compare product attributes or to evaluate higher-value features. We found that in 2014, consumers made 10 percent more purchases on the back of social-media recommendations than they had in 2013.¹⁵

Financial-services company American Express has embraced social media to promote sales among the millions of small businesses that use its card services. In the run-up to the annual post-Thanksgiving start to the Christmas shopping season, it promotes Small Business Saturday. In November 2015, the campaign generated 85 million social-media interactions. But people weren’t just talking about it: more than 95 million consumers shopped at small businesses on the day, an 8 percent increase over 2014.¹⁶

In B2B, integrating social media with other channels is opening opportunities for growth. Cisco, for example, posted a very short video that introduced the new capabilities of a switch processor, but rather than just ending with a link to more information, the video explained how you could schedule a test drive of the system: while watching a live streaming video, the potential customer has full control of a robot arm that can pull a circuit card out of a network router. The idea is that this demonstrates there is no impact on the quality of the streaming video, contrary to expectations. Cisco promoted the video through banner ads, blogs, social networks, and e-mails, and it provided a simple way for viewers to take action by inviting them to contact a Cisco rep to set up the demo. In the first four months, the promotion drove nearly 6,000 video impressions, but that translated into 500 contacts from interested users, 60 qualified leads, and more than $80 million in revenue.¹⁷

Social media has been around for a long time by digital standards, but smartwatches are still a niche item. Nevertheless, retailers are already experimenting with them as yet another way to merge the digital with the physical to drive sales growth. Customers at Carrefour in Paris can shop using smartwatches to access digital shopping lists, navigate around the store, tick off items while shopping, and receive their loyalty points at checkout. As the technology matures, we expect companies to find ever more creative uses for watches and other smart wearables.¹⁸

Blending digital channels into a company’s overall multichannel approach requires changes beyond the sales force. In most of our interviews, sales leaders told us that embracing these new channels changed how the sales force interacted with product development, marketing, distributors, and customer service. In fact, the proliferation of touchpoints with customers means that boundaries are increasingly blurring within organizations. Companies that are thriving in the digital age are those that can figure out creative ways to pull together the best resources from across the organization (see Chapter 11). The world’s best sales organizations, in fact, have often taken sales “beyond sales” by making each function see itself as contributing to the customer experience, be it product design, sales, customer service, and even operations (for example, the internal IT department).

Remember the lighting company we introduced at the start of this chapter? For all the benefits it saw from investing in the online channel, it also found that customers preferred to keep certain aspects of their purchasing process offline. When developing an RFP, for example, customers still wanted to work over the phone or in person with the distributor or supplier. To make its online and offline multichannel setup work, the company expanded the role of the corporate digital-marketing team. It worked with the sales team to design the hosted distributor sites, added an inside sales team to handle the leads coming out of the digital channel, refocused its sales staff on teaming with distributors to meet complex customer needs, and beefed up its technology and analytical capabilities to run its entire digital operation.

Once customer projects were completed, the digital-marketing team encouraged customers to post case studies on the company’s website. The team then e-mailed these stories and related images to other customers and cross-posted to key lighting and design community sites. The e-mails also led back to the offline sales force, with phone numbers for specific salespeople who were trained to talk about the applications and related projects. In some markets, junior salespeople took turns monitoring community sites—answering questions, adding links to positive postings about their products, and announcing new models—activities that would have traditionally been done in marketing, and all of which contributed to that 15 percent boost in sales.

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Digital channels continue to push the boundaries of selling and, with the evolution of new technologies, sales leaders will have even more opportunities to find and attract prospects with customized offers. As the interviews at the end of this chapter set out, this may mean relinquishing some control of the brand, as Google’s Margo Georgiadis explains; or it may mean transitioning customers to new platforms, as Itaú Unibanco’s Marco Bonomi discusses. Some executives will follow the lighting company’s lead and build online ecosystems that connect dealers with customers and create social as well as technological platforms on which communities can thrive. Any sales leader with the ambition to be at the cutting edge of digital sales will certainly need to obsess about optimization and be willing to take some risks and try new ideas such as Yihaodian’s innovative augmented-reality supermarket.

Digital channels are increasingly important, but leading sales executives know they work best when combined with the direct sales force. In the next chapter, we see how they are rejuvenating this more traditional channel.