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Sales and marketing is another area where digitisation is advancing in leaps and bounds. Although chatbots can still come across as gimmicky, “conversational AI systems” (meaning artificial intelligence systems capable of holding automated conversations) are definitely the next big thing. These include personal assistance systems such as Siri, Echo or Alexa, with user interfaces based on natural language. Thanks to AI, the dream of conversation-standard interaction with 24/7 availability over all media channels is closer than ever to becoming reality. Which makes it all the more surprising that so much work still goes into helping people to develop their selling skills.
The simple fact is that we cannot afford to sit back and wait for some “all-purpose machine” to revolutionise sales. It will not be possible to fully automate active customer acquisition in the foreseeable future – certainly not to a higher standard than sales professionals. It is true that in the near future, we can undoubtedly expect to see fully automated systems capable of telling customers about product features and prices or answering other predictable questions. Machines are not subject to whims or moods and will probably be able to provide higher-quality information. So why should we not be making the strategic decision to rely exclusively on automation? This is where new business development becomes relevant.
Plans to further develop a business always start from the same point: a business model defined in terms of factors that can cause the business to succeed or fail. For many companies, these factors undoubtedly include personal interaction with, support for, and personal appreciation of (prospective) customers. Although machines may be capable of providing higher-quality information, this does not mean that customers feel valued or appreciated by machines – and we all know how much our subconscious and our emotions influence purchasing behaviour. Consequently, a company’s decision to take this or that business development approach should be based on multiple considerations. Extreme positions can only be developed systematically by adopting extreme business models; for the most part, companies must find intelligent ways to combine multiple approaches.
Accessibility, for example, can be significantly improved through the use of chatbots and similar technologies. Insurance companies struggle with the fact that customers often prefer to seek out information – and perhaps even take out insurance contracts – in the evening or at weekends. This is where companies can offer their customers specific options tailored to their preferences. Those who prefer the personal touch and direct contact may call their customer advisers during normal working hours. And those who need information at other times or are not particularly bothered about human contact, may take advantage of the technology. This is just one example of how today’s business development strategies must consider digitisation issues more than ever before – and why we now talk about “new business development”.
Yet another consideration has changed views of business development: the whole concept of a “business model” is expanding in scope. Whereas in the past, people paid more attention to market-driven issues, today they prefer to focus on a holistic approach. This is because new business models now describe a broader range of factors that play a role in a company’s success, such as in-house skills and management culture. We have identified more than 100 structural factors affecting the success or failure of, in principle, any company. Due to digitisation, outsourcing and global distribution, modern business moves too fast for a narrowly focused approach to business development to work. This holistic perspective is another aspect we emphasise in New Business Development.
What else has changed? For many years, companies with rigidly hierarchical management structures kept strategic and operational responsibilities strictly separate. Strategic responsibility for business development was reserved for the senior management team, while the responsibility for implementing strategy was delegated to product managers and the sales force. Today, this approach only succeeds in isolated cases. In high-wage countries in particular, managers’ skills must pay for themselves, meaning that all managers are now expected to suggest business development ideas and acquire new business development skills as a matter of course. Only managers who conform to this model represent a strategic competitive advantage for companies – a viewpoint that is too often ignored in management development training and should be given a much higher priority by personnel departments.
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