Your Revenue Is No Longer Linked to the Size of Your Sales Organization

Guest AuthorsArtificial Intelligence (AI)Predictive Analytics

By Thomas Lah On Nov 19, 2024

It’s time for technology companies to decouple the belief that increased revenue is linked to greater headcount.

Artificial Intelligence (AI) has become the driving force behind automating tasks, elevating employee value, and propelling revenue growth in this industry. To achieve this, companies are embracing an AI-driven path of evolving efficiencies and seeking innovative strategies to augment revenue streams, without incurring substantial expenses.

For decades, there has been a link between the size of a sales organization and the amount of revenue generated. Leaders rightly recognize a correlation between investing more in sales organizations and more revenue for the company—but AI is changing that model.

Initially, we’ve seen AI being deployed by businesses around the world. These tools have been deployed in areas like customer support and success, where the work was relatively simple and linear, making successful AI deployment easier.

Losing existing customers, also known as churn, poses a significant threat to all businesses. Customer success teams ensure positive client experiences influenced by numerous factors that generate vast data. Manual processing of this information to assess customer retention potential is time-consuming, but AI can accomplish this task swiftly.

Today, AI tools can assess the likelihood of churn and underlying reasons, and suggest areas for enhancing the customer experience. This enables human representatives to collaborate with customers to address challenges and concentrate on personal interactions, rather than data collection and analysis. Recently, we deployed the Three-Layer Model, designed to better decrease churn by applying customer health scores, predictive analytics, and machine learning propensity models. As AI solutions advance, these functions will become more efficient, optimizing human effort and increasing each employee’s value.

Our research indicates that 53% of tech companies invest in AI to support customer success initiatives, particularly churn prediction. These advancements will help stabilize revenue, which leads to the next big question: How can AI help increase new revenue without increasing sales headcount?

Inside sales tend to be simpler processes, closely tied to the previously mentioned customer success efforts. However, the high-cost, high-value work of outside sales is where AI can—and will—have the most significant impact.

During a recent conversation with Mike Flanagan, corporate vice president of global customer success at Microsoft, he shared an interesting statistic. According to his data, approximately 70% of an outside sales professional’s time is spent on administrative work.

When you consider the time spent scheduling meetings, creating sales presentations, responding to emails, and tackling RFPs, you realize that statistic is pretty accurate for most sales professionals. This is where AI will make an enormous impact.

Managing a calendar and scheduling meetings is easy work for an AI tool, and we’ve seen it develop for years. But what about the juicier areas of the sales process?

Meeting with industry and business leaders, we have found that companies leveraging AI in the RFP space have created enormous time savings. Historically, creating a proposal to fill an RFP would take days of effort and collaboration between multiple team members. With the help of AI, that work is being trimmed to hours.

Similarly, the core sales presentation is low-hanging fruit for an AI solution. If the tool has access to your company’s products, features, and services, then creating a sales presentation based on the prospect’s needs becomes a simple data management task for an AI solution.

The goal is to get sales professionals more time with prospects and opportunities to make a sale. That’s exactly what Microsoft has experienced. With the application of AI, they found sales professionals jumped from working one qualified lead per twelve hours to averaging three or four leads in the same time frame. It doesn’t take a statistician to know that more at-bats with prospects and a semi-consistent win rate equates to increased revenue from each sales pro.

As a result of this added efficiency, companies have new resources to take on new challenges or streamline their efforts. During a recent webinar, TSIA conducted a poll where 70% of participants indicated that their sales headcount would remain stagnant or decrease in 2024. In a subsequent survey held during an August webinar, approximately 80% of respondents reported that their company’s overall headcount had either remained flat or declined. However, we do not see the tech space shrinking. These polls indicate that AI already has a measurable impact on jobs and headcount.

How are you leveraging AI to advance your revenue growth? Are you leading your space, or lagging behind the competition?