strategy

Sharper, Leaner, Smarter: AI's S&M Economies

Stuart Riddle

Dec 8, 2023 — 4 min read

AI Redefines Sales and Marketing Metrics

At 30% to 40% of revenue, S&M is one of the highest cost centres for companies. Success has traditionally been a tale told in numbers - leads generated, calls made, deals closed. But as AI upends the sales and marketing workflow, these numbers tell only half the story.

The narrative is rapidly changing, and we urge leaders to rethink not just their execution strategies but also how they measure success. In this narrative, the metrics of success are not just about how many, but about how effective.

Old Narrative: Mass media budgets, discount-led campaigns and generic messaging. More eyeballs means more sales.
New Narrative: Relevancy and value attracts the right customers.

It's time to rethink what we know and understand - and often hide behind - and re-evaluate metrics in light of AI-driven execution.

The Old Metric: Quantity Over Quality

Once upon a time, S&M success was a volume game. More calls meant more leads; more leads meant more potential sales. This top down approach, deeply ingrained in business culture, was the yardstick by which many judged success. However, this story is taking a twist. The emergence of AI and data analytics is challenging the supremacy of volume-based metrics, spotlighting the limitations of a purely quantitative approach.

Old Metric: Total sales calls or emails sent.
New Metric: Engagement rate, response quality and sentiment generated from content marketing and targeted outreach.

The Bottom Line

The integration of AI into sales and marketing operations heralds a significant shift from traditional team structures to a more streamlined, efficient model. The data showcases a remarkable 30% reduction in workforce requirements while simultaneously enhancing the productivity ratios across S&M roles.

The Future State with AI (Source: Battery's State of the Cloud Report)

AI-powered Efficiency

This evolution means that with AI, fewer professionals can manage a wider scope with increased efficiency, demonstrating that success in the modern business landscape is measured not by the size of your team but by the strategic deployment of technology to optimise performance and results.

As such, leaders must recalibrate their success metrics, embracing AI's power to transform team dynamics and drive business growth.

Flipping the Script

With powerful AI technologies the focus shifts from quantity to quality. With AI, businesses can now target their efforts more precisely, and provide more value with less effort. By integrating AI, we're seeing a transformation in customer engagement: interactions are richer, follow-ups more timely, and the overall customer journey is increasingly personalised, all without inflating the team size or budget.

Old Metric: Quantity of leads in the pipeline.
New Metric: Value of customer interaction at each touchpoint.

The Old and the New (Source: Battery's State of the Cloud Report)

New Metrics for a New Era

As we embrace AI, the KPIs of S&M evolve. The new protagonists are metrics like customer engagement score, lead conversion rate, customer lifetime value, and predictive lead scoring. These metrics offer a deeper understanding of the customer journey, providing insights that traditional volume-based metrics cannot.

Old Metric: Simple conversion rates.
New Metric: Predictive lead scoring and customer lifetime value predictions.

The Challenge to CMOs: Rewrite Your Success Metrics

For leaders, this shift in the S&M narrative is a call to action. It's an invitation to rewrite the rules of engagement, to move away from traditional playbooks and adopt a more nuanced, data-driven approach. This means investing in AI and analytics tools, retraining teams to focus on new KPIs, and most importantly, realigning the organisational mindset to value quality and effectiveness over sheer volume.

Old Metric: Volume-based targets for sales teams.
New Metric: Efficiency and effectiveness in reaching and converting high-value targets.

A New Definition

Success in S&M is a blend of art and science, where AI and human creativity work together to drive targeted, effective, and efficient business growth. The challenge to business leaders is clear: adapt to this new narrative and lead your teams into a future where ROI measurement includes customer satisfaction, and long-term value creation alongside the bottom line.