Tech-powered growth: Three things growth leaders do differently

Tech-powered growth: Three things growth leaders do differently

By Matt Dallisson, 19/09/2023

Growth has always been important. In times of uncertainty, profitable growth is critical.

The benefits of growth are undeniable. McKinsey’s analysis of more than 5,000 public companies shows that growth champions—companies that profitably outgrow their peers—create 80 percent more shareholder value than their peers over a ten-year period.1Choosing to grow: The leader’s blueprint,” McKinsey, July 7, 2022. But growth is hard to achieve. Only one out of eight companies grew their revenues by more than 10 percent per year over that span.2Based on analysis of data from Corporate Performance Analytics by McKinsey and on regulatory filings from S&P Global, 2010–19.

Growth champions’ performance stems from a variety of factors, but one area in which they’ve pulled ahead most obviously during and since the COVID-19 pandemic has been tech-enabled growth3How COVID-19 has pushed companies over the technology tipping point—and transformed business forever,” McKinsey, October 5, 2020.—and they’re still pulling ahead. Growth champions surveyed in late 2022 were 55 percent more likely than growth laggards to report plans to introduce new tools and technology to support sales.4The multiplier effect: How B2B winners grow,” McKinsey, April 13, 2023.

To drive above-peer growth, other companies can take a page from odds-defying growth champions by focusing on three cornerstone elements powered by built-for-growth technology: growth analytics, sales productivity, and omnichannel experiences.

Growth analytics: Scaling smart decisions

Data and analytics is the lifeblood of modern organizations because it’s an engine that drives rapid, smarter decision making. According to our research, organizations that use their analytical horsepower to turn leads into opportunities for customer growth realize revenue increases of up to 20 percent.5Jochen Böringer et al., “Leveraging growth analytics for B2B sales,” Harvard Business Review, March 21, 2023. The most effective approach is to seamlessly embed analytical tools into the sales process, allowing organizations to quickly act on insights and recommendations. The best action to take next may be contacting a top-priority lead, addressing an account at risk of churn, or offering the best-possible pricing. That information would be the most useful if displayed in the context of opportunities, quotes, and accounts that sellers work through every day. One important use case for these analytics tools is to display a score for a deal—based on the market, customer, and historical data—within a configure-price-quote (CPQ) solution as the deal is being configured in real time.

Despite the substantial opportunity, the sustained use of analytics at scale remains a challenge: only 21 percent of companies we studied systematically embed insights from analytics into the tools salespeople use every day, which leads to suboptimal adoption and incomplete feedback—as well as slow improvement—for analytics models.6McKinsey B2B Growth Analytics Sentiment Survey, March 2022, n = 1397 respondents. For more on data and analytics, see Jochen Böringer, Alexander Dierks, Isabel Huber, and Dennis Spillecke, “Insights to impact: Creating and sustaining data-driven commercial growth,” McKinsey, January 18, 2022.

A global agribusiness boosted organic growth by integrating insights from analytics directly into frontline sales tools. Decision makers identified about $100 million in additional margin contribution across six advanced analytics use cases, including cross- and upselling and pricing. The system then offered sellers tailored insights and action plans across the customer life cycle in real time.

Of course, many sellers were used to using their subjective judgment to plan their next moves. To boost adoption of the system’s recommendations, sellers used a self-serve dashboard integrated with their everyday tools to track their personal performance. Feedback from the dashboard included alerts on performance improvements such as higher margins or conversion rates when sellers implemented the analytics engine’s recommendations. As a result, 100 percent of sellers engaged with the dashboard’s recommendations. The company was also able to refine its product positioning, increase its share of wallet, and identify opportunities for additional product combinations.

Sales productivity: Doing more with less

The growth champions we studied have been able to increase their sales productivity by as much as 30 percent by using automations to increases sales teams’ effectiveness.7How top performers outpace peers in sales productivity,” McKinsey, July 6, 2023. These opportunities range from simple repetitive actions, such as sending email follow-ups at the right time, to sophisticated lead routing based on lead scores, agent capacities, and skill sets.

More than 30 percent of sales activities across the value chain can be automated, and leading B2B companies are already stepping on the gas. Growth champions seeking still higher productivity boosts are also pursuing AI tools such as smart workflows and generative AI (gen AI).

Bringing tech, data, and AI together under one customer relationship management (CRM) platform—all enabled by gen AI—can transform customer experience and turbocharge employee productivity. According to recent McKinsey research,8The economic potential of generative AI: The next productivity frontier,” McKinsey, June 14, 2023. the technology can contribute up to $4.4 trillion in annual global productivity. The analysis shows that marketing and sales is one of four functional groups that, all together, will reap an estimated 75 percent of that impact (exhibit).9The other three functions are software engineering, customer operations, and product R&D. For more, see “The economic potential of generative AI: The next productivity frontier,” McKinsey, June 14, 2023. Indeed, gen AI could increase sales productivity by about 3 to 5 percent of current global sales.

For example, gen AI can analyze customer data to identify leads, score them based on their potential value and likeliness to convert, and provide hyperpersonalized outreach tailored to specific stages of the customer journey. Gen AI tools could even give agents guidance on negotiations in real time.

One leading real estate organization set out to optimize its operating cost base while improving customer and employee experience. An assessment of the end-to-end customer journey found that customers valued the speed and convenience of booking a tour more highly than human contact. In response, the company integrated conversational AI into its CRM to automatically cultivate and convert leads through SMS and email.

Organization-specific generative AI tools

Generative AI tools that are trained on organization-specific data can rocket productivity. They can identify the right files and data and derive actionable insights from them. Critically, the insights will become more refined over time as the tools learn. Users will be freed from having to sleuth for data and files, clean them, or run analyses. Close to home, McKinsey built a platform that quickly accesses and synthesizes the firm’s stores of knowledge to crystallize insights more quickly and efficiently than was previously possible.

To be sure, gen AI tools customized to specific organizations would require deep involvement from legal, cybersecurity, risk, and talent functions to address not only the opportunities but also the risks and norms that should govern those tools. If stakeholders can move quickly and effectively to build the tools—including guardrails—they could set their organizations up for a new era of productivity.

Results quickly followed: 87 percent of leads required no human intervention, and the overall conversion rate increased by 25 percent. Prospective customers also got faster service—instant responses to their queries in their chosen channels (for more on gen AI tools in organizations, see sidebar, “Organization-specific generative AI tools”).

Omnichannel experiences: Growing profitably through new channels

Expanding and connecting new digital or digitally enabled channels to create seamless customer experiences can unlock new segments and improve conversion.10For more, see “The new B2B growth equation,” McKinsey, February 23, 2022 and “Insights to impact,” January 18, 2022. More immediately, omnichannel motions—the ability to complete different parts of the sales journey on a variety of channels—are no longer optional. B2B buyers’ behaviors and preferences rapidly shifted during the acute phase of the COVID-19 pandemic, and our research shows these changes are here to stay.11Arnau Bages-Amat, Liz Harrison, Dennis Spillecke, and Jennifer Stanley “These eight charts show how COVID-19 has changed B2B sales forever,” McKinsey, October 14, 2020. Across industries, customers use more than ten channels to interact with suppliers, up from just five in 2016, and two-thirds prefer digital or remote interactions.12McKinsey Global B2B Pulse Survey, December 2022.

Organizations are acting on these developments to create profitable growth, tapping into customer segments that are increasingly comfortable placing high-value orders without face-to-face interaction. Self-serve and remote channels now have the layered advantages of being often preferred, cost effective, and highly efficient. Inside sales, for instance, can now execute on a higher volume of leads with more control, as compared to traditional selling models, using tools such as tech-enabled prioritized leads, guided selling, and call analytics.

Consider the case of one Spanish multinational, which saw that its customers’ preferences shifted during the acute phase of the COVID-19 pandemic toward digital self-service. The company moved quickly to meet this demand and set up a new online self-service channel in only four months. This branded self-service capability not only met customers’ preferences but also freed up significant capacity for the sales team and allowed the company to gain more than 500 additional sales opportunities.

Built-for-growth tech is changing the game in marketing and sales, and growth champions have been earlier than their competitors to recognize and act on this insight. It’s not too late. Other companies can follow in the footsteps and capitalize on built-for-growth tech.

This content was originally published here.