Using Information Technology to Boost Profit
The explosion of available business data, and the proliferation of powerful analytical tools to turn that information into business-building tactics and strategies, are uprooting—disrupting—customer relations and sales and marketing strategies. For the metals and manufacturing industries, this digital transformation is creating innovative and more effective ways to find new customers, keep the ones you have and optimize the impact of your sales teams at lower costs.
The bad news is that you are almost certainly not taking full advantage of these new and rapidly shifting opportunities.
Scott Klososky, entrepreneur, turnaround expert, author, and digital disruption consultant, told the Specialty Metals Conference in last year, “On average, businesses are using just 60% of the technology they could be using for maximum affect.” Which means, he said, that you are likely risking customer relationships, product relevancy, higher profitability and the erosion of your competitive position.
Klososky said, “Companies with stronger digital intensity derive up to 9% more revenue from their physical assets.” Those with alert and visionary leadership, unafraid to take a five- to ten-year view of their industry, “transformation management” as he called it, “are 26% more profitable and have 12% higher market valuations than those with “low-beam leaders” who focus strictly on monthly results and ignore the technology available to them.
“These IT trends and new technologies are creating winners and losers in your industry now,” Klososky emphasized. “But this does not mean that you can do without human beings,” which he called the most creative, trust-building, empathetic forces in your business. Technology can be fast, dependable and extremely productive, but it cannot build relationships and exercise good judgment. The trick is to find the right balance, “the right mix, between the humans and the technology for your business,” he said.
That, Klososky said, takes a “high beam leader” who can understand and efficiently incorporate potentially disruptive technology into the business. Such a leader can recognize and embrace developments like small batch manufacturing and 3D printing. This means that in many instances the cost of production is dropping and the construction and organization of factories and metals processing facilities have to change.
“On average, businesses are using just 60% of the technology they could be using for maximum affect.”
The same magnitude of change, he pointed out, is happening in marketing and sales as companies acquire the data collection and analytics capabilities to anticipate, process and capitalize on evolving customer behaviors. “Your old customers are going to die,” Klososky said. “Your new customers will be younger and will be used to buying things online, for instance, and doing a lot of self-service transactions, from shopping to completing sales.”
Relationship selling will never be obsolete, but the relationships will be different and will require new tools for acquiring and building them. “You can build a digital revenue engine to help you understand your customers’ journeys, measure the impact of your marketing and sales efforts and close more deals,” Klososky said. You need humans for all this, he emphasized, to effectively mix old school and new sales efforts. “By simply having a better understanding of the buyer’s goal, challenges, wants, needs, questions and emotions, we are better able to influence their movement through the sales process.”