The sale of "classic" capital goods also requires customer proximity and excellent product knowledge in order to be able to offer customers individually tailored sales and service solutions. How will digitization change classic sales and business models in the coming years? On September 12, solutions.hamburg will provide practical insights into this topic. The two speakers spoke to the editorial staff in advance.
Editor: Can you briefly introduce yourself and your company?
Jens Kocab: My name is Jens Kocab, I have been working for Linde Material Handling since October last year and am responsible for digitisation. Digitalization at Linde includes different columns: On the one hand, we develop new digital products based on the possibilities offered by new technologies. We have more and more sensors, our vehicles communicate more and more, and we have more and more data that enables us to develop new solutions for our customers. On the other hand, it is about implementing new, agile development processes to develop customer-centric solutions to provide the best possible customer experience. And, of course, this is accompanied by cultural change within the company, which is one of the greatest challenges in the context of digital transformation.
Dr. Florian Heydenreich: My name is Florian Heydenreich. At Linde I am responsible for sales and service in Germany. Linde Material Handling has been one of the leading manufacturers of industrial trucks in Europe and worldwide for more than 50 years. In addition to industrial trucks - forklifts and warehouse equipment - we also offer our customers fleet management and assistance systems. In recent years, we have been undergoing an exciting transformation and further development of our company - partly due to digitization - in order to offer our customers holistic solutions. In concrete terms this means that we want to talk to our customers as early as possible in order to simulate, analyse and plan their material flows. We would also like to provide our customers with comprehensive support in the implementation of these material flows, be it with industrial trucks, software systems, shelving, conveyor technology, etc. and of course the corresponding service.
Editor: What does digital transformation mean for the capital goods industry?
Jens Kocab: Digitalization and digital transformation is almost a buzzword, present everywhere no matter where you are. We always have new and more sophisticated technologies such as sensors, which are becoming more and more affordable. With cloud computing we have completely different sizes of data storage available and we are getting more and more artificial intelligence based on algorithms. And the combination of these individual points enables us to develop new solutions and services for our customers based on the data we have and the algorithms we build on it.
However, it is much more important for us to position ourselves much more customer-centric, and the customer has moved even more into focus. We are currently working on developing new services to really create the optimal customer journey for our customers. When you start to really understand the pain points and needs of the customer, you automatically come to develop optimal products. The biggest challenge here is that we have to change ourselves, and digital transformation means primarily a cultural change in the organization and in the industry as a whole.
It is important to us that we have a better understanding of customer requirements, but that we can also interact more individually with the customer.
Dr. Florian Heydenreich: In the future we will have many more interaction points and more interfaces to the customer, where he will exchange data with us and talk to us about his problems. Be it online, be it in personal consultation, be it in the exchange of data from the vehicles or from the process data using the software. It is important to us that we have a better understanding of customer requirements, but that we can also interact more individually with the customer in order to be able to develop tailor-made solutions for the customer. This can result in us being able to offer the customer truly tailor-made products, but also to develop new contract models. However, internal process optimization through digitization is also important. For example, we can better plan our service technicians and optimize service processes, which in turn helps customers save time and money.
mgm: How is the sale of capital goods changing in the context of the digital transformation?
Dr. Florian Heydenreich: In the past, it was mainly the classic sales representative or key account manager who advised the customer. There are many challenges and opportunities for sales in the context of digitization. First of all, the customer can inform himself much more easily. He can obtain information transparently on the Internet, he can analyze his processes himself, he can process the data from the material flows himself and see corresponding optimization potential. Accordingly, the sales department also has to provide really tailor-made solutions in the discussions with the customer, because the customer has much higher expectations.
The second challenge is a question of competence. The sales department must understand how our products fit individually into the customer's application and how they behave in the customer's application. In the future, it will be the case that the classic sales representative will no longer be able to handle this task alone, but will increasingly fall back on expert teams. They will design a tailor-made solution for the customer and the distributor's task is to put together a package of what we offer the customer.
And so the challenge is: On the one hand, to continue to maintain a consulting-intensive approach and sales, to ask: "How do I manage to explain our products to customers in the best possible way? And on the other hand, to combine the various interfaces in such a way that we know exactly what the customer's requirements are. In the future, our customers will also be informed about our products by different departments. While one department is communicating with us via our app, the other department is configuring a product and the classic buyer or fleet manager is telephoning our sales representative. We have different parties who talk to each other and with us and at the end of the day the client expects us to offer a holistically optimal consulting service for all. This complexity of data, requirements and interfaces must be brought together by the salesperson in order to create an ideal package for the customer.
Jens Kocab: Another major trend will be that more and more mechanisms from B2C move-in into B2B business, from product configuration to payment methods, delivery tracking, etc., will be introduced. The main difference is that in B2C I usually only have one decision maker, whereas in B2B many different people or departments are usually involved: the fleet manager, the logistics manager, the buyer, and perhaps a managing director or a controller for larger investments. All these want to be picked up individually according to their own information needs. Generating the "seamless journey" that we know from B2C business, also in B2B business, is therefore much more complex.
Of course, digitalization also offers an exciting opportunity to address our customers in a different way.
Of course, digitalization also offers an exciting opportunity to address our customers in a different way. The classic distribution channel for industrial goods used to be primarily via sales employees. These will also be in the front row in the future, but we also have the option of picking up the customer much earlier. Especially through the millennials, which are now coming more and more into positions of responsibility, because these act quite differently. They first inform themselves online, search via search engines, also read comparison reports and pay attention to testimonials. They collect information in completely different ways and above all: They want to be offered a solution for their problem as directly as possible. The customer expects specially tailored landing pages where exactly the information he is looking for and needs is made available. So he sees that we are the partner who can offer him the individual solution for his problems.
The distribution channels through which our products are marketed will thus change in the future. There will be simpler - not quite so explanation-needy - products, which I can market in the future also as capital goods on-line and which the customer would like to buy also on-line, because it is more practicable for him and the expenditure is smaller. Other products will remain in need of explanation in the future and we will have the challenge to find a multi-channel approach for them. How do I manage to pack the needs of the customer, our dealers and our needs into a total solution and serve them via different channels? This is an exciting question to which we will continue to devote ourselves.
Editor: What influence does digitization have on corporate culture?
Jens Kocab: We have many sales locations in different countries and we have different production locations, as well as service locations and spare parts locations. It is exciting to combine the knowledge, the know-how and the mentalities of the individual locations in an interdisciplinary way. The result is much more powerful than when I am sweating in my own juice at headquarters and try to innovate and develop new solutions, new business models from there alone. Our structure enables us to integrate the various national companies closely into Linde's processes. Many of the companies also drive their own innovations, which are then taken up again by other national companies.
The biggest challenge, however, is that digitization also means standardization. It is incredibly difficult to find the right balance: What do we standardize and where do we leave the corresponding freedom so that we can continue to be innovative, fast and customer-centric? This requires a high degree of communication, and for an international corporation this is also the challenge to really take all employees on the journey. That is why we in the Task Force have chosen the bottom-up approach to pick up everyone. Now we have launched another strategy project in which all national companies are explicitly involved, in which a common goal is generated, on which everyone works and on which everyone pays.
That is then again a part of the cultural change. How do I proceed, how do I steer, do I also work agile? For some, agile work - to put it provocatively - feels like anarchy and chaos. That's not what it is. But you've got to let a little chaos happen. I have to let go in management, let go and go in completely different cycles. Perhaps also in many things and in many places act more as a mentor than the top down manager.
Dr. Florian Heydenreich: The big challenge with this topic is: How do I embed the topic of digitization in the company and how do I transform the corporate culture with it? In the past, we were very strongly sales-oriented and also had the classic breakdown by business unit: "new vehicle sales", "rent used" and "service". Now the question arises: What does digitalisation mean for Linde? How do we line up? It is also the task of culture to tear down one or the other wall between the areas in order to develop holistic projects and also to encourage the willingness of colleagues to work openly together on the topics.
It is a great challenge not to become a two-speed enterprise where the "old" enterprise is worth nothing because the future lies in digitization.
On the other hand, we have more than 13,000 employees worldwide. These are not just 20-year-old colleagues who all grew up with IT and apps, they are not all digital natives. Many colleagues who have been operating this business very successfully for 20 or 30 years have of course also difficulties to think their way into the subject of IT systems or digitisation. And there it is the big challenge not to become a two-speed or two-culture company where the "old" company is worthless because the future lies in digitization. The task is to give appreciation to all colleagues. This is a complex, time-consuming but also communicationally important process to pick up all the people in the company so that they proactively support the topic. How do I manage to convince as many employees as possible on different levels, at different levels of education and competence of the chance of digitisation? How do I manage to spark this enthusiasm for what digitization means to me in the company with the first solutions and products I implement?
Editor: What are your expectations of the Solutions trade fair in Hamburg?
Dr. Florian Heydenreich: We have chosen a relatively heretical title for the lecture: "Is classical distribution dying out due to digitalisation? We believe in the role of a strong sales partner and also see it as elementarily important in the future. However, we expect sales to become more complex. On the one hand, customer requirements will become more individual and complex. On the other hand, the trend will be for sales teams to appear at the customer rather than individuals.
Jens Kocab: Our business model will certainly change in the next five to ten years. If we take the automotive example: Today, more and more vehicles are only hired in conurbations - due to transactions when a vehicle is needed. There are sharing applications where vehicles are exchanged with each other. Nevertheless, the personal contact between our employees and the customer will continue to be important. In the future, we will have many building blocks and a lot of information that we can use to advise customers in a more targeted and dedicated way. But the human contact and also the know-how in the minds of our employees will continue to be one of the core factors for being able to operate successfully in the market.
mgm: Thank you very much for the interview!