8 Reasons Why Sales Leaders Should Bet Big on AI-Fueled Sales and Marketing
We’re only a few months into a new era. The pandemic has created unprecedented disruption all around us. Thousands of companies and millions of employees have moved to 100 percent remote work, e-commerce has exploded, and industries from manufacturing to retail have had to reimagine their processes—sometimes even reinvent themselves on the fly.
Businesses are emerging from a brutal test of their enterprise agility. There are countless examples of innovation born from necessity. The pandemic has impacted both the front and back office, highlighting many weak spots. It’s admittedly optimistic, but there is immense value in these tough lessons. Companies are now intimately aware of the fragile and complex nature of their ecosystems. More importantly, they know where they stand in this low touch, all-digital world.
Now is the time to invest in growth. More specifically, companies should be betting heavily on artificial intelligence (AI) in their sales and marketing transformation. Those that act with urgency can capture the market share that will surge as demand returns. Here are the eight reasons why tomorrow’s leading businesses are investing in AI in sales and marketing.
1. The shift to digital favors the digital leaders.
A 2017 McKinsey study found that “digital natives” or “digital re-inventors” are twice as likely as their more traditional incumbent competitors to report a CAGR of greater than 25 percent. E-commerce sales in retail were only 9 percent of total sales for the year, according to the U.S. Census Bureau. In 2020, e-commerce is estimated to be 14.5 percent of total retail sales and an 18 percent year-over-year increase, representing an all-time high and the largest single year increase to date.
A recent forecast from eMarketer estimated that it may take up to five years for offline sales to return to pre-pandemic levels. Analysts speculate that some shifts in consumer behavior will be permanent. And in the meantime, digital giants like Amazon were well positioned to capture market share. Already enjoying a 40 percent share of online retail, Amazon saw their sales grow by 35 percent. In fact, they had to hire an additional 175,000 employees during the pandemic to meet demands.
2. A Harvard study indicates the best strategy for recovery balances cost reductions with smart investments in growth.
2020 is not our first recession. A Harvard study from 2010 looked at the strategies employed by 4,700 companies before, during, and after the three most recent recessions (prior to the Great Recession). Oddly, those recessions also fell on “decade” numbers: 1980 (1980 to 1982), 1990 (1990 to 1991), and 2000 (2000 to 2002).
Ultimately, they concluded that recovery solely focused on cost reduction was found to be shortsighted. “Companies that master the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession.” It continues that the optimal strategy is “a specific combination of defensive and offensive moves has the highest probability—37%—of breaking away from the pack. These companies reduce costs selectively…as they invest relatively comprehensively in the future by spending on marketing, R&D, and new assets.” The study also noted that “Firms that cut costs faster and deeper than rivals don’t necessarily flourish. They have the lowest probability—21%—of pulling ahead of the competition when times get better.”
3. Rebuilding the workforce is expensive and it’s a buyer’s market for implementation services.
Studies have shown that the winning strategy for business recovery is the optimal balance of cost reduction and investments in future capabilities and growth. Reductions in force were swiftly made, and there is optimism that the worst of it is behind us. But hiring new talent and rebuilding is quite expensive. A study found that it can cost up to 30 to 50 percent or up to 150 percent of the salary to replace an entry-level or mid-level employee, respectively. The costs are even higher at executive levels, sometimes by a factor of four.
So companies are already operating leanly and there is significant disruption. This is the time for transformational, perhaps even market-making, innovation. And when you think about it, from an implementation cost perspective, it will never be cheaper to execute. So provided you have the funding, 2020 is a buyer’s market full of hungry software vendors and system integrators.
4. Customers value 1-to-1 personalization of the customer experience.
But why are the digital leaders winning? Well, their immense scale certainly helps. They possess superior abilities to rapidly and clearly understand their customer needs, drive better business outcomes, and optimize every interaction regardless of the channel.
Customers respond quite favorably, even at a premium, for personalized products and services. State-of-the-art digital companies of today are using artificial intelligence to recommended offers to their customers in real time. The analytical models that drive these decisions are constructed by considering hundreds of data points on the customer, the product, and the current context of the interaction. These models and their predictors are continuously monitored and automatically adapt as part of a feedback loop. Over time, the models become incredibly accurate at predicting customer behavior, such as the probability that a customer will accept and purchase an economy versus premium product offer.