AI, business growth and the race to work out what really matters
At two recent discussion events the conversation inevitably turned to AI.
The first event was our quarterly Growth Forum for Commercial Leaders where we posed a specific question to the group, asking “Where are you placing the growth bets? If you were given an extra £100k of growth budget, where would you put it?”
The second was a networking group for CEOs and founders. There wasn’t a set agenda, but the conversation naturally gravitated towards AI. How are people using it, is it changing their propositions, driving revenue improving efficiency or affecting company culture?
The groups are different, but they’ve essentially got the same agenda, growth, profit, and building long term value.
What is interesting to assess at this point is the extent to which AI is driving growth, helping to win new customers, make more money or whether it’s more about creating efficiencies, doing more with less and increasing the profit margin. Turns out it’s a bit of both.
You’ve been handed an extra £100,000!
At the Growth Forum we deliberately framed the afternoon around a hypothetical investment decision.
Growth is becoming less predictable. Nobody has unlimited time, money or people, and there are considerably more things we could do than we could ever sensibly execute.
So, if somebody suddenly handed you another £100,000 to invest in growth and you can’t spend it on headcount or existing commitments, where would you put it?
Paid digital? Events? Content and credibility? Partners and referrals? PR? AI and automation?
There wasn’t anything approaching a consensus. Which is a good thing, because the answer depends on where growth is getting stuck and how mature the commercial operation has become.
Interestingly, one commercial director said he’s been fending off the accusation that marketing isn’t working, when in fact in seems some parts of their buyer journey are working well – just not all.
It only takes one break in the chain to prevent interest turning into opportunity.
So, here’s some examples of what our Commercial leaders would do.
One would go big on paid digital.
This business wants to reduce its historic dependence on referrals and the CEO’s network by building a repeatable, always-on marketing engine. In that context, he would put the bonus £100k straight into paid digital.
But that still isn’t a straightforward decision. They’re seeing the cost of a qualified Google lead climb into four figures. LinkedIn is slightly cheaper and offers more precise professional targeting, but the leads are generally less qualified.
They have reasonable line of sight to three-year customer contracts which puts the acquisition cost into perspective. Nevertheless, unless you’re confident about conversion rates and lifetime value, £1,000 for every lead is a risky bet.
Another would invest in conversion rate optimisation (CRO).
This business already generates plenty of traffic and interest. Their problem is turning that traffic into leads and opportunities.
They’ve paused paid activity while they rebuild landing pages, introduce more conversion routes and experiment with smaller propositions that are easier for prospective customers to buy.
Until that part is working, spending £1,000 on another lead would be a very expensive way of discovering the same problem.
For another, it’s about credibility and proof.
Their priority is better content, stronger evidence and possibly some targeted PR.
The rationale is that prospective customers need help building confidence in a decision, not simply more information about products and services. Independent references, customer evidence and third-party endorsement carry considerably more weight than a business blowing its own trumpet.
With buyers increasingly using AI to research suppliers, how your expertise and credibility are represented beyond your own website matters enormously.
Another would squeeze more value from what they already have
In this case, the business could be sitting on a little gold mine, they have plenty of contacts, historic activity and a CRM full of people, but insufficient segmentation, insight or systematic follow-up.
The Commercial Director described it as the soggy sponge effect. Historically, they’ve kept pouring more water in at the top, saturating the sponge, but losing half of it before it reaches the bucket.
He’s relatively new in the role and his biggest challenge (and opportunity) is getting value from what’s already there. Nice challenge to have.
A couple of Sales Directors were more about investing in the relationship
Their businesses depend on a relatively small networks of referrers and professional influencers.
In one example, a handful of relationships already generate more than half the pipeline. His answer was emphatic, a large chunk of the £100k would go into events and relationship development, with a small remainder into content.
Another agreed, he has been getting good results from small, carefully curated dinners for customers and selected prospects, often coinciding with larger industry events. Not inexpensive, but acceptance rates are high and, importantly, they create conversations that rarely happen on an exhibition stand.
The point is, nobody said, “I’d put the whole lot into AI.”
That certainly doesn’t mean people aren’t using it. Quite the opposite. Everyone would have kept a small portion of the bonus budget to invest in ‘tooling’, but the £100k question gradually became a much more interesting discussion about where growth gets stuck.
Needless to say, everybody is experimenting
There is enormous enthusiasm for AI in all the businesses we work with. Businesses are buying tools, building agents, changing processes and trying to work out what can be done faster, more cheaply or with fewer people.
Meet Dolly
One of the Growth Forum participants has created his own personal AI assistant and given ‘her’ a name. We’ll call her ‘Dolly.’ He’s spent days briefing her on who he is, how he makes decisions, who his people are, what he’s good at, what he’s bad at and what happens when he’s struggling.
We did suggest he probably shouldn’t give her a face or a voice. There are boundaries.
But Dolly illustrates how far people are taking this. Experimentation is moving beyond personal productivity into new propositions, business models and investment decisions.
One CEO found that having enthusiastically encouraged his team to adopt AI, the business had accumulated a monthly bill close on five figures. They audited what people were using and cut the bill roughly in half. That experience has become a service for customers, who need help making similar decisions.
If you can do far more things, which things should you do?
AI is changing the equation for growth teams
One marketing person can now undertake work that previously required several different people or specialist skills. You can produce more content, launch more campaigns, analyse more data and experiment with more tools.
But more activity doesn’t necessarily create more growth. Judgement is still required to decide what deserves attention.
As one CEO wryly observed “Is AI just good at doing stuff that was never any use anyway? Are we becoming super-efficient busy fools.”
Meanwhile, the buyer has AI too
Sellers are no longer the gatekeepers of knowledge.
Buyers can research problems, interrogate possible solutions and compare suppliers before the first conversation.
One sales director told us that customers are already using AI to fact-check his supplier recommendations.
Which creates another uncomfortable question. What happens when a prospect asks AI to compare six MSPs, software companies or consultancies and it concludes that they all look basically the same?
AI can make weak differentiation much easier to expose
Which begs the fundamental questions: What are you genuinely good at? How are you different? Why would somebody choose you? What evidence is there? Who else says so?
If producing information becomes almost free, trusted expertise, opinion, reputation and proof become more valuable rather than less.
Perhaps that’s another reason why so many of our growth bets were about relationships, credibility and getting closer to customers rather than simply producing more marketing activity.
Where is growth getting stuck? Back to basics
In a market where buyers are nervous, sales cycles are long and technology is changing faster than some major projects can be sold, making yourself easier to buy from feels increasingly important.
Without a clear market position, a defined customer, a proposition people understand and a sensible route to market, executing ten times faster doesn’t necessarily move you forward. You can simply get to the wrong place more efficiently.
And to go back to the Growth Forum discussion, only one link in the marketing and sales engine needs to be broken for catastrophic impact on results.
For all the discussion about the speed and magnitude of technological change, one of the best observations came from a CEO who said simply, “Every time we focus on the basics, things just get better.”
This is a sophisticated technology business, doing innovative things. They have recently brought in RevOps expertise to analyse their data, CRM, processes and hand-off points to understand where opportunities are being lost.
Nothing particularly futuristic about that, just sound commercial practice before launching into another round of automation. After all, there’s no point automating chaos. If the underlying process isn’t fully understood, or doesn’t work, automating it doesn’t make it better. It just allows the bad process to operate more efficiently.
That takes us back to the very different £100k investment decisions.
- If you’ve got plenty of leads but poor conversion, buying more leads won’t fix it.
- If nobody knows you exist, optimising your sales process won’t solve the awareness problem.
- And if your proposition looks exactly like everybody else’s, automating outbound just allows you to tell more people, more efficiently, that you’re the same as your competitors.
The right investment depends on understanding which part of the growth process is holding everything else back.
Culture, relationships and the human touch?
As more business communication becomes automated, perhaps there will be a greater premium on things that quite obviously came from another human being.
Will the slightly imperfect email become more credible than the beautifully structured one? Will trusted relationships become more valuable as information becomes easier to produce?
And how much of selling can really be automated anyway? One Growth Forum business is taking an “AI first” approach in almost every area, including recruitment decisions. And yet, that same business has deliberately recruited a salesperson.
Why? Because personality, relationships and human interaction genuinely matter in the commercial process, and they don’t want to automate those away.
We can put percentage probabilities against opportunities in the CRM and debate endlessly whether a deal is 70% or 80% likely to close, but as one of our commercial directors commented, “If the customer texts me about the football on a Saturday night, it tells me something about the relationship that is quite difficult to put in a dashboard.” Not terribly scientific. Still quite important.
How are businesses operating when the technology is changing so fast?
The consensus among the CEOs was to experiment, accept that some things won’t work, but set boundaries within which people have the freedom to try.
Or as one CEO put it “With gut feel and guard rails.”
There was agreement in the CEO group that you need to allow people to make mistakes. It might seem counter-intuitive, but allowing somebody to fail early on, own the mistake, learn and move on can be one of the healthiest things an organisation does.
Perhaps the teams getting furthest with AI won’t be those with the biggest budgets, most subscriptions or the greatest number of agents. They’ll be the ones prepared to try enough things to learn quickly, but disciplined enough to stop doing the things that aren’t useful.
So where would I place the bet?
Probably not all in one place.
Our Growth Forum participants would invest in very different things because their businesses have different constraints.
The CEOs are exploring new commercial models and experimenting with technology, but they’re also wrestling with some very familiar questions about profitability, investment, culture and growth.
And underneath the discussion about AI, agents, automation and changing buyer behaviour are some age-old problems:
- weak propositions,
- poor conversion,
- shallow customer relationships,
- long sales cycles,
- insufficient proof and
- CRM data nobody entirely believes.
AI may help with all of those. But it doesn’t remove the need to understand and fix them.
The technology is moving too quickly not to experiment. But experimentation isn’t the same thing as strategy, and becoming more efficient isn’t necessarily the same thing as growing.
Perhaps the most useful question isn’t what AI could allow us to do next, but where we should be spending our time, money and attention in the first place.
One thing is certain; you can’t sit on the side-lines. “You’ve got to be in it to win it.”
Some of the conversations behind this article came from the ReStrategy Growth Forum, a private peer network for commercial leaders in technology businesses run by Alexandra Fenn and Ian Guest.
The IT Leaders Group is a private network for Technology founders and CEOs led by Shaun Frohlich. Both groups operate under the Chatham House Rule. Contributions have been anonymised and some identifying commercial details omitted.