3 Ways AI Can Boost Profitability in the Digital Economy
There is no question that a digital transformation is underway, as e-commerce is quickly taking a lead role in the B2B world. Machine Learning-based technologies, such as Artificial Intelligence (AI), are also increasing in popularity, with businesses looking for the best option to stay ahead of the competition. And, the digital economy does not appear to be slowing down anytime soon.
Seventy-three percent of companies expect AI to be a high priority for sales and marketing in the next two years, while approximately half — 48 percent — already see it as a high priority to stay competitive, according to a recent survey conducted on behalf of PROS by Hanover Research.
AI does not have to be the enemy. On the contrary, AI has the power to be an extremely useful sales and marketing tool for businesses. It is simply a matter of using new technology in the right way and ensuring that staff members at all levels understand how best to use it day-to-day.
Strengthening Customer Relationships
The B2C market really paved the way for digital transformation, showing customers that their needs could be met quickly and accurately. Retail giants such as Amazon truly utilized AI, finding ways to predict what customers desired with product recommendations, hoping to capitalize on potential future purchases. Amazon can even send products closer to places where customers are likely to order them.
B2B businesses can also improve their approach to customer service by implementing AI and Machine Learning. Organizations believe that AI can have a positive impact on sales specifically by helping them predict customer needs (33%), automate orders (32%), optimize pricing for buying scenarios (31%), and identify qualified leads (29%), the survey found.
With AI, businesses can learn from customer buying behavior, allowing them to suggest products or services that customers actually want and need. Over time, these recommendations can become even more personalized, which will improve the customer experience by making them feel valued.
Additionally, different types of customers — with varied approaches to purchasing — can be identified. This allows businesses to ensure that the right pricing options are being offered. For example, one buyer may regularly purchase items at a high volume and could expect a discount to ensure loyalty. Comparatively, another buyer could regularly make small orders and would respond positively to being able to pay per unit, rather than in bulk.
AI can help businesses implement personalized prices on products that customers actually want to buy, ensuring that companies can stay profitable in the evolving economy.
Maintaining a Competitive Edge
Utilizing AI can also help B2B organizations keep pace with competitors, and could even help them pull ahead of the competition.
Nearly all of the survey respondents 97 percent said that AI will drive competitive advantage. Specifically, 39 percent said AI had the potential to help their company gain an advantage over competitors.
When a business knows what customers want, and can then deliver on those needs before its competitors, which company will the customers choose?
AI can cut turnaround time for pricing requests, and can even allow businesses to increase their reliance on marketing and digital catalogs to effectively communicate values. Furthermore, pricing teams can gain a better understanding of customer perceptions of value through an AI.
Businesses might be nervous at first with increased transparency, worried that they might be compared to their competitors. However, AI will show what customers really care about, which will help businesses create personalized offers that meet customer needs and behaviors.
Gartner also determined in recent research that global business value from AI will hit $1.2 trillion this year, an increase of 70 percent from 2017. The global AI business value is also projected to hit $3.9 trillion in four years. AI capabilities will have a huge impact on automating the business decision and interaction processes, said John-David Lovelock, Research Vice President at Gartner.
“This new level of automation reduces costs and risks, and enables, for example, increased revenue through better microtargeting, segmentation, marketing, and selling,” Lovelock said.
Essentially, data-driven insights enable organizations to make more informed decisions and find key opportunities where they can grow revenue.
Improving Employee Productivity
One potential concern with utilizing AI for sales and marketing is that it would replace human workers. However, AI is a powerful tool that will help salespeople. For example, AI can deliver specific and actionable recommendations, finding products customers are interested in buying. Additionally, AI can gather greater insight on price recommendations and even help identify revenue leakage.
AI can better identify certain patterns in customer buying habits, whereas humans could overlook something or make a mistake. Thirty-nine percent of respondents in the survey said that AI can help enhance operational efficiency. The IT department is most likely to lead investment in and adoption of AI systems (45%), but sales (35%) and marketing (29%) were the next top departments.
AI-based analysis can provide recommendations, based on a huge number of data points, to salespeople very quickly. From there, a sales team can use those insights to approach pricing challenges and work to find solutions to keep customers satisfied. All of this can be done while still ensuring profitability.
The digital transformation journey for B2B businesses is only going to continue to gain momentum. Organizations can use the applications of AI to service their customers in a personal, informative, and profitable way. Each decision point and customer interaction can be properly informed by using all available information and insight, which will help businesses and customers for the long haul.
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