business strategy

AI in Marketing and Sales Decisions

April 10, 2023 By Tip of the Spear

The Point: The world is becoming more volatile, uncertain, complex, and ambiguous than ever before, which makes predicting customer behavior and adapting to changing market conditions more challenging. However, some companies have successfully leveraged AI models to predict outcomes and adjust their marketing and sales efforts, giving them a competitive edge. By analyzing historical consumer behavior data, these firms can predict the likelihood of customers responding positively to marketing campaigns, detect potential churn, and redirect sales efforts when predictions go off track. In effect, they run a large number of digital experiments that help them respond to market changes more quickly than their competitors. In this article, we explore how firms can use AI models to predict customer behavior and adjust their marketing and sales accordingly. We present two case studies that demonstrate how AI models helped a global trading firm and a real estate property developer to adapt to changing market conditions and achieve better business outcomes…Enjoy!

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Why AI Is Changing How We Make Marketing and Sales Decisions

In the analog world, it was challenging to establish a causal link between marketing investments and customer response. However, the digital world has made it easier to build causal links by running a large number of relatively cheap experiments. Firms have the ability to track customer responses at every stage of their journey. These stages include search, click, purchase, and even consumption. This process leads to an exponential increase in the amount of data available to firms. The data provides valuable insights into the customer journey. The insights can be used to improve customer experience and inform business decisions. This data tracking is made possible by technology and data analytics.

Some firms excel in adapting their use of customer data to respond to changing marketing conditions. These firms are faster than others. They can quickly pivot in response to uncertain conditions. These fast-acting firms use AI models to predict outcomes at various stages of the customer journey. For example, they analyze historical consumer behavior data and predict the likelihood of a customer responding favorably to a marketing campaign. This proactive approach to managing customer relationships enables firms to predict which customers are likely to churn and what corrective action can be taken to prevent the customer from defecting. Meanwhile, their competitors react after the customers have already left.

Firms rely on AI feedback to adjust marketing and sales when predictions fail due to external factors. They run digital experiments to respond quickly to market changes and gain a competitive edge. AI tools, while not perfect, can transform decision-making in marketing and sales.

Case Study: A Global Trading Firm

In early 2019, a trading company employed AI-based prediction models to monitor the RFP-based purchasing processes of its clients. The firm focused on quality as the primary criterion for being short-listed, which allowed it to pursue select opportunities.

However, the AI-model predictions made by the firm began to prove incorrect by May 2020. Upon further analysis, it was discovered that delivery-related terms were better indicators of being short-listed by clients. As a result, the company quickly and effectively altered its engagement model globally. Thanks to AI, firm leaders could now anticipate intermediate outcomes in clients’ purchasing processes and quickly adapt the marketing and sales approach to match shifts in the market, rather than relying solely on macroeconomic data or revenue shortfalls after a couple of quarters.

With the help of AI, the trading company was able to adjust to market changes and achieve better results. It promptly changed its global engagement model, aligning sales and marketing strategies with market shifts.

Case Study: A Major Real Estate Property Developer in the UK

In January 2020, a UK real estate developer conducted a study on tenant incentives. The study aimed to find the best way to incentivize tenants in corporate spaces. Their discovery showed that offering a rent-free period for the first few months of the lease was the most effective incentive. The study factored in the low probability of corporate spaces remaining unrented. The findings suggested that offering a rent-free period would attract more tenants, leading to higher occupancy rates. The developer concluded that providing a rent-free period would be the most attractive offer to potential tenants.

The developer and marketing team cooperated for the incentive. Targeted campaigns emphasized the rent-free period’s benefits for business expansion. Increased occupancy and profitability were achieved, establishing the developer as a market leader. Understanding ideal incentives and data-driven insights are crucial in competitive industries like real estate.

The case study emphasizes the significance of comprehending and examining the ideal incentives to draw and retain clients. This is particularly important in fiercely competitive industries such as real estate. Through the use of data-driven insights and collaboration with their marketing team, the developer established an efficient incentive program. The program proved successful, driving business growth and achievement.

SUMMARY

In conclusion, the case studies of a global trading firm and a major real estate property developer in the UK demonstrate how AI models can help firms adapt to changing market conditions and achieve better results. Overall, AI models in marketing and sales give firms an edge in a volatile market. It’s uncertain and complex, and the environment is ambiguous. By leveraging data-driven insights and working with their marketing teams, firms can create effective incentive programs that ultimately drive business success.

Sam Palazzolo, Managing Director

TURNAROUND MANAGEMENT: Do Your KPIs Tell You It’s Time?

August 10, 2017 By Sam Palazzolo, Managing Director

The Point: – The compilation and coordination of Key Performance Indicators (KPIs) are taken very seriously by numerous companies for good reason. They often determine the business strategy the company will accept, and the strategies that should be rejected. Their compilation acts as a tool that differentiates the company from other competitors. So if you ask some business owners, they will tell you that the essentiality of business KPIs can never be over-emphasized. When your company needs turnaround management, business KPIs can help you drive back your sales, profits, and even make your company’s growth surpass previous levels. Nonetheless, if they are not managed appropriately, they can be detrimental to your business strategy. So in this post, we’ll explore the topic of Turnaround Management: Do Your KPIs Tell You It’s Time?… Enjoy!

DO YOUR KPIs TELL YOU IT’S TIME?

Your Key Performance Indicators (KPIs) tell you whether it’s time to make changes in your business or not. Basically, the reason why companies rely on KPIs is to know if the things that are being done in the company are having a real effect on the business, measuring performance in a variety of categories. You can invest all your time and energy in getting so many tasks done by your company, only for your business KPIs to tell you that your performance needs improvement. You may think you have the best business strategy, but unknowingly to you, it is not effective enough. KPIs can indicate to you that there is need for turnaround management before the problems of the company present themselves (And if you’re like most of the organizations I consult with, there typically are one or two problem areas present regardless of how smoothly run the operation is!) Companies that track their KPIs and take it with seriousness rarely face worst state issues.

IT’S ALL ABOUT BUSINESS STRATEGY!

Measurement of business’ KPIs indicates to the leader how much, or the number of something, there is and allows for compare/contrast analysis between the different measurements taken (i.e.. total revenue last month versus previous month, year-to-date average, last year same month, etc.) The metrics and measurements however tell managers that it is time to add something to the business strategy or remove something.

KPIs FOR BETTER PROJECT/RESOURCE/TEAM MANAGEMENT

A company that does not rely on business KPIs will find it more difficult to manage projects, resources, and massive teams, when compared to a company that tracks and measures KPI. This is the advantage of companies that rely on KPIS that makes them rarely face issues in the worst situations. Every business owner should see the measurement of KPIs as a perspicacious idea, and use it to decide “next steps” for their business.

WHO SHOULD COMPILE KPIs?

Since your KPIs tell you it is time to make changes in various aspects of your business, it should never be taken as a trivial tool. If possible, employ a qualified person that can measure KPIs with data integrity/consistency, and at the same time decipher it for you. Your KPIs will guide you positively in so many ways, so it should be measured regularly, and followed-up properly to avoid unnecessary and superfluous turnover of processes/procedures/management.

SUMMARY

In this post we’ve explored the Turnaround Management topic of KPIs, namely if they are telling you it’s time to move your business around. Your KPIs are a toolkit that shares a lot of important metrics by which you can drive your business forward with from analysis. Not measuring leads to not managing, and may cause you to miss out on important turnaround opportunities!

Sam Palazzolo

PS – If you/your organization has challenges as a result of Turnaround Management activity, please don’t hesitate to drop me a line and request future post titles! Here are a few other titles that are currently in the works:

What Role Does Technology Play in Turnaround Management?
The Tough Work of Turnaround Managment – 4 Tips!
Why Companies Fail or Enter a Declining Period during Turnaround Management
The Stages of Corporate Turnaround
The Stages of People Turnaround Process

What Role Does Technology Play in Turnaround Management?

August 3, 2017 By Tip of the Spear

The Point: When a company is on the brink of financial havoc (or already facing financial havoc!), we tend to look for ways to turnaround the operation. Technology has been looked to as an answer to the financial havoc problem. The role technology plays in turnaround management has been a great one to explore (Keep in mind, there are other areas of a business to explore… But those are for a later blog post!). Companies can not only explore business technology, but now rely on it heavily whenever they identify a turnaround condition. Technology is filled with the means to improve the positive effects of your business strategy. In this blog post, you will get to know how technology has been able to be leveraged so as to help turnaround management, and why you should put it into consideration when you next face a turnaround opportunity… Enjoy!

Roles Technology Plays in Turnaround Management

ROLE #1: SURVEILLANCE – One of the reasons a company may be failing is the devoid of effort produced by members of the company. If your company happens to be failing because of this reason, and you finally detect that, it will still be difficult to make necessary amendments without business technology. However, with the help of technology, you can check out the efforts each member of your company is putting to work. This can be done at anytime, and it has even been made advance that you can check this out right from your home or even when you are outside the country. This can direct you in turnaround management and even in the designing of a new business strategy if needed.

For example, let’s explore the surveillance camera. If you do not have a surveillance camera in your company, you can do it at anytime and it is very easy to install. Surveillance camera has made it possible for business owners to detect a lot of unknown and obscure things that happen in the place of work when he or she is away. This is a major role technology plays in turnaround management.

ROLE #2: COMMUNICATION – Apart from the fact that surveillance can be very helpful in detecting useful information, there are also communication tools that can make the management of a company get to know information from both business members and outsiders. The internet has also been helpful in making anonymous individuals share reviews about the company (Think Yelp!, Google+, etc.) This can help business owners have insight of what the company is lacking, and more importantly what is needed to be done for an effective turnaround management. Business technology that enables communication between business owners and employees should be reviewed/mined for input in further modifications (Products/Services, Processes, and People). It is a shrewd business strategy to survey employees so as to get information from them, rather than approaching them personally, as they may not feel too comfortable divulging some information without fear of retribution.