Algorithms – The new magic at work
When you pick a favourite flick from a streaming service, shop on an e-commerce site or hail a cab with your smartphone, what’s the one mysterious thing at work?
All three are powered, in some degree, by algorithms based on artificial intelligence (AI)
Streaming services employ recommendation algorithms to help you decide which movie to watch. Association algorithms are used to make online shopping pleasant and a location algorithm assists transport aggregators to find a cab in your vicinity to make sure you don’t wait very long.
Sometimes you see uncanny ad pop ups of products or services you’ve been considering. Internet isn’t telepathic. It’s classification algorithms monitoring your online activities that make such recommendations possible
For AI, the journey from science fiction to everyday use has been incredibly quick. AI based algorithms are used for improving business decisions and making better predictions. Sales is no exception. Author Victor Antonio draws on research done for the book Sales Ex Machina: How Artificial Intelligence is Changing the World of Selling, to spotlight ways in which AI can help companies sell more.
Writing in Harvard Business Review (How AI is Changing Sales July 30, 2018) he lists the specific areas where AI algorithms can help sales.
THE MERCURI VIEW
The three principles of data science, according to Berkley Institute for Data Science are – Predictability, Stability, and Computability. Bringing predictability into the unpredictable has been one of the major goals of science. Many aspects of sales have been gloriously unpredictable. What will be the likely end of period sales number? Which product will Customers buy more of? How many deals in the pipeline will get closed?
Algorithms can now crunch data and provide reliable pointers to sales frontline and leaders. That will not just reduce unpredictability, but would release creative energies of sales people as time and effort invested in predictions goes down. This can be used for raising the quality of the sales interaction and delivering superior value to the Customer Pioneers in AI acknowledge that AI is not yet equipped to handle causal logics in a system. Modeling a system is based on identifying and factoring all elements of What causes what else. Seen as a system, sales has numerous elements not amenable to this kind of rigor So, while AI enabled algorithms may substantially take away many of the unpredictables in selling, sales will continue to be an intensely human activity as buying decisions are not rational all the time with emotions often becoming the deciding factor. This only means that sales will continue to be both a science and an art, the way it has always been.
5 Ways AI Algorithms can power sales
1. Offer a price that can win you the deal
Deal winning is important but that shouldn’t compromise margins. So, how much to concede on the price is always a difficult decision. An AI algorithm can deal with that. It could look at all past deals lost and won, taking in details like deal size, value, product specs, competitors involved, buyer size, geography, Customer’s industry, buyer’s annual revenues, constitution, decision maker/influencer hierarchy level, whether the client is new or existing and timing (which month, quarter). Given these inputs, the
algorithm can tell you what would be a pricing sweet spot most likely to win the deal.
2. Forecast your sales numbers more accurately
With AI, predicting end of period sales numbers will be a breeze. AI can help managers predict the revenue for the next quarter with a high degree of accuracy. This, in turn, can help the company optimize on its inventories and resources Sell more to existing clients.
3. Sell more to existing clients
Cross sell/upsell, everyone agrees, is the quickest and cost-effective way to turbo charge top line growth. But the tough question is – Who is most likely to buy new products or more of the current range? Using AI to crack this riddle could spell the difference between wasting marketing spend on those who won’t purchase and zeroing in on clients who are most likely to buy more. And that can mean higher revenues and lower sales costs.
4. Rank opportunities for investing efforts
Sales veterans will tell you that a strong pipeline alone cannot guarantee bigger sales numbers. The right opportunities with the highest potential for closure, should be pursued. With AI algorithms available, you needn’t rely on your gut or partial information to prioritize opportunities. Says the author: “With AI, the algorithm can compile historical information about a client, along with social media postings and the salesperson’s customer interaction history (e.g., emails sent, voicemails left, text messages sent, etc.) and rank the opportunities or leads in the pipeline according to their chances of closing successfully”
Mercuri Insight
Algorithms are a major support in taking the sales effort forward. At the last mile, it is the , in turn, sales skills that have, and always will swing the deal.
When on the closure mile of a sale, superior sales conversations, need appreciation, negotiation capabilities, sensing and flair for value creation, are among the critical skills that clinch the deal. And excellence in these skills is definitely attainable.
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5. Get more effective in managing your sales teams
A major challenge for most sales managers is identifying their salespeople’s opportunities needing support and nurturing. Dashboards can be developed using AI, that will tell the sales managers which deals are most likely to be closed and who among the team will possibly meet their sales targets. These insights can enable sales managers to optimally support their teams to achieve results.
the how part …
To begin leveraging AI for sales, start with your data first. Identify various data sets available within the system and combine them to get a holistic picture of your Customer base. Combining data sets can allow AI to come up with better predictions about the winnability quotient across sales. It can also throw up new insights that can support a company to achieve its objectives with optimum cost and effort.
“If data is indeed the new oil, then companies who can capture the data, analyze it, and generate actionable insights will have salespeople who’ll be able to close more deals, more often ” says Victor Antonio.
AI for sales, anyone?
You can read the Harvard Business Review article on How AI is Changing Sales by Victor Antonio (HBR July 30, 2018) Here
Author Information: Victor Antonio is the co-author of Sales Ex Machina: How Artificial Intelligence is Changing the World of Selling.
In Essence annotates published articles of value to the Sales Community. It is an effort to bring insights within reach of Sales Leaders in ways that enable quick assimilation and action. Mercuri International acknowledges the authors and the publications for the insights.
