FRESH TAKES ON BIG IDEAS

The buzz over the past couple of years about AI, especially generative AI (gen AI), has been, at times, overwhelming. There have been a lot of bold predictions about how it will play out. But in the B2B world, people are asking questions about what’s practical. They want to know what to focus on, how to prioritize, how fast to move, and where to make investments. It ultimately comes down to basic business principles. Where is the value in improving the customer experience, getting pricing right, and speeding up responses to customers? And how does it line up with growth? 

Gen AI’s value can vary widely across business models and companies. B2B companies that sell to small and medium-size businesses need to focus on customer acquisition and how to grow their customer base, since new entities start up frequently. Companies that sell to larger enterprises need to maintain and expand relationships. Then there are companies that may want to concentrate on personalization and fostering loyalty because their customers want a consumer-like experience focused on brand and products. There’s a lot of power in identifying customer opportunities.

Companies can pull together information about customer needs and their propensity to buy, then use it to autogenerate content. Gen AI can help identify small-business owners who are likely to be interested in a specific product. It can also generate a slide presentation for the pitch and draft an email to send before a meeting. It could even do this in multiple languages. An English speaker who wants to sell to someone who works mostly in Spanish can use gen AI to craft and edit an email, translate it into Spanish, and send it automatically.   

A couple of things have surprised me as companies increase their use of gen AI. The first is how hard it is to go from an initial idea to scaled use. Human behavior is really hard to change. When hundreds or thousands of people need to adapt, it can be challenging to instill confidence and trust in new capabilities and get people to effectively refocus their work. The other surprising and amazing thing is how quickly the quality of gen AI output is improving. Even just a few months ago, the level of hallucination (when an AI model produces false or misleading results) was much higher. It’s getting a lot harder to tell the difference between what was generated by a computer or a human.

“For every dollar a company spends on technology, it needs to be spending the same, if not more, on the people side.”

There are two common misconceptions I see from B2B companies in the early stages of their gen AI journey. The first is that it’s a straightforward issue for their IT teams. That outlook sets companies up for failure because gen AI has to be addressed deep at the core of how a business is run and how human capital is deployed. The second false notion is that legacy companies often think they don’t need technology solutions because they sell widgets. A decade ago, there were similar beliefs about e-commerce: many B2B players thought it was a consumer thing that wouldn’t impact them. Well, fast-forward to today and we see that e-commerce has grown explosively and is now the preferred B2B channel. That same dynamic is happening now. A lot of folks question whether gen AI is relevant for them. But given the exponential curve with which gen AI capabilities are improving, it’s important to be in the game no matter what the business is. 

What could the future look like? So far, the focus has been on how gen AI can make it easier for humans to do certain tasks by automating communications and saving time. The conversation is now pivoting toward improving the customer experience and finding opportunities where a human doesn’t even need to be involved, like using an AI agent chatbot in customer service. Further out, when a commercial organization really embraces gen AI holistically, marketing, sales, and pricing could blend together. That would create an opportunity for people to craft more personalized experiences, helping customers really get value across multiple channels. 

It’s important to stay grounded in what matters for customers and what drives them to purchase. For every dollar a company spends on technology, it needs to be spending the same, if not more, on the people side. That means not just upgrading capabilities but also rethinking processes and resource allocation. If companies are clear on how gen AI is going to help the customer, then they can focus on doing what their workforce needs to get the full value out of it.

ABOUT THIS AUTHOR

Steve Reis is a senior partner in McKinsey’s Atlanta office.