Digital Transformation! That's the buzzword you hear everywhere and constantly. But ask 10 people and you get 20 answers about what it actually is. To give an overview of how digital aspects are changing the market when especially thinking about marketing and sales, I prepared a framework with lots of examples that is grounded on Michael Porter's five forces model and the PEST analysis of markets (Political, Economical, Social, Technological aspects of the market environment). The goal was to give an overview of the current market situation and an outlook on what kind of strategic (sales) decisions need to be taken that sometimes can decide about life and death of a company mid-term/long-term. Will you survive with just evolutionizing your organization or is revolution the only way to go? This presentation was held as a 2,5 hour lecture to master students of the Sales & Marketing Department of Ruhr-University Bochum (Germany) on April 23rd, 2018. The feedback of students and professor was super positive.

1. &
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Digital Sales: Evolution or Revolution?
Strategic Decisions in the Sales Organization

2. Sr Consultant
Digital Strategy
Thorsten
Sachtje
metapeople
• Strong background in
Marketing Strategy and
Customer Management
• Diplom-Kaufmann
• @tsachtje
We are metapeople.
Marketing Engineers.
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3. Company Presentation
Unsere Dienstleistungen
3

4. Netherlands
30 Employees
Switzerland
10 Employees
Dubai
30 Employees
South Africa
15 Employees
APAC
10 Employees
France
250 Employees
UK
160 Employees
Italy
15 Employees
Spain
30 Employees
Germany
190 Employees
Nordics
55 Employees
China
70 Employees
Company Presentation
Our Network
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5. Company Presentation
Our References

6. 6
Let‘s start

7. „ My goal with this presentation:
build a framework of understanding. “
Thorsten Sachtje
Senior Consultant Digital Strategy
@ metapeople
7
• @tsachtje

8. „ It is not about ‚digital marketing‘, it is about
marketing effectively in a digital world. “
Ivan Mezenes
CEO @ Diageo
8
• @tsachtje

9. „ Digital Transformation is another term for
what I call Business Transformation. “
9
Thom Groot
Digital Director @ The Automobile Association
• @tsachtje

10. „ Digital transformation is the continuous process by which enterprises adapt to or
drive disruptive changes in their customers and markets (external ecosystem) by
leveraging digital competencies to innovate new business models, products, and
services that seamlessly blend digital and physical and business and customer
experiences while improving operational efficiencies and organizational performance. “
10
IDC Worldwide Digital Transformation
Spending Guide Taxonomy
IDC, 2016
• @tsachtje

11. Economical
Social
Political
Technological
The Market
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
• @tsachtje
11

12. 12
Micro

13. Economical
Social
Political
Technological
Micro
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
• @tsachtje
13

14. Political
Technological Social
Economical
Rivalry
Among
Existing
Competitors
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Company
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
• @tsachtje
14

15. Marketing vs Sales
15
• @tsachtje
100% Sales forever
I tend to Sales
Both actually
I tend to Marketing
100% Marketing forever
What was the question?
What do you like more?

16. 16
Marketing & Sales
Source: Sparksight, June 2015.
ToFu:
Marketing Role
MoFu:
Shared Role
BoFu:
Sales Role
• @tsachtje

17. « Legacy application or
system: An information
system that may be
based on outdated
technologies, but is
critical to day-to-day
operations. »
Gartner IT Glossary
Definition
Cloud-based
scalable
systems.
Legacy on-premise
systems.
Corporate
Start-Up
17
Innovation vs Operation.
• @tsachtje

18. Political
Technological Social
Economical
Rivalry
Among
Existing
Competitors
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Competitors
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
• @tsachtje
18

19. Big and Slow vs Small and Fast? Not necessarily!
19
Better
Technology
Better Org
Structures &
Processes
Better
Trained
People
Higher
Budget /
Funding
Faster /
more open
to new
approaches
Infrastructure Organization HR Finance Culture
• @tsachtje
Organizational Playgrounds

20. Amazon‘s goal:
„Earth‘s Biggest Store“.
« Bezo‘s ability to paint an extraordinary vision
and register steady progress against that vision
is rewarded with the cheapest capital in the
history of businesses. […] And… Cheap. Capital.
Is. Awesome. »
Scott Galloway, NYU business professor
20
Profit vs No Profit
• @tsachtje

21. Confrontation
Cooperation*
21
* As Vendor/Seller, via Amazon Marketing Services,
offering Alexa skills, integrating Alexa in own devices.
Cooperation vs Confrontation.
• @tsachtje

22. 22
Cooperation with Amazon
Free Optimization: On-Amazon SEO
Paid Optimization: Amazon Marketing
Services (Sponsored Products, etc.)
Amazon Seller (Marketplace)
vs Amazon Vendor
Winning the Buy Box as Seller:
„Fulfillment by Amazon“
preferred
1
2
3
• @tsachtje

23. David Kahan,
CEO of Birkenstock:
„Birkenstock does NOT sell
Amazon“.
23
Confrontation with Amazon
Source: The Marketing Journal, January 2018.
Amazon Private Label Brands
Amazon Basics (Technical Essentials: Batteries, etc.)
Arabella (Lingerie)
find (Fashion)
Strathwood (Furniture)
Goodsport (Sportswear)
Rebel Canyon (Sportswear)
Peak Velocity (Sportswear)
…
Race for
Consumer
Access
• @tsachtje

24. Race for the perfect Customer Experience
24
Inbox Ad
Logout
Video
Native
Ad
Google
Suche
Facebook
Bing Suche
Alexa
Abfrage
Chatbot
Support
• @tsachtje

25. Political
Technological Social
Economical
Rivalry
Among
Existing
Competitors
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
New Entrants
Threat of
New
Entrants
Threat of
New
Entrants
• @tsachtje
25

26. 26
100 day Test Period,
30 year Warranty,
Integrated Powerbank
Collected Venture
Capital: 15m €
Entry barriers as low as never
Source: Horizn Studios.
„The most notable
innovation in the
luggage industry over
the past 30 years has
been the development
from 2 to 4 wheels.“
Stefan Holwe, Founder
@ Horizn Studios
„A Nike or Under Armour is missing in
the travel sector - we close this gap.“
Stefan Holwe, Founder @ Horizn Studios
• @tsachtje

27. Political
Technological Social
Economical
Rivalry
Among
Existing
Competitors
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Substitutes
Threat of
New
Entrants
Threat of
Substitutes
• @tsachtje
27

28. Make it fast, easy, convenient, …
28
Transportation Music Travel TV Shopping
• @tsachtje
The Disruptors

29. 29
• @tsachtjeSource: Innovationtactics.com.
Substitute for other
forms of transport
Competitor for other
ride-hailing companies
Substitute for one, Competitor for another

30. Political
Technological Social
Economical
Rivalry
Among
Existing
Competitors
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Suppliers
Threat of
New
Entrants
Bargaining
Power of
Suppliers
• @tsachtje
30

31. 31
Digital Transformation
Rising Customer Expectations
Need to adapt quicker to disruptive new
business models
Need to adapt quicker to disruptive new
capabilities
Examples anyone for Bargaining
Power on Pricing, via Switching
Cost, Supplier Concentration, …? Source: Boston Consulting Group, March 2017.
• @tsachtje
Supplier or Partner?

32. 32
Source: IMD Global Center for
Digital Business Transformation, 2017.
Supplier or
Competitor?
• @tsachtje

33. Political
Technological Social
Economical
Rivalry
Among
Existing
Competitors
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Buyers
Threat of
New
Entrants
Bargaining
Power of
Buyers
• @tsachtje
33

34. Consumer is perfectly
informed about everything
with shitstorm power at hand.
Sustainability in Production
High Quality Products
New Product Categories
Etc.
Product
Must be fast
(e.g. Social Media,
Same Day Delivery)
Must be perfectly informed
(360° customer view)
Service
Online vs Online:
Price Comparison Websites
Discount Websites
Offline vs Online:
Realtime price information
always available: price
differentiation difficult.
ROPO
Declining loyalty
Pricing
34
Power at a fingertip.
• @tsachtje

35. 35
Macro

36. Economical
Social
Political
Technological
Macro
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
• @tsachtje
36

37. Economical
Social
Political
Technological
Political
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
• @tsachtje
37

38. Go Live in EU on 25.05.2018!
New EU law on data
protection and privacy for all
individuals including strict
documentation requirements
and high fines: Up to 20 m €,
for big corporates even
higher.
GDPRWhat is right
and what is
wrong?
And what
about my
data?
Currently in discussion as
successor of Cookie
Guideline. Strict consent
requirement for setting a
cookie.
Could have serious effects on
tracking, targeting,
personalized advertising.
ePrivacy Latest press fuels
discussions:
Data Leaks
Cambridge Analytica
Facebook
Etc.
Data
But what
about the
tracking?
38
• @tsachtje

39. Economical
Social
Political
Technological
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Economical
• @tsachtje
39

40. Economic
40
• @tsachtje
Interest Rates
Exchange Rates
Recession
Inflation
Taxes
Demand/Supply
Economic Factors
Cheap Capital anyone?

41. Economical
Social
Political
Technological
Social
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
• @tsachtje
41

42. Established in 2016 (US). Budgets shift.
42
Digital first.
• @tsachtje

43. Established in 2016 (globally). … but not everywhere yet
43
Mobile first.
• @tsachtje

44. Established in 2015 (globally).
Messenger: 3 out of Top 5.
Facebook: 4 out of Top 5.
44
Messenger first.
Facebook, Twitter,
LinkedIn, Instagram
WhatsApp, Facebook
Messenger, WeChat, Viber
• @tsachtje

45. Google?
Bing?
Amazon?
Youtube?
LinkedIn?
Others?
Where do you search today?
45
Search Engine of Choice
• @tsachtjeSource: Survata, 2017.

46. 46
What‘s the fastest way to get „your“ product?
Source: Google, May 2014.
?
Local Search:
Consumers search for a variety of local information:
Research Online,
Purchase Offline (ROPO):
Consumers would buy in-store
instead of online knowing they:
• @tsachtje

47. 47
Infinite Options vs 8 Seconds
Source: Google, May 2016.
Micro Moments and Moments of Truth: Be there when it matters!
• @tsachtje

48. German Army
48
Decline in number of troops from
198.000 (2013) to 179.000 (2017).
Missing recruits in IT, engineering,
medical care. Increasing budget for
employer branding: 35.3 m €.
Snapchat
… and Facebook
… and Social TV via Youtube
… and Chatbot on Facebook
Messenger
Reach & Engagement
Audience / Target Group: age 17 – 25.
On Snapchat:
2.1 m unique filter users
7.5 m filter impressions
15.1 m ad impressions
Go where your audience is
+
• @tsachtje

49. Economical
Social
Political
Technological
Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitutes
Bargaining
Power of
Suppliers
Technological
• @tsachtje
49

50. „ The Future is already here –
it‘s just not very evenly distributed. “
William Gibson
American-Canadian Author
August 1993
50
• @tsachtje

51. 51
Technology Adoption
Source: Digi-Capital, July 2016. • @tsachtje

52. Source: *Voice Labs 2017 Voice Report, January 2017.
Voice is gaining traction.
• @tsachtje
*
52

53. „ Google says 20% of mobile queries
are voice searches. “
Greg Sterling
Search Engine Land
18.05.2016
53
• @tsachtje

54. 54
Voice Assistant are gaining speed
Echo Spot
Echo
connect
Echo Show
Home
mini Home Max
Assistant
Siri
Alexa
HomePod
June 2015 Nov 2016
Echo Dot
October 2017
Cortana
9
3
2
1
#
Products
Invoke
December 2017
Echo plus
July 2017
Echo
Look
Echo
Buttons
Echo 2nd
gen.
March
2016
April 2017
Google
Home
4 devices in 2 years
10 devices in 6 months
Echo
2011
Siri
• @tsachtje

55. Source: Barclays Connected Home / Ovum Digital Consumer Insights 2017: Smart Living
Google Assistant
Most common Virtual Assistant
Amazon Echo Devices
Biggest market share in Voice Devices
The Future of Voice Touchpoints.
• @tsachtje
55

56. Potential
What do you do when on the road and tired?
Samples
text
Samples
text
56
New Tech, New Partnerships
• @tsachtje

57. 57
Hype Cycle for Digital Marketing & Advertising
Source: Gartner, July 2017. • @tsachtje

58. 58
Top 10 Strategic Tech Trends for 2018
Source: Gartner, October 2017. • @tsachtje

59. 59
It‘s a wrap!

60. 60
Thank you

61. 61
Questions?

62. 62