How Is AI Moving From Improving Bottom Lines To Driving Topline Growth?

Recently, McKinsey released a report on the State of AI in 2023. According to the report, 79% of all respondents say they’ve had at least some exposure to Artificial Intelligence, 40 percent of respondents say their organizations will increase their investment in AI overall because of advances in AI.

As always, Artificial Intelligence is consistently improving the bottom line of the company. 27% of respondents confirmed that 5% of their EBIT is attributed to AI. Companies are saving costs across different functions through AI adoption. They are becoming more efficient in how they work, reducing waste, and optimizing resource utilization. IBM reports that over 85% of advanced adopters reduced their operating costs with Artificial Intelligence.

However, the biggest takeaway from the survey is that AI is also enabling companies to drive topline growth. AI adoption is growing, particularly in service operations optimization, product enhancements, and contact-center optimization. It is helping companies to improve their marketing and sales and product and services development and generate more revenue.

Let’s look at a few use cases where AI is instrumental in driving topline growth.

How Is Artificial Intelligence Driving Topline Growth?

1. Marketing and sales

Whether it’s personalizing content or generating leads, Artificial Intelligence for business can play a significant role in improving revenue outcomes. Here are some use cases in which AI has demonstrated its value.

• Lead generation: According to Harvard Business School’s study, AI can increase leads by more than 50% and reduce acquisition costs by 60%. AI can help with lead scoring and enable the sales team to prioritize leads that are likely to convert.
• Assistance to sales team: The sales team spends most of their time on repetitive tasks such as setting up meetings, which leaves them with very little time to spend on high-value tasks such as sales forecasting. AI automates the repetitive tasks enabling the sales team to focus on deal-making, forecasting, and price optimization. The sales team can use AI for these tasks too. For example, AI can suggest optimum discount rates to customers based on different parameters that
  are designed to improve conversions and closure.
• Personalized recommendations: Morgan Stanley Wealth Advisors use AI to tailor investment proposals for their clients within 45 minutes. This has helped the sales team save time and make at least 5 to 6 more calls each day on average. AI can also help the marketing team personalize content and communication to deepen engagement based on customer’s preferences. Marketers can also use AI to build targeted campaigns and personalize their messaging to send 1:1 messages instead of generic ones. This helps in increasing leads and conversion rates.

2. Customer service

In a hyper-competitive landscape, the quality of customer service can make or break a company’s growth. Artificial Intelligence can help in improving customer service. This can help drive customer retention, enable upselling and cross-selling, and increase AMCs and service revenues. According to Service Global Solutions, 95% of customer interactions will be AI-powered by 2025. McKinsey’s report also showed that contact center automation is one of the most popular AI use cases among companies. AI will not replace human interactions completely.

However, AI-powered chatbots can be used to address customer problems 24/7 and within a short turnaround time. By addressing low-priority or template-based queries, Artificial Intelligence can free up the customer service teams to build a meaningful relationship with the customer. It can also personalize recommendations based on the customer’s interests and responses and enhance their experience. AI is also helping companies deliver value-add services to customers that can generate new revenue streams. Take Rolls Royce, for instance. They use AI capabilities to send customers predictive maintenance contracts. Under this contract, the company regularly monitors the engine’s health and replaces the parts before they break down.

3. Product development

AI-based product enhancements, product features optimization, and development of AI-based products feature among the topmost options adopted by companies in the McKinsey report. According to Harvard Business Review, 51% of executives said that the primary goal of AI adoption is to enhance the products’ features, functions, and performance.

Artificial intelligence for business plays a major role in product development and generating new revenue streams. To begin with, it reduces the time to market and helps launch products within weeks. Companies like Procter & Gamble; Johnson & Johnson have reduced the design time and developed the products in one-third of the average industry time. It allows the company to stay ahead of competitors. It also helps companies develop personalized products and optimize pricing based on real-time data. Better products mean more sales and better results.

Conclusion

McKinsey’s findings show that companies that use AI models well are likely to see high revenue growth. According to IBM research, advanced AI adopters reported 6.3% of direct revenue gains due to Artificial Intelligence. Clearly, AI adoption can significantly impact the company’s topline growth.

Here are a few things companies can do to adopt artificial intelligence for business

• Prioritize the functions, workflows, and use cases that will contribute to the topline growth.
• Focus on building AI-readiness capabilities and plan the budget for revenue-generating AI projects
• Modernize the legacy technologies, systems, and processes to enable seamless AI adoption
• Measure the outcomes regularly and learn from failures to pivot and grow

Of course, there are concerns regarding solution selection, development, and implementation in AI adoption. However, with the best products, right strategies, and expert partners, companies can harness the power of Artificial Intelligence and avoid pitfalls. They should work with technology partners who can understand the business goals and build bespoke solutions to achieve the desired outcomes.

At Veracitiz, we work with companies to build AI-based solutions that can help them grow. As an authorized IBM reseller and service partner, we provide services across the IBM portfolio.

To know more about our solutions, contact us.