Why Do Clients Buy From YOU?

The Buying Experience

What type of product do you sell? It is easy to get this wrong, for example assuming you fulfil an essential role in clients’ workflows, when in fact you are nice to have. The answer matters when considering what you should automate and the risks technology poses to your business.

A CEO in the services sector told me recently that he had two types of clients. The first works with physical objects, in manufacturing, construction and logistics. These clients have steady cash flows and keep limited cash reserves as a consequence. It is easy to measure whether a service, such as an inventory management system, improves the company’s margins. The decision to buy is quick as a result.

The second category of clients sits behind a computer screen, as do their customers. These companies keep larger reserves because cash flows can be lumpy. Tools that boost the sales process, such as generating qualified marketing leads, are simple to measure, but other efficiency enhancing processes are harder to prove. OTAS Technologies fell into this latter category, because it supported trading decisions, but was not the trigger for most trades to happen.

Three-quarters of online shopping searches in the US originate on Amazon, according to Chain Store Age. Kurve reveals that two-thirds of business buyers start their process by looking at websites. If you want paper towels, Amazon is the best place to find the lowest pricing. If you want to compare unfamiliar product features, it’s a challenge. How your business deals with the buying experience matters a great deal.

SaaS is CRUD

The four basic operations of data storage are create, read, update and delete (CRUD). They enable users to view, search and change information. Microsoft CEO Satya Nadella argues these functions will be performed by AI with continuous access to data. SaaS will disappear, because there is no need to programme specific routines that AI can do with a prompt. How big an opportunity or threat is that to your business?

The opportunity is to automate processes, while the risk is your product becomes obsolete. But AI is expensive and technology stacks hard to re-engineer, so the risk may be some years away. The timeframe depends on how great the incentives are to replace your service, and how you sell it.

A traditional automated process is an if, then statement. If we sell an item, then update the inventory record. You don’t need to replace this with AI. But if you predict inventory to know when you will need cash to pay a supplier’s invoice, you may benefit from AI.

If you sell a few items a day and restock when inventory reaches a certain level, there is little incentive to update the process. If, however, you sell a lot each day and make regular purchases, AI that tracks the changing rate of sales and predicts when you should restock will make your process more efficient. You will not need to keep as much cash in the bank.

Predictions matter when dealing with live data. Examples include share trading, managing wildfires and customer conversations and interactions. When potential outcomes change frequently, automations that lack AI will be upgraded.

If selling requires a product demonstration then your sales process is at risk. I don’t need a demo of a paper towel, but I might for a fashion item and I do for a trading application. Imagine prospects being able to simulate the experience of using the app. When we showed OTAS, users put real trades into the software. Nothing happened, because the point of exception analysis is that conditions are normal most of the time. The ability to simulate exceptional events and the experience of how the system responds, would have improved sales success.

Note in this case it is not the product changing, but how it is sold. I am working with a client using video to showcase customer experiences. Its competitors use pre-rendered video. Imagine putting on a VR headset and exploring a factory, home or playground, moving objects and flicking switches. The client believes this will make them the category killer.

Interaction, Prediction and Personalisation

If your process or product involves uncertain outcomes, or personal recommendations and experiences, or conversation by text and speech, someone somewhere is figuring out how to automate away your advantage.

Questions to Ask and Answer

1. How do I measure the return on investment from productivity tools?

2. How big is the incentive to reinvent my market (towels vs trading)?

3. How would an interactive experience increase my sales success?

When you are ready there are three ways I can help:

1. Schedule a call to chat or ask questions about AI with my tech team.

2. Resolving Team Conflicts: A free email course tackling an issue that no one teaches you as a manager.

3. The Profit Through Process Planner: My flagship course on how to design and invigorate a business that scales. I share 30 years of experience of researching, investing in and running companies, intermingled with the science and stories of business.