Is Buy-It-Yourself Adoption Generationally Dependent?
January 6, 2020 | Contributed by: Charles Laughlin
Will small businesses that buy digital services from a live rep today willingly shift to buying from an AI-driven automated sales platform?
The short answer is yes. But not everyone. And not for everything. At least not yet. And also, no surprise here, younger business owners will lead the way.
This question of whether buy-it-yourself (BIY) will fly is top of mind for execs at SMB-facing organizations, many of whom wince whenever they look at the size of the “sales and marketing” lines on their balance sheets.
While reducing the cost of sales is a leading reason many companies are at least intrigued by the prospect of a BIY platform, there are reasons to consider beyond cost. Many hold the view that a well-designed BIY platform, informed by ample amounts of data, will simply be more effective than live salespeople. After all, live salespeople are human and therefore subject to wide variability in ability and performance. And they are often driven by incentives that may not be fully aligned with the customer’s best interest.
Is the Future Already Here?
BIY is the topic of an upcoming LSA white paper, “The BIY Future: Is It Already Here?” In the paper, we assess how the industry sees the current state of BIY and gauge the level of bullishness for a BIY future. The paper was commissioned by Mono Solutions.
Here is how we frame the topic in the report’s executive summary:
The notion of a buy-it-yourself platform has been out there for a while in the local digital marketing and commerce space.
The incentives to create such a platform are compelling. Most companies selling traditional advertising, digital marketing services, SaaS tools, websites, and similar products to small businesses using a direct sales force have at least mused about the possibility of driving down sales costs with an automated BIY platform.
There is also a view that a smart BIY platform would produce more predictable and sustainable sales results.
The reason? Salespeople are human and are prone to mistakes, inconsistent performance, as well as placing their own interests (e.g., generating commissions) ahead of the small business operator’s.
These behaviors lead to an erosion of trust. A BIY platform, in theory at least, could restore trust by producing a consistent performance, making recommendations based on customer need rather than what a rep needs to sell that week to meet quota.
Will SMBs BIY? Yes, but….
For this report, we surveyed and conducted direct interviews with execs at SMB-facing companies to rate the likelihood of buy-it-yourself [BIY] adoption among the small businesses they sell digital services to. The picture emerging from the survey shows that most believe BIY for SMBs in some form is either already here or will arrive very soon.
Yet there were many exceptions and caveats to this view. One common observation is that BIY is already well suited to commodity products, those that SMBs buy routinely and already accept as necessary. Fewer believe that BIY is ready for prime time among products for which the value still needs to be demonstrated to the SMB. For this latter category, there will always be a need for salespeople. This is the conventional wisdom that emerges from the report.
Another observation was that BIY adoption will be segment driven. Some will adopt BIY willingly and for a wider variety of solutions, while others will be brought along kicking and screaming — if they are brought along at all.
Not surprisingly, generation is the segmentation that many point to as the most relevant to BIY adoption. Again from the report:
Other respondents made a customer segmentation argument. And generational change was one key factor behind this view.
Karsten Marquardsen, CEO of the German publisher Heise, said this, “Some digital first movers and young people will do this.”
Rajeev Gupta, CEO of digital fulfillment company Adaan Digital Solutions, said this, “With the turn of this generation, most SMBs will be run by millennials – at that point, BIY will reach its critical mass.”
Most of the roughly 100 execs we surveyed for the report sell digital marketing or SaaS solutions. They overwhelmingly supported the view that generational change will drive BIY adoption.
The notion of using AI-driven automation in the sales process will be infused in multiple sessions at the LSA’s upcoming Localogy 2020 event, March 16-18 in San Antonio.
The white paper will be published later this month. As noted, the paper is being produced in partnership with Mono Solutions.