The ongoing Corona crisis will force a number of companies to restructure in marketing and sales as well. In this area in particular, optimizing the allocation of sales resources offers enormous potential for growth and efficiency. Sales optimization with the help of AI can help double the return on sales.
Sales is the key
In many markets, products or services from competing suppliers are comparable. Accordingly, in these market structures, sales is the decisive adjusting screw for growth and the achievement of profit targets.
A look at the balance sheets – sales resources “eat up” return on sales
If we take a look at the return on sales of our clients from the b2b environment, it was between 5 and 8% in 2019. At the same time, distribution costs averaged 15% of sales. It is apparent that sales in particular will increasingly become the focus of optimization in the upcoming discussions.
AI predicts the success of sales contacts
Since the beginning of the Corona crisis, we at Dastani Consulting have taken a particularly close look at this situation. For half a dozen companies, we have conducted intensive analyses of orders, sales contact histories, visit frequencies and tour planning. More than two million sales contacts were evaluated.
We trained our AI systems with all available customer data, such as visits, contact reports, and orders, as well as external data to forecast the sales impact of different customer contacts on a client-specific basis. The result and especially the forecasting accuracy surprised even us as experienced AI experts for marketing and sales: our models are able to forecast the revenue impact of a sales visit. Both immediate and indirect success were measured, e.g., up to one month after the visit.
Intelligent visit management is the key to growth and efficiency
At all the companies we analyzed, we came to the same conclusion: the sales department deals with a number of contacts that do not contribute to the company’s success. Although our clients came from different sectors, we always got a very comparable result: with half of the visits it is possible to generate 95% of the sales.
The sales organizations of our clients are certainly among the most renowned in their segments. They are KPI-driven, professionally set up and enjoy an excellent reputation in the field of sales management.
However, when we took a closer look at the sales management strategies of these companies, we found that the key optimization steps are seen in the selection of personnel, remuneration systems, employee training, pricing, and sales motivation through bonus and incentive systems. These factors are certainly indispensable for leading a sales organization to success, but they do not represent significant competitive advantages. The essential key to success, revenue-based contact and tour planning, has been missing.
Strategy: Using AI-based sales allocation to deploy resources in a potential-oriented manner
Dastani Consulting developed Visit Value Prediction specifically for this task. The special feature of the prediction system is that it is possible to see in advance which contact will actually prove useful and generate a successful order.
The goal is not to reduce the sales team by half. Rather, the focus is on a new strategic orientation: intelligent sales allocation. It prevents merely meeting the contact frequency of the sales force. Uneconomical sales visits are identified and sales contacts there are reduced. The freed-up sales resources are invested in high-potential existing customers, in reactivating inactive customers with high sales potential, and in acquiring new customers.
With the help of this strategy, it is possible to increase a company’s sales dramatically quickly and in a targeted manner with an existing sales team, while maintaining constant resources, and to reduce the proportion of sales costs and thus significantly increase the return on sales.
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