We live in an increasingly connected world and it’s changing the way we do business. The biggest changes are yet to come as people, processes, and things are all becoming interconnected in what is known as the Internet of Things (IoT). The Internet of Things, a term coined by British entrepreneur Kevin Ashton in 1999, includes three types of connections: machine-to-machine, person-to-machine, and person-to-person. IoT transforms the way we transfer and collect data, increasing the speed and abundance of information. This has the potential to revolutionize business models.
With new data available about customer behaviors and needs, businesses can rethink the sales process and greatly improve client support and retention. The implications for the way organizations structure and compensate their sales forces are important. And while the focus of this article is the industrial manufacturing industry, a lot of the predictions apply to other industries as well.
The rise of the Internet of Things creates huge opportunities for businesses worldwide. Cisco estimates that IoT will drive an increase in global corporate profits of 21% through reduced costs, increased employee productivity, improved customer experience, and reduced time to market.
But not everyone will benefit to the same extent. Industry leaders must think ahead and transform their sales organizations to meet the challenges and opportunities of IoT. More specifically, organizations must rethink their sales process and sales compensation, in a way that they meet the quickly evolving needs of the market, salespeople, and customers.
To help you stay on top of the game, here are a few predictions on how the Internet of Things will impact sales organizations in the industrial manufacturing industry. However, as noted above, these predictions apply to other industries as well.
Change in the way organizations incentivize sales people
The Internet of Things, through the newly available data, will enable companies to deepen customer relationships. As a result, we can expect an increase in focus on customer support and retention. As sales reps will be better equipped and have more insights to engage with clients, there might be more pressure on them to build and maintain long-term relationships with clients.
If companies change their sales strategies, they will also have to be effective in motivating the new desired behaviors by designing plans than correctly incentivize the sales force. In addition to pushing sales reps to close as many deals as possible, organizations will likely choose to incentivize more time spent with clients, customer satisfaction, and other behaviors related to client retention.
Opportunities for cross-selling and upselling
As customers get accustomed to the new technology, there will be further demand for innovation in the IoT ecosystem. This will create new opportunities for companies to cross-sell and upsell by developing innovative solutions and integrated models. Packaging of products to create program solutions could become popular which could add to the inertia on the part of the companies to change big. Automation of such services will also drive the impact on better customer experience, further increasing inertia. Both these points could potentially cause the selling cycle for new accounts to lengthen, as they’re looking to sell longer programs and engage with clients on an ongoing basis.
To accommodate this potentially changing sales cycles, organizations might have to rethink sales compensation models to include more intermediate metrics and keep salespeople motivated and focused throughout.
Also, with more and more sales support tools becoming compatible with the Internet of Things, we can expect an increase in visibility into existing customers’ behaviors. Salespeople would then need to focus on identifying and addressing needs efficiently and in real time. All these changes are bound to affect the structure of the sales force and organizations might need to reallocate resources. Also, new sales roles related to client support might be necessary.
Potential for partnerships to leverage opportunities
As a part of cross-selling and creating an integrated IoT ecosystem, there will likely be an increase in the number of partnership opportunities for companies with a view of creating program solutions. This will weave a whole new web of processes. The role of developing and maintaining client relationship might shift from one partner to another and, again, this will require organizations to redefine the sales process, sales roles, sales operations and compensation. Sales Operations, Finance, and other stakeholders need to be ready to leverage the opportunity of partnerships through agile processes and plans.
At the pace that technology has been changing the world for the last decades, there is no time to lose. Organizations that want a slice of the IoT profits need to start planning for the future today. The Internet of Things is here to stay and will undoubtedly impact business models.
It’s hard to know exactly how the Internet of Things will change the business world. However, companies that have a clear road-map for the future and that develop their ability to react quickly to change will be ready for the expected as well as the unexpected and will drive the transformation, rather than lag behind and pick up the crumbs.
Can you adjust compensation plans quickly in the face of organizational change? View this webinar to learn proven strategies that will help your sales organization capitalize on market or organizational shifts.