The digital transformation in sales opens up many new opportunities for companies. Yet however diverse the span of potential sales channels and analysis methods may be – any amount of innovation is worthless if these do not place the customer at center-stage. Today, the concept of focusing on the customer is known around the world and has become a targeted objective in all sectors. However, only a small number of companies are actually prepared to fully orient themselves on their customers and, if required to do so, give up the established logics. Unfortunately, this is precisely the factor that decides between the success and failure of sales in our digital age.
A worldwide leading industrial and consumer goods company was facing this challenge when it contacted Homburg & Partner. The company was planning on launching a new, digital sales concept for the lucrative Chinese market. Individual business areas of the client were already selling their own sub-brand products in China, with moderate success. The new sales concept was to exploit the potential of the Chinese market for our client in the best possible way. To achieve this, it was to center on the customer to the maximum degree.
“When entering new digital markets, it is important to take the customer relationship into your own hands and to not leave it entirely up to third parties. While external sales partners can support companies in completing sales transactions, controls via touchpoints must still always be kept within the own company. Established and globally known companies with a strong overall brand, in particular, would do well to put internal logics to the test in terms of maximum customer focus on digital channels. After all, customers are not interested in which business unit the products come from, but rather what the overall brand stands for.”
At the beginning of the project it was determined that the new digital sales concept for China should be a central, cross-divisional initiative that would focus on our client’s main brand. Our client’s previous decentralized initiatives in the Chinese market never generated a benefit that justified the effort. At the same time, the focus on individual sub-brands was wasting the potential of our client’s main brand, which enjoys a very high reputation in China as well. The new sales concept was to radically change this: by making the main brand tangible through maximum customer-centric interaction across digital touchpoints.
The next step saw the determination of the suitable sales channels. The typical question arose here, first: Should an own online shop be set up or is it preferential to collaborate with external platforms? In order to optimally achieve our client’s goals, we prioritized using an external platform for the digital sales. This has the advantage that our client can offer his products in a digital ecosystem that already exists without having to develop an own community from scratch in a foreign market. A possible disadvantage that was identified was that our client would not have the same level of control and access to customer data on external platforms as on a proprietary platform. The idea was to lastingly compensate for this, however, by developing a long-term cooperation with the platform operator.
This step clarified the strategic direction. The concrete implementation followed. The TMall platform was identified as a suitable distribution partner. TMall is the largest Chinese B2C e-commerce platform operated by the Alibaba Group. To validate the success of collaboration with TMall, a pilot project was initially designed: On an important Chinese holiday, the plan was for our client to carry out a first cross-divisional campaign on TMall and thus lay the foundation for the Chinese market entry based on the new sales concept.
In order to guarantee that the pilot phase would be a success, lots of attention was placed on the management of stakeholders. On the one hand, it was necessary to convince all involved players from the individual business areas of the new sales concept. Not an easy task as it was a novelty in the more than 100-year history of our client that business units abandoned their own sub-brands and instead offered their products under the overall group brand. On the other hand, it was a challenge to coordinate the operational process of the pilot phase between stakeholders in Germany and China – across considerable geographical and communication barriers. Nevertheless, all involved stakeholders were convinced of the new sales concept for the Chinese market.
Our client was aware that the company’s behavior on the Chinese market would have to differ entirely from that in Germany, for example. Up until that point, however, our client had been active there with numerous sub-brands, which distributed their own products decentrally. Due to the lacking popularity of these brands, the market success that was hoped for had never fully materialized. Hence we developed a sales concept that focuses on our client’s overall brand, which is regarded highly in China. End customers were no longer confronted with the complex internal portfolio logic of the division-specific sub-brands. The focus of the overall brand equally increased the end customers’ confidence and our client’s sales success.
In order exploit the potential of the Chinese market in the best-possible way, our client’s new sales concept was to be optimally focused on the customer needs specific to that country. We thus prioritized the creation of a digital experience for the end customer, which was implemented by means of various measures. For example, our client offered virtual apartments on its TMall shop which customers could navigate with a mouse or a VR headset. The apartments were furnished with our client’s products and featured an interactive design. The visible refrigerator, for example, could be replaced with a higher quality model or purchased directly with the click of a mouse. The user data made it possible to provide effective customization: Different customers were shown different facilities and furnishing based on their income. This way, the client could create a unique experience for his customers, one that strengthened the positive image of the overall brand and positioned it on the Chinese market as a digital pioneer.
The new concept already established itself during the projects thanks to its convincing performance at the initial proof-of-concept campaign. In the course of the TMALL-centered Chinese Singles Day promotion, 3.2 million people visited the landing page. That amounts to 86% more revenue generated in one day than in all decentralized campaigns of the individual divisions in previous years… combined. The introduction of the customer communities developed in the project on TMALL and WeChat was a second milestone. Multiple customer contact points and communications channels were merged in these. More than 38,000 community members registered in the first month, alone. In total, our client’s turnover on TMALL grew by 60% to over 2 billion RMB ($290 million) in the project’s following year.
If you would like to find out more about our services in the areas of customer-oriented sales concepts and implementing these or wish to discuss similar approaches for your company, please use the contact form to leave an inquiry. Our partner Daniel Antolin will personally contact you promptly after that. Alternatively, you are welcome to contact us by emailing or calling us!