3 Reasons to Invest in AI Now – Leveraging the Power of AI #19
There are a lot of reasons for distributors to adopt AI. As I explain in previous posts, the technology can help inside and outside sales reps sell more, transform customer service branches into revenue drivers and boost e-commerce performance by double-digit percentage points. At this point, the real question for distributors is not if they should adopt AI, but when. In this post, I’ll answer that question.
Recent survey data reveal that more than 90% of companies are currently implementing AI or planning on implementing AI soon. This means that in a couple of years, AI capabilities will not be a differentiating factor between companies. The bigger difference for firms will be when they adopted AI, as early movers will gain significant advantages.
There are three key reasons why distributors should fast-track AI adoption plans:
- Technological factors have made AI more powerful and more accessible now than ever before.
- Changing customer preferences have increased the demand for AI in B2B sales.
- COVID-19 has shifted distributor workflow, creating a unique opportunity for AI adoption.
As these factors converge, distributors will gain a narrow window for optimal AI adoption. Here’s why they take advantage of this opportunity.
Technological Trends in AI
Over the past few years, AI has become better, cheaper and more accessible. While there are many factors that have fueled improvements in AI, three changes have been particularly influential. Together, these changes have allowed distributors to access cutting-edge technology like never before.
- Deep learning has dramatically improved machine learning performance. Before deep learning, machines were 5 times more likely to make an image identification error than humans. Now, with advanced deep learning, machines are actually 2.5 times less likely to make image identification errors than humans. With this kind of accuracy, distributors can confidently use AI to make sales and assist employees in many other ways.
- Improved computer hardware has multiplied the speed of AI training and operations. Between 2013 and 2016 alone, computer training speeds increased by more than 60x. These huge advances have enabled businesses and developers to instantly and inexpensively generate high-performance results.
- An increase in funding for AI start-ups has created tons of new and powerful services. In 2015, AI venture funding totaled $4.6 billion. Last year, AI venture funding reached $26.6 billion. To put that in perspective, total venture spend in the US hit $62 billion last year. The fact that nearly half of all venture capital money is being funneled toward AI demonstrates the massive market opportunity that the technology is geared toward exploiting. This increased funding has enabled AI start-ups to create niche solutions for all sorts of industries. Today, distributors don’t need to pursue generic AI solutions; they can actually seek out tools that are custom-built for their lines of trade.
How Customers Relate to AI
The consumerization of B2B is another key factor in today’s distribution landscape. Today’s B2B buyers double as B2C shoppers in their off-time. So while many distribution customers make business purchases from distributors, they still do plenty of personal shopping on sites like Amazon, Etsy and eBay: These AI-enhanced, user-friendly experiences have started to change the way these customers think about buying.
As a recent MIT Sloan Review pointed out, “Business-to-business customers are people too.” While these buyers may not be as inclined to make emotional purchases, they still enjoy the kind of personalization features and frictionless customer interactions that they see all over the B2C world. Now they want to see those in the B2B world.
The consumerization of B2B is well underway. Many distributors are already capitalizing on this trend by offering B2C style options like e-commerce. However, if distributors are going to keep up with their customers, they’ll need to steer further into this consumerization. Beyond creating AI-personalized websites, leading distributors will also provide superior customer experiences with data-driven tools that assist sales reps.
As AI continues to inform how B2C shoppers buy, it will also change how B2B shoppers want to buy. Distributors who don’t adopt AI very soon will not just lose sales, they’ll also give up valuable customer loyalty over the long term.
COVID-19 and AI
To review, as AI becomes more and more available to companies, B2B customers are demanding more AI-enhanced experiences. The alignment of these two trends makes now an ideal time for distributors to invest in AI. What’s more, today’s environment currently offers distributors the perfect window to rebuild around AI.
COVID-19 has dramatically changed the way B2B customers can buy and the way distributors can sell. This has forced distributors to prioritize remote selling and tools that enable effective remote sales. If you’re going to reinvest and retool your organization, you might as well invest in solutions that can fuel growth during and after the pandemic.
As I argued last month, Customer Data Platforms (CDPs) should be a top option for distributors. These AI-based platforms can connect data across distributor sales channels and enable effective remote selling. They are also relatively cheap and highly effective thanks to the technological trends described above. AI tools like CDPs are the perfect solution for distributors seeking to keep pace with changing customer demands. However, the window for effective AI investment will not be open for long.
It is never easy to make big changes quickly. But, distributors need to move fast. Technological forces, customer expectations, and distributor readiness have all aligned to make today the AI moment. If distributors don’t act now, their competitors surely will.