Leveraging AI as an opportunity for strategic business transformation
Today’s world is dynamic, complex, and competitive. The pandemic’s disruptive effects on global markets and buyer-seller relationships compelled many companies to push back on traditional sales methods and move to a digital-first mentality, where eCommerce can play a key role. However, due to the complex processes and the often-large number of products and customers, leading B2B organizations quickly realized they need a smarter approach to navigate the volatile environment and to achieve desired business outcomes. This is even more crucial now, when face-to-face interactions are highly limited and supply chains are completely disrupted.
Why AI matters for your digital transformation
As modern buyers have been shifting their purchasing to eCommerce and digital self-service channels, business agility, personalization of offers, and pricing precision are taking a primary spot in the strategic and operational efforts to retain market positions and avoid the risks of losing customers to competitors. In this blog we will focus on why AI has become a key enabler of efficiency for businesses that want to adapt successfully to a rapidly changing world and how it can effectively predict buyer expectations across each and every sales channel, including eCommerce.
Understanding big data: Connecting the dots for the business
AI enables organizations not only to automate manual processes and eliminate inconsistent practices, but also to translate their “ocean of data” into valuable information. Often these insights are “invisible” to the human eye, but with the help of machine learning (ML) techniques, business leaders can react swiftly to market volatility and remain competitive. Using data science to build models with descriptive, predictive, and prescriptive algorithms, companies can analyze and extract the right level of information in the form of user-friendly visualizations, to take relevant action against it for the present or the future.
Once a business has created a scientific model for a specific process and the team’s decisions, actions, and feedback are completely automated through digital technology, this model continues to be enhanced with new data, and adjusted in real-time, to better reflect the new business and market reality. It is basically a learning loop, where AI constantly improves its performance for the assigned workflow, steering the business toward success. According to Dr. Michael Wu, “using business AI will be critical to eCommerce success now, because the pandemic has significantly disrupted the demand and diminished margin in many industries.” Because by accelerating digital sales workflows, automating product information updates, and improving the market relevance and transparency of prices, organizations increase their chances to convert more buyers in digital channels.
Making customer experiences smarter and more personalized through AI-commerce
Customer engagement, conversion and retention in digital channels are now fully dependent on whether a business can provide a frictionless and consistent buying experience. This is the new battleground for modern sellers. And whether it’s “frictionless” is determined by the company’s agility and data-driven personalization capabilities, all of which are a direct result of the power of AI. Let’s look at a few examples of how AI-tools can support improved shopping experiences in B2C and B2B.
Markets are different and so are buyers, that is why “one size does not fit all”. To effectively serve digital touchpoints consumers engage with, B2C retailers need relevant buyer insights on product and service preferences, buying habits, prices etc. in real-time that are then considered in the experiences buyers enjoy. A single AI-powered digital platform allows sellers to manage intelligently their online stores across multiple countries, devices and even for more than one brand. That empowers any type of retailer to serve quickly and in a personalized manner the unique requirements of their shoppers, no matter where they are and how they shop, and ultimately transform them into loyal and frequent buyers without extra efforts or costs.
On the other side, to navigate B2B complexity and drive best-in-class buying experiences in a multi-channel environment, businesses in manufacturing and distribution use advanced self-service customer portals that empower their savvy buyers with seamless navigation and customized product catalogs, transparent dynamic pricing and cross-sell insights, personalized to their evolving demands, as well as simplified ordering workflows that speed up even the most sophisticated purchasing needs.
The power of AI pricing optimization
Recently, Justin Silver, PhD, AI Strategist at PROS, discussed in an article how businesses can leverage AI in several key pricing aspects. First, to unlock the power of their business data and gain a competitive advantage on the market. And secondly, to react more swiftly to market changes, as the cost of commodities is constantly increasing, and thus mitigate the effects of potential inflation risks. According to his analysis, to be successful B2B organizations need to forget about reactive pricing practices and instead rely on AI-infused automated pricing workflows combined with the ability to accurately forecast demand. These two capabilities are quite important to pricing management and optimization processes, ultimately empowering businesses, and their pricing teams to weather any looming economic storm and to stay ahead of the rapidly changing environment.
How AI is key to building, managing, and deploying effective pricing strategies:
- Personalization that follows evolving buyers’ needs: AI provides dynamic price recommendations to sales teams that balance maximized value for businesses with customers’ willingness-to-pay, thus increasing win rates and buyer engagement, and reducing unnecessary negotiations.
- Alignment of pricing and business strategy: With the power of advanced AI, you can consider not just the willingness-to-pay of each customer, but also focus on the highest probability pricing opportunities and align your pricing outcomes to the preferred business strategy, maximizing margins or revenue across used channels.
- Pricing designed for digital sales channels growth: AI enables an eCommerce pricing model, accounting for demand elasticity and price elasticity within customer segments, seasonal shifts, and changing competitive situations. Smart technology ensures B2B organizations can drive higher adoption and AI-powered sales through their eCommerce and self-serve channels with precise, differentiated, market-relevant prices.
- Next-generation adaptive science that follows changing external and internal conditions: By incorporating a feedback learning loop you can be sure AI produces the right optimal prices for every channel in real time, every time. By considering the unique characteristics of each customer you gain and by allowing you to differentiate your sales approach where it matters, AI empowers your business to handle any unique case that comes your way in the future.
What comes next?
So, once your business implements AI, what’s next? According to Dr. Silver, a key challenge companies face when implementing artificial intelligence technology is how to sustain its adoption in the long term. For successful adoption of AI, time and compliance with the system’s smart recommendations are the two essential factors. The best way for companies to measure their progress and improvements is to rely on key performance indicators (KPIs) that track the benefits of these pricing and sales recommendations on the business over time. The results will help core teams gain trust in AI and continue to apply the insights the system is offering them in the future.
And don’t forget to consider these 3 important ethical questions when evaluating what AI technology to rely on:
1. Does the platform provide transparency on how data is leveraged?
2. Does the vendor take accountability for the outcomes of the AI system’s actions?
3. Do the system’s AI models avoid any unintended biases to human attributes?
To learn more about how PROS can support your business and eCommerce growth, check out our PROS Connector For Real-Time Pricing or learn why pricing is key to digital selling maturity.
This is an Adobe partner sponsored post — by PROS.