It’s no secret that B2B companies have complex go-to-market strategies and tactics historically rooted in driving revenue. However, over the last few years, B2B professionals have also been tasked with making sure revenue doesn’t come at the cost of profit – an arduous ask that hinges on many factors outside of B2B commerce orgs. This is why SAP partnered with Master B2B on The Profitability Imperative, a four-part series – to explore what’s top of mind for B2B executives as they navigate the all-AI hype while focusing on achieving profitability.
AI and personalization present new opportunities for B2B companies to increase profitability while decreasing operational and acquisition-related costs – but there are clear signals that barriers to success exist, and need to be addressed before the promise of AI can be fully realized.
Here are the top takeaways from The Profitability Imperative’s practical AI and personalization reports:
- AI offers opportunities to improve profitability, but the majority of companies aren’t fully utilizing it
- Siloed data sources are hindering profitability via AI and personalization
- B2B orgs are missing out on the opportunity to drive profits with AI-driven site search and chatbots
1. AI offers an opportunity to improve the profitability of every order, but the majority of companies are not fully utilizing it
Given its ability to add value across all functions of a B2B organization, AI offers a historic opportunity to transform the profitability of every B2B order. B2B practitioners should be looking at AI tools to help them scale profitability. In their survey of B2B practitioners, Master B2B revealed that 75% of B2B companies are using Generative AI tools in some way within their organization. The uses span from writing marketing emails to producing SEO-focused copy and informing customer service chatbot conversations.
While the majority of companies are utilizing generative AI to varying degrees, there’s still a gap in the number of impactful opportunities available through AI and the actual utilization.
For example, only 8.1% organizations use AI to create product imagery which can help scale creative production without increasing costs. Additionally, only 2.3% of organizations use AI to deliver interactive product demos. AI-driven product demos can drive higher conversions and profits without significant costs.
Leveraging AI technology across marketing, customer experience, and supply chain represent opportunities for companies to quickly realize short-term ROI. Companies using AI widely across these key areas achieve increased profitability by improving the customer experience while reducing costs across the organization.
2. Driving profitability through AI and personalization is often hindered by siloed data sources
Comprehensive, connected, high quality data is key to driving profitable growth through AI and personalization efforts. Data hygiene is the biggest issue holding B2B companies back from moving forward with these efforts. An inability to connect data from different systems, inaccurate data, and lack of accessible data are just a few of the challenges B2B organizations face as they’re trying to scale AI and personalization across the enterprise.
While personalization has long been known as a driver of higher conversions and improved customer experience, B2B companies are often limited to only the data available in their e-commerce platform. This means that valuable customer interaction data collected across the customer journey, such purchases from sales reps and customer service interactions, are missing from personalization efforts.
The ability to collect, analyze, and activate customer and operational data is also key to AI initiatives. The success of AI efforts is largely dependent on feeding clean, reliable data into AI systems. Without access to the right data, AI investments are less effective at delivering outcomes that significantly impact the bottom line.
With a single source of truth for customer and operational data, organizations can deliver more value across marketing, customer experience, and supply chain. ERP platforms are ideal as this central source of truth because in addition to already capturing critical operational and business data, they also provide access to product margin data that enables companies to optimize profitability at every touchpoint.
“When we asked about the biggest challenges that are preventing the organization from using Gen AI tools more widely, respondents cited a lack of highly-trained employees. Of note, 52% of respondents said that they simply don’t have enough expertise in-house to implement and manage these new technologies.”
Some other findings include:
Get the full report HERE.
3. B2B organizations are missing opportunities to drive profitability with AI-driven site search and chatbots
Many B2B practitioners are failing to capitalize on two AI-driven strategies to increase profitability across orders: implementing AI-driven search across their site and deploying chatbots to support customer service efforts.
64% of survey respondents are not using any AI to improve their search functionality and only 28% reported that their companies have implemented chatbots.
Not investing in these two areas is a potential misstep by B2B organizations. The few companies that are using AI-driven search are engaging their online customers with more contextual results that lead to higher conversions. AI enables organizations to offer predictive search suggestions as users type their queries, provide semantic search to improve results by understanding user context and intent, and deliver more tailored search results based on individual behavior. When AI-driven search is used, organizations benefit from fewer high-cost customer interactions, a lower cost to serve, and improved per-customer profitability.
Gartner predicts that AI-driven chat technology can reduce labor costs by $80 billion by 2026. Chatbots, especially those that emulate human interaction, can drive down costs while also functioning as a means to intake customer service data that can be turned into insights for the improvement of existing products. A study published in the Journal NIM Marketing Intelligence revenue found that the more a chatbot emulated human interaction, the more impact it had on driving sales.
As B2B customer expectations rise and companies are pressured to deliver faster ROI, AI and personalization initiatives offer organizations the opportunity to drive down costs while increasing revenue with every order. While there are still many obstacles to fully utilizing these technologies across the enterprise, companies who are seeing success with AI and personalization view these investments as strategic advantages that can impact everything from reducing marketing expenditures to driving customer loyalty and optimizing supply chain management.
