Christian Sallach is Chief Digital Officer and Chief Marketing Officer at WAGO in Minden, a manufacturer of connection, interface and automation technology. For Sallach, digital transformation is a marketing issue. Why? Because getting caught up in technical questions can mean losing sight of what customers need – and being out of the loop on the really important transformation.
When I talk with top managers at customers, competitors and business partners in our industry, I often hear people say, “We’re doing digital transformation.” This is a phrase that usually makes me highly skeptical. Because it seems to be driven by the notion that there is a competition going on: who has the most complete digitally transformed company? Who did it fastest? But what exactly should it be, this digitalized company? And what is the value of being a “digital” company? What has been gained?
In our industry, populated by tech-oriented, primarily B2B companies with their own manufacturing, the main digital transformation driver is Industry 4.0, and the associated technical issues. Players in our industry tend to consider any challenge, changes and solution first and foremost in terms of products, and what the technology can actually make possible.
If you ask what these digital transformation projects mean, it turns out they’re all doing the same thing: automating processes, making operations more efficient, analyzing production data better, connecting more smartly, testing and integrating new technologies such as artificial intelligence and IoT applications. It’s all certainly needed, as a way to stay competitive and be ready for the future. Technology development is accelerating fast due to growth in computing power, so it is vital to keep pace.
Digital transformation projects: less technology, more communication
In industries like ours, however, people tend to get bogged down in technical details in the debate about digital transformation, causing the big question of what creates value to customers to slip down the agenda. And much too much time is spent creating the perfect solution instead of effecting change quickly. Here’s an example: we were in a meeting with a client organization and asked them what they thought we should improve in our online shop. The clients said an availability query would be great – they would like to be able to see at any time exactly which products are available, and when. We were surprised: this customer regularly orders the same products from us, only once a month, always in similar quantities, always with similar delivery times. Constant real-time availability reports would not deliver them any benefit since they never actually order anything outside of their usual routine at short notice. That’s what we thought. When we asked why they’d cited this need, the clients explained this was also possible with
Amazon, and they simply thought this level of transparency was fantastic. This is not a one-off incident, either. It’s something we see as a trend in customer surveys.
In my opinion, this is an effect that may have been long underestimated in the B2B segment: services and offers that work very well in the B2C segment quickly come to be regarded as the de-facto standard. They also fundamentally change the mindset of our corporate clients. As a provider, it is important to take a fresh look at established sales logic and experience and adapt to the new behaviors of customers.
Services and offers that work very well in the B2C segment quickly come to be regarded as the de facto standard.
Digital transformation of sales processes
An online shop that looks and works like an old-fashioned product catalog from the offline world simply no longer cuts it. Digital transformation of sales processes is only now really gaining momentum in the B2B segment. Other segments are already much further – just consider the online experience offered by retailers such as Amazon or
Zalando in B2C. We have to make content for business customers “snackable” in the same way that Amazon does. We have to explain complex information about our products equally succinctly, link it with specific product offerings, user-friendly functions and solutions, and organize its presentation in an equally smart way. People no longer have any desire to read lengthy product descriptions in small print.
In my opinion, the next level of digital transformation in B2B will be that customers will be less and less willing to actively search for information, suitable products and solutions themselves. They will expect to be able to just describe their problem, and we will then instantly present a suitable solution. To make this possible, we want to use language assistants and digital chatbots in the future, and we’re also working on digital advisory and self-service offerings. We are confident that players who want to set themselves apart from competitors will have to engage with challenges like this, as well as delivering classic product innovation.
Technology development is accelerating fast due to growth in computing power, so it is vital to keep pace. A two-speed digital world
At WAGO, we began on this two years ago, when we decided to tie together our digital transformation projects and design an overarching strategy. Our focus is on the customer interface. What we’re experiencing is that in the medium term we can expect a two-speed world. Some customers are slow to embrace change and are skeptical about certain digital services and transformations. Others get on board with new ideas right away, and expect us as their service provider to be on the ball and able to make a knowledgeable contribution. We aspire to support both customer groups in the transformation process, engaging with each in a way that is aligned with their needs, and offering services to match their stage on the transformation journey – rather than things that reflect general trends or hype.
For us, digital transformation is therefore just as much about marketing topic as about technology. That’s why, in addition to my role as CMO, we have also established the role of CDO and set up a Digital Transformation Office. This supports all our corporate divisions worldwide, acting as an in-house consultancy for digital transformation projects.
The digital transformation team works directly out of our head office in Minden. We deliberately decided not to hive off the team to an external incubator or digital lab in Berlin or another tech hub. After all, our main goal is to drive digital transformation within our own organization and genuinely get all our staff on board. This is vital, because like in change scenarios in just about every company, some people are skeptics, some are open to persuasion and will join in, and some are enthusiastic pioneers. The transformation team is close at hand, working to integrate these various groups and mediating between the different outlooks. So we can soon detect any sticking points when ongoing processes are undergoing change.
Of course, our strategy is also an experiment. There is unfortunately no magic formula for digital transformation. Or rather: fortunately there is no such thing. Every company has to navigate its own path through the forthcoming changes. Above all, we see great opportunities here.