Your Manufacturing Company’s Future is in Digital Experiences
Philips — a business to business global manufacturing company — invested in digital infrastructure to accommodate its customers’ evolving digital needs. Scores of their distributors began to move away from traditional methods of communication — like phone calls and faxes — to online platforms. Philips had the overwhelming sense that digital experiences were becoming a core expectation even from traditionally low-tech manufacturing customers. And perhaps this evolution was the most potent differentiator Philips could offer its supply chain.
The investment paid off for Philips. They now have an enormous digital presence that includes 78 markets and 38 different languages. In fact, while this transformation had great benefits for customer relationships, the real proof of success came from cost savings and increased revenue. For example, translations happened 75 percent faster with a cost reduction of 90 percent. That includes more than 30,000 daily updates of product images and videos, and more than 14 million web pages.
But Philips is not the only company focusing on digital experiences. For instance, IDC FutureScape recently predicted that manufacturers that can enhance customer experience can expect to boost aftermarket revenue by 20 percent. Similarly, PriceWaterhouseCoopers reported that the broad digital transformation of products and services by industrial companies can generate 2.9 percent increased revenues annually.
“We’ve seen a digital awakening of the manufacturing industry in the last five years,” Jeff Hood, principal at Deloitte, says. “This transformation comes in the wake of retail, financial services, and other customer to customer marketplaces that approach their buyers as individuals as opposed to just businesses or buildings and look at what is the buying experience.”
Manufacturers are quickly learning that offering a superior product is no longer the industry’s key differentiator — and are increasing their digital maturity by focusing on the end-to-end customer experience. Digital transformation requires improving efficiency and effectiveness for customers resulting in better digital experiences — as digital experience has now become the key differentiator to remain competitive in the marketplace.
Customers are starving for efficiency and effectiveness
More than ever, greater efficiency and cost reduction are at a premium for companies and distributors alike. Companies that are willing to invest in great digital experiences are poised to help customers and partners accomplish this. Of course, it’s easy to see how online tools — think electronic payment processing and document signing — can speed up sales, increase the efficiency of manufacturing output, and improve customer revenue. But some of the world’s top manufacturers are taking their digital transformation even further.
“As we start to work with manufacturers of all different flavors — whether it be in automotive, aerospace, chemicals — what we find is that they’re all focused on how to create an end-to-end journey with moments that really differentiate them over their competitors, whether it’s during the actual buying transaction, ownership phase, or during the repurchase cycle,” Jeff says.
For example, Caterpillar was one of the early movers in their marketplace to start offering a holistic customer journey for their partners. For two years, heavy-equipment giant Caterpillar was an investor in Yard Club, an online equipment rental platform. During that time, Yard Club expanded to a SaaS tool — which includes equipment inspection and maintenance, scheduling, dispatching, and fleet visibility. It was no surprise when, in May 2017, Caterpillar announced that it was acquiring Yard Club.
“They are acknowledged publicly for the marketplace that they’ve created. They now combine Caterpillar equipment, plus labor and other equipment into a marketplace to help their customers optimize their jobsite,” says Jeff. “They’ve really focused on the outcomes that their customers are trying to achieve and then put together a business model that supports that.”
Manufacturers that expand their horizons to the digital frontier to solve their customers’ most pressing efficiency and effectiveness challenges will find more stable footing within the marketplace.
Customers and partners demand better digital experiences
Facebook. Amazon. Apple. Google. These ubiquitous technology companies have created customers with high digital expectations. Whether you deliver clunky experiences during business hours or require them to spend personal time on their smartphones, customers will no longer give you a pass simply because it’s a B2B relationship.
Whispers in the marketplace have confirmed the power of making customer experiences both easy to use, valuable, and beautiful. In Econsultancy’s 2017 Digital Trends Report, for instance, 86 percent of respondents agreed that “design-driven companies outperform other businesses.” In short, having a website is not enough. In manufacturing — and every other sector — customers want digital experiences that engage, move, and add value.
For example, DuPont’s Crop Protection Division turned its annual, 400-page product guide into an easy-to-use mobile app. Aside from the obvious savings in printing and distribution, this new app makes it easy for farmers to receive the information they need to make smart, timely decisions for their specific crops and location.
“DuPont has had very intensive digital transformation projects underway for quite a few years and they continue to accelerate those. Dupont is at the forefront in the industry,” says Jeff.
Digital experiences become the key differentiator
“You make a great product; so do your competitors,” says Axel Heyenga, industry strategy director for EMEA at Adobe. “Manufacturers typically compete on product quality, but in many circumstances they will privately admit that the differences among choices aren’t necessarily that significant.”
Axel says that the need for manufacturers to differentiate themselves from their competitors has become increasingly acute over the last few years. Most of them are now looking for ways to better meet their brand promise or encourage repeat buying.
“There is a growing portion of manufacturers that are enlightened about this and are gravitating more toward digital experience design and design thinking in how they go to market,” says Axel.
A large majority of manufacturers are taking some steps toward digital transformation, but with little commitment or strategy in place. According to Axel, only 10 to 20 percent of all brands are truly investing in and driving toward digital transformation.
However, the move toward digital experiences is inevitable. Given the gains that digital-conscious manufacturers are seeing, it benefits industry leaders to embrace the experience evolution.
Manufacturers have a choice ahead of them. They can embrace digital transformation and differentiate their brand from other manufacturers by creating experiences that generate real value and endear customers to their brand, or ignore their customers’ rising expectations, and then let their competition enjoys the fruits.
Learn more about how digital experiences are reshaping relationships between manufacturers and distributors in our #manufacturing series.