Mastering the digital transformation of sales

Article originally appeared in California Management Review, 2020, Vol. 62(4) Pg. 57-85

By Paolo Guenzi and Johannes Habel

What/Focus

Companies are investing heavily in digital transformation, including of sales, however many are struggling to capitalise on their efforts. There is little research evidence and guidance on how to holistically transform sales, leading to the implementation of random and incremental processes. The aim of this article is to provide a prescriptive model based on a literature review and semi-structured interviews with managers and salespeople across a range of industries. The model is then applied to analyse the current state of digital transformation of sales processes in an international sample of companies (N = 540) and highlight the distinctive features of the most successful companies with practical examples and actionable guidelines.

How (Details/Methods)

The literature review identifies two limitations of existing studies. First is the predominant focus on selected phenomena such as the adoption of customer-relationship management (CRM) technology, resulting in partial models that only cover one aspect of transformation. Second, most studies have looked at digitalisation in terms of marketing strategies, with relatively few considering its relevance for sales processes. Sales processes can be broken down into three (preselling, selling, after-sales) phases and their subprocesses across people and departments. To sum up, salespeople need to manage multiple and complex activities in their interactions not only with customers, but also inside their own organisations.

To conceptualize a model for the digitalisation of sales, a qualitative study was conducted with managers and salespeople across different industries to determine the status quo of how digital technologies impact selling processes in practice.

Rather than incorporating the three selling phases, the resulting model distinguishes between the transformation/digitalisation of customer interaction processes and internal processes, and their accompanying information processes. Moreover, an in-depth analysis of the examples collected yielded six underlying themes of how technology alleviates the lack of knowledge, speed, reach, and perceived value identified by interviewees. These 6 S pathways of digital transformation in sales are substitute, supplement, service, simplify, support, and share. For example, if the main goal of the digital transformation is to increase efficiency in internal processes by addressing a lack of speed, then companies may invest in digital technologies that help simplify processes, mainly through automation.

The next stage of the study was a cross-national quantitative survey study spanning the United States, the United Kingdom, Germany, and Italy. The aim was to gauge how managerial practice performed against the prescriptive framework for managing the digital transformation of sales.

Four categories of company were subsequently identified with regard to digital sales: transformation leaders, transformation laggards, sales enablers, and sales replacers. The article concludes with three sets of guidelines for the managers of such companies, whatever category they fall into.

So What

First, managers can use the prescriptive framework to steer their digital transformation endeavours. Companies should start by carefully mapping their sales processes, juxtaposing the importance of each process against its current performance. They can then focus further analyses on those processes that are highly important yet underperforming. For these processes, managers should identify critical pains that digitalisation can help resolve and choose digital pathways accordingly. They can then implement key actions along with performance indicators.

Second, managers can identify where they sit in relation to the four categories to capitalise on strengths and remedy weaknesses.

Last, while these recommendations will facilitate a structured approach, managers should be aware that their digital transformation endeavours are unlikely to be a sure-fire success and change will take time.